ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

So many legal developments have occurred this month, it is difficult to know where to start. No sooner did the ink dry on the Supreme Court’s decision invalidating the virtual child pornography law, than did Attorney General John Ashcroft, along with Crime Sub-committee Chairman Lamar Smith (R-Texas) propose a new bill entitled the “Child Obscenity and Pornography Prevention Act of 2002,” (COPPA) designed to close the legal “loopholes” identified by the Court’s recent decision. Justice Department officials claim that the new law is completely constitutional.

Under the new, supposedly improved bill, digitally generated images of prepubescent children would be completely banned. However, images depicting older minors still would be outlawed, although the bill creates a legal safe-harbor for photographers who can demonstrate that real children were not used to create the images. Time will tell what the Supreme Court thinks of this sequel to the CPPA. Some lawmakers have their doubts: “The Supreme Court went to great lengths to say ‘unless it’s a real minor, it’s not illegal,’” according to Representative Robert Scott (D-Virginia).¹

General Ashcroft also responded to the virtual child pornography decision by easing rules relating to initiation of federal child pornography charges. Previously, investigators and assistant prosecutors were required to obtain the approval of the local U.S. Attorney to pursue such criminal charges.² Mr. Ashcroft and the Justice Department also ordered prosecutors to examine any currently pending cases to determine whether the defendants could now be charged under obscenity statutes instead of the law struck down by the Court.³

This month also saw a 1-2-punch from the United States Supreme Court, which rendered rulings on the COPA⁴ law and decided a constitutional challenge against a local adult entertainment law in City of Los Angeles v. Alameda Books.⁵ Both cases resulted in “plurality” decisions, since a majority of the Justices could not agree on any one basis for the result. Interestingly, both cases also reversed the Appellate Courts’ decisions, and sent the cases back down to the lower courts for additional proceedings. In the COPA case, the Third Circuit Court of Appeal will now consider whether some of the other constitutional deficiencies alleged by the parties are sufficient to invalidate the law, even if application of community standards to the Internet, alone, did not justify declaring the law unconstitutional.

In the Alameda Books case, handled by the author’s firm, the High Court reversed the Ninth Circuit Court of Appeals’ ruling that an ordinance preventing multiple classifications of adult entertainment businesses from operating in the same structure was unconstitutional, since it was unsupported by sufficient evidence of “adverse secondary effects” allegedly caused by adult businesses. Although some industry leaders feared that the Supreme Court would simply uphold the ordinance, many were pleasantly surprised when the Court essentially determined that a final decision on the issue was premature, and that additional evidence relating to adverse secondary effects was necessary before any constitutional decision could be rendered. While the Court again rendered a split decision, it appears that litigants challenging local adult entertainment ordinances will have more ammunition. They now will be allowed to present their own evidence relating to the lack of negative impacts by adult businesses, and that the courts will be required to consider both that evidence, any evidence adduced by the local governments in support of their ordinances, and evidence of the extent to which the ordinance stifles speech. This is a positive development for brick-and-mortar adult businesses. This interesting decision opens up a whole new round of challenges by adult entertainment facilities against local ordinances which may not be adequately supported by competent evidence of adverse secondary effects.

Things have gone from bad to worse for James Steven Grady, whose bail has been increased from $1 million to $1.5 million after prosecutors filed additional charges of second degree sexual assault, attempted first degree sexual assault and contributing to the delinquency of a minor.⁶ Grady was initially arrested in connection with his teen modeling Web site, www.trueteenbabes.com. The new charges resulted from a new alleged victim coming forward who claimed that Grady tried to force her to perform sex acts, touched her inappropriately and provided her with alcohol.⁷ Authorities are investigating whether as many as 50 other girls were allegedly victimized by Grady as well.⁸

Cases such as Grady’s likely prompted another new Bill in Congress, called the “Child Modeling Exploitation Prevention Act,” (“CMEPA”), sponsored by Representative Mark Foley (R-Florida). The Bill seeks to ban all Web sites featuring controversial images of preteen children. “These Web sites are nothing more than a fix for pedophiles,” according to Foley.⁹ Some experts have concluded that the law would prohibit all commercial photography of children since the Bill does not verify how to distinguish between legitimate modeling and “exploitative modeling.”¹⁰

More action inside the Beltway: The House Commerce Committee was busy approving a bill that will substantially impact the adult Internet industry. The bill, entitled the “Family Privacy Protection Act of 2002,” would require Web sites containing adult material, hate speech or other material deemed “harmful to minors” to give up their .com Web addresses, and reregister in a new Cyber-Red-Light District using an adults-only Internet domain such as “.prn.” The Bill would also impose prohibitions on email or sexually oriented advertisements directed at minors without certain identifying marks and notices.¹¹ Finally, the Bill would criminalize the act of filming individuals for a “lewd and lascivious purpose” without that person’s consent. Essentially, the Bill seeks to prohibit actual voyeuristic images and content. Currently, videotaping, unlike audio surveillance, is only illegal in a small number of states.¹²

All of these new bills floating around in Congress have renewed calls for the creation of an adult webmaster trade organization to conduct, amongst other things, lobbying efforts in connection with these proposed new laws. This onslaught of new legislation may prove to be a sufficient motivator for the industry to finally organize, but time will tell. The rumblings in the industry indicate that leaders may be serious this time.

MasterCard gave the adult industry a scare when it proposed to stop third party billing transactions.¹³ The move would have potentially eliminated transactions by popular third party billing programs such as CCBill, iBill and PayPal. The change was aimed primarily at the adult and gaming industries, which have a higher occurrence of credit card fraud and identity theft.¹⁴ MasterCard later backed off on the proposed change to the collective relief of pay sites everywhere.

Celebrity Web sites were dealt a serious blow by United States Federal Court Judge Lourdes Baird, who sent shockwaves through the industry by ruling that billing companies, such as Adult Check, could be held liable for illegal content found on sites which they service.¹⁵ Judge Baird found in the recent ruling that Adult Check may have an actual partnership relationship with the sites in its program rendering them jointly liable for illegal celebrity content or copyright violations. This author has counseled Webmasters for years against the use of the term “partnership program” to describe affiliate relationships. The recent Adult Check ruling further reinforced that advice.

Poor Al Goldstein: In one month, he announced that his print newspaper was basically dead, and was later sentenced to jail for a period of sixty days as a result of his aggravated harassment conviction involving his former secretary.¹⁶ “Porn in print is finished, there is just too much product out there on video and the Internet,” Goldstein said.¹⁷ Penthouse circulation has plunged from five million copies per edition in the 1970s to just around 650,000 copies currently.¹⁸ Xavier Hollander sums it up this way: “Goldstein, Guccione and Hefner, they had fun, they made money, they caused the world to change. I think they’ve earned a rest.”¹⁹ Goldstein won’t be able to rest quite yet; he plans to appeal his sentence.

On a positive note, another adult video company has been cleared of obscenity charges. Jeff Steward, owner of JM Productions, pled “no contest” to a nothing charge of “creating a public nuisance.”²⁰ In exchange for the plea, all obscenity charges against Steward and his company were dropped, and all property seized by the government was returned. The tapes charged in this case were Liquid Gold 5 and American Bukkake 11. For his part, Steward described the City prosecutors as the “American Taliban” and claimed the police put him through “a year of hell.”²¹ One obscenity case remains pending in Los Angeles County  the charge against Max Hardcore. It does appear, however, that City prosecutors have reevaluated their position on prosecution of adult videotapes.²² The City’s enforcement policy is over 20 years old, and they have finally recognized that much has changed.

The video game industry was dealt a significant blow by District Judge J. Limbaugh, who ruled that violent video games such as Doom^TM, Mortal Kombat^TM, and Fear Effect^TM do not constitute protected speech within the meaning of the First Amendment.²³ The Judge cited previous Supreme Court precedent and held it is “possible to find some kernel of expression in almost every activity . . . but such a kernel is not sufficient to bring the activity within the protection of the First Amendment.”²⁴ Previous cases have held that video games do constitute speech for purposes of First Amendment analysis.²⁵ Judge Limbaugh’s decision involved a St. Louis County ordinance which required that minors be prohibited from playing violent video games without a parent or guardian’s consent. The law was challenged by the industry’s trade group, the Interactive Digital Software Association, who claimed that the ordinance violated the First Amendment. In a devastating decision for the video game industry, Judge Limbaugh found that the games were not sufficiently expressive to constitute speech, and that even if they were, the County had a sufficient compelling interest in regulating the content of the expression in the manner chosen. Hopefully the District Court’s decision will be appealed.

A number of employees have once again lost their jobs for activities associated with the adult Internet. For some reason, this trend continues to be generated out of the State of Arizona, where several employees have lost their jobs due to associations with adult Web sites. A Maricopa County Medical Examiner’s Office employee, April Marshall, was terminated less than a day after her government employer found out about her involvement with an adult Web site. Ms. Marshall appeared as a model on www.SweetJordan.com. County officials learned of her involvement through an anonymous tip, and took swift action by terminating Ms. Marshall shortly thereafter.²⁶ The County disputes that the adult Web site had anything to do with their sudden firing decision, but blamed the decision on the fact that Ms. Marshall failed to answer the phone quickly enough.²⁷ A number of federal government employees were also terminated for sending sexually explicit messages and other “unacceptable” content using the state email system. The Washington State Department of Labor and Industries fired six employees, and disciplined two others.²⁸

Since it is always appropriate to keep things in perspective, United States Webmasters should once again be thankful they live in a country with a First Amendment. It was recently announced that the country of Kuwait had shut down fifty Internet cafes for offering access to adult Web sites.²⁹ Adult images are strictly forbidden in Kuwait.³⁰ The government is expected to unleash a new set of regulations applicable to Internet cafes soon. Didn’t we free that country just a few years ago?

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, with offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com or www.FreeSpeechLaw.com.

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

The big news this month was the U.S. Supreme Court’s ruling which struck down the Virtual Child Pornography law (“CPPA”) as unconstitutionally overbroad. This is a victory for the Free Speech Coalition and for the First Amendment. The Court ruled that the law is inconsistent with the requirements of Miller v. California, which requires that materials involving adults must appeal to the prurient interest before they can be criminalized. Moreover, the CPPA provided for severe punishment if just a single scene of a movie contained a graphic depiction of prohibited sexual activity. This is inconsistent with the First Amendment, which requires that a work’s artistic merit be evaluated as a whole, and not dependent on the presence of a single scene. The Court noted that CPPA is not supported by the traditional reasons for outlawing child pornography. The CPPA prohibits speech that records no crime and creates no victim by its production. The alleged harm, future criminal acts by pedophiles, does not necessarily flow from the speech. Thus, the court held that where speech is neither obscene nor the product of sexual abuse, it has First Amendment protection. The impact of this decision will be debated for many years to come, but it clearly represents a resounding victory for First Amendment principles.

The adult Internet community was reeling as details were made available regarding the arrest of James Steven Grady on child pornography charges. Investigators claim that Grady lured underage girls to pose for sexually exploitive photo shoots, and posted the images on the Internet.¹ Grady was well-known in the adult Webmaster community, and distributed content for numerous Websites. Webmasters across the nation frantically scoured their servers for potentially illegal images as law enforcement announced that the investigation expanded from Colorado into Texas, Florida and Nevada, where Grady also allegedly maintained operations. Law enforcement claimed that the case likely involved the largest child pornography operation in state history. Investigations even popped up in this author’s hometown of Seminole County, where a female model was interviewed regarding her contacts with Grady. Some of the models stepped up and defended Grady, claiming that they were not pressured to strike sexually suggestive poses, and that all modeling was consensual.²

This law enforcement action serves as a stark reminder to the adult Internet community: “Know your content producer.” Many adult Webmasters purchase content from less than reputable producers, and simply rely on the representations of the producer that all models are over the age of 18, and that sufficient §2257 records have been compiled for all photo shoots. While lawyers commonly advise “secondary producers,” such as Webmasters, that they need not act as records custodians or physically maintain copies of executed Model Releases, failing to do so can come with a price. Without the records, Website operators can never be sure that the models depicted on their site are over legal age, and have produced valid identification. If the content producer is alleged to have created illegal images, the Webmaster has no defense other than ignorance. You may not get very far in court with the defense of: “but I thought she was 18.” Sexy photos of minors are contraband, just like illegal drugs. And, depending upon what the Supreme Court says, the same may be true for anything that appears to be child pornography, even if it is not!

The proliferation of Lolita sites and “youth erotica” on the Internet may have serious consequences for the adult Webmaster community. Child pornography has gone from a dirty, underground secret to a booming commercial business in recent times. Cases such as Grady’s do not help the adult Webmaster community’s efforts draw a distinction between constitutionally protected adult erotica, and illegal child pornography. The adult Webmaster community simply cannot afford to associate itself with youth erotica in any way, shape or form. To the extent that this industry is viewed as linked with, or participating with underage content, it will be providing fodder for the censors who attempt to equate adult entertainment with child pornography at every turn.

Signs of a waning economy can be found all over the Web these days. A recent study showed that half as many Internet surfers were looking for sexually oriented Websites in May, 2001, as compared with a similar study done four years earlier.³ Some researchers associate the decline with a changing demographic of the average Web surfer.⁴ In 1997, surfers were made up primarily of academics and young guys who knew something about computers, but now you have more average people who may not be as interested in sex and erotica.⁵ Other researchers disagree, and believe that the change may be more attributable to the fact that people looking for sexually explicit material today are more likely to go to newsgroups where material can be obtained for free, rather than use a search engine.⁶ Another possibility is that the new has simply become an integral part of mainstream commerce. One thing is for sure, online erotica has put a hurtin’ on the traditional, softcore magazine such as Penthouse and Playboy. This fact has resulted in Penthouse’s circulation falling from a peak of five million copies a month to a new low of just about 650,000. Penthouse’s publisher, General Media, is 36 million dollars in debt and may not be able to meet interest repayments of nearly 9 million dollars this year.⁷ The decline in traditional adult print sales thrills the anti-porn activists: “I’m delighted that Mr. Guccione may be going out of business,” says censorship crusader Andrea Dworkin.⁸ Activists like Dworkin should be careful what they ask for since: “The problem is that he is being replaced, quite possibly, by something that is much worse,” Dworkin added.⁹

Online financial woes have caused many Websites to litter their online presence with annoying “Pop up” ads, hawking everything from “psychic phone readings” to tiny digital cameras. Although virtually unheard of a year ago, they now appear on one third of the largest Websites.¹⁰ Adult sites have included these, along with other annoying (and possibly deceptive) advertising gimmicks for years, however. The end result of all of this is to make the World Wide Web appear something closer to a carnival midway, with barkers shouting out from behind every circus tent. Most states and the federal government have enacted deceptive and unfair trade practices legislation, that may well make many of these promotional schemes illegal. Webmasters who pay close attention to their content issues, often gloss over or ignore the legality of their advertising. In these times where more Webmasters are competing for fewer and fewer consumer dollars, legal issues relating to questionable promotional tactics should not be overlooked.

Last month we reported a stunning 5 million dollar judgment rendered against Arco Media Group, Inc. in connection with a lawsuit brought by a Southwest Texas State University student for invasion of privacy and emotional distress after her image was used to promote the “Wild Party Girls” video without her permission.¹¹ However, what the courts giveth, the courts can taketh away. This month, Judge Charles Ramsay set aside the default judgment since the Plaintiff failed to properly name the Defendant in the case, which actually goes by the name “The AccroMedia Group, Inc.”¹² As they say, easy come, easy go.

The Federal Communications Commission recently dismissed complaints registered against the Victoria’s Secret lingerie show, which aired in November, 2001.¹³ The show featured scantily-clad models wearing Victoria’s Secret lingerie during primetime, and generated complaints to the FCC. However, the Commission stated, in dismissing the complaints: “Based on the information you and other complainants have provided to us, you have not demonstrated that the sexual aspects of the material was, in context, so graphic or explicit as to be patently offensive.”¹⁴ Game Recap: Victoria’s Secret models: 1; Prudes: 0.

An important First Amendment case is winding itself through the court system in Philadelphia. It involves the United States government’s third attempt to control online erotica, which is labeled “The Children’s Internet Protection Act,” (“CIPA”). With this legislation, the government attempted to limit the public’s access to online erotica by denying funding to any public library that refused to install sufficient filtering devices designed to block access to online erotica. “Our perspective is that for all of us to govern ourselves effectively, we need access to information and it’s not up to the government to say what that information is,” said Judith Krug, Director of the Office for Intellectual Freedom at the American Library Association.¹⁵ Opponents of the law argue that enormous amounts of innocuous information is blocked by existing filtering software, and that explicit photographs can still be accessed unless accompanied by suggestive or objectionable text.¹⁶ The case is currently being considered by the Third Circuit Court of Appeals, and that decision may be handed to the United States Supreme Court.

One final case worth mentioning is a decision from the Colorado Supreme Court which recognized the right to anonymously purchase reading material, free from governmental interference.¹⁷ In this case, a search warrant was served on the Tattered Cover Bookstore demanding records of all individuals who purchased two books on drug manufacturing from the store. The trial court ordered the store to turn over the records, but the Colorado Supreme Court reversed, holding that the First Amendment and the Colorado Constitution protects the fundamental right to purchase books anonymously.¹⁸ These arguments may have significant implications for adult Webmasters who face governmental requests or court orders for subscriber or membership information.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters runs the firm’s Florida office, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com or www.FreeSpeechLaw.com

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

Online voyeur houses top the legal news this month; first with the United States Supreme Court refusing to disturb the very favorable legal ruling for the Voyeur Dorm. The Voyeur Dorm solidified its legal victory by convincing the United States Supreme Court to leave its appellate court victory intact, despite desperate pleas by the City of Tampa, Florida, which pressed the High Court to take the case.¹ Last year, the Atlanta-based Eleventh Circuit Court of Appeals ruled that Tampa’s zoning laws do not apply to “virtual space” on the Internet, despite the City’s attempt to require the Voyeur Dorm to comply with the City’s adult entertainment regulations.² While the appeals court avoided the sticky constitutional issues potentially raised by the case, the ruling may cause some local governments to reconsider any attempts to regulate the Internet through imposition of local zoning restrictions.

Voyeur Dorm’s legal victories, however, did not deter a Florida homeowners association from trying to shut down a gay voyeur house in Seminole County, Florida. That dispute is currently raging in the author’s hometown of Altamonte Springs, Florida, and may set a dangerous precedent for voyeur Websites nationwide. The voyeur house at issue operated inconspicuously until a neighborhood child accidentally tossed a baseball through one of the house’s windows, exposing cameras and promotional material for the Website. County law enforcement was unable to identify any crime being committed, or any other enforcement mechanism that could be used to shut the operation down, despite repeated urgings by “concerned” neighbors. Finally, the homeowners association identified some archaic property restrictions, prohibiting the operation of a business in a residence. Using that legal argument, the homeowners association filed suit against the property owner, seeking to shut down the gay Internet voyeur site.³ Of course the homeowners association is unconcerned with the many other businesses almost certainly operating in homes throughout the subdivision. This case illustrates the increasing tension between traditional land use laws and the proliferation of home-based Internet businesses. Online businesses create none of the typical secondary effects of traditional, brick-and-mortar businesses such as traffic congestion, parking problems and urban blight. Important to note is the fact that the City of Tampa did not seize upon the argument that Voyeur Dorm was operating a business without a permit in a residential zone. That argument will now be litigated in the Seminole County case, which is certainly one to watch.

The Government’s “Protect the Children” battle cry received a boost recently, with over 50 arrests announced by the FBI in “Operation Candyman,” an online child pornography sweep involving more than 89 people in 26 states.⁴ Those arrested included two Catholic priests, a school bus driver and at least one law enforcement officer.⁵ The Government also recently announced that the child pornography sting has been widened to ten other countries, where search warrants were executed on people suspected of exchanging illegal images on the Internet.⁶ From the searches, customs agents seized 12 computers, more than 600 CDs, floppy disks and external computer drives, hundreds of videos, a digital camcorder and a book on how to seduce children. Attorney General John Ashcroft, in describing the operation stated: “A new marketplace for child pornography has opened in the dark corners of cyberspace. There will be no free rides on the Internet for those who traffic in child pornography.” The Government’s case may be falling apart, however, since several Defendants are raising the question of how it will prove that any particular individual was behind the keyboard when the illegal images were exchanged.⁷ A few weeks before the arrests, Ashcroft claimed that the mission of the Justice Department was endowed by God: “The guarding of freedom that God grants is the noble charge of the Department of Justice.”⁸ Nothing like doing the Lord’s work!

Efforts to protect children on the Internet has resulted in a Congressional Bill to set up a kid-friendly zone on the Web, free of violence, pornography or other material deemed inappropriate for children.⁹ The Bill would direct the operator of the “.us” Internet domain to set up a “.kids” subdomain for Websites targeted at children under the age of thirteen.¹⁰ The Bill was introduced by Representative Fred Upton, whose Telecommunications Subcommittee unanimously approved the Bill.¹¹ The Energy and Commerce Committee will take up the Bill by the end of March, and it may become law as soon as July, 2002. The government originally put pressure on the Internet Corporation for Assigned Names and Numbers (“ICANN”) to create a .kids top-level domain like .com and .net. However the government backed off of that plan last fall after it was informed that it could be difficult to overrule ICANN, which is not under direct government control.¹² The proposed new .kids subdomain would be overseen by the Commerce Department’s National Telecommunications and Information Administration. The content would be policed by NeuStar, Inc. to make sure that it remained free of inappropriate content.¹³ While many in the adult Internet community agree that a kid-friendly domain might be a good idea, such government-imposed content control of any domain on the Web may draw complaints of censorship.

Internet service providers have also become the focus of state and federal legislation. The State of Pennsylvania recently passed a law requiring Internet service providers to block child pornography.¹⁴ Under the new law, ISPs with customers in Pennsylvania will be legally responsible for blocking access to child pornography, with maximum penalties including prison time for repeat offenders.¹⁵ This law is believed to be the first of its kind. However, the law requires the State Attorney General’s Office to notify ISPs of what content should be blocked.¹⁶ This requirement may result in the law having somewhat limited success in accomplishing its stated goals. It is contemplated that prosecutors would, after obtaining a court order, provide the ISPs with a list of Websites and other items that must be blocked. However, child pornographers have been known to readily move to other Websites once existing sites have been identified by law enforcement.

The law carries penalties of $5,000.00 for a first offense, $20,000.00 for a second and thereafter violators are subject to fines of $30,000.00 and up to seven years imprisonment. ISPs have argued, in response to the law, that they serve only as conduits of information, and do not actually control content. Essentially, the ISPs argue that they are tantamount to the Postal Service which delivers letter without knowing what’s inside of the envelopes.¹⁷

At the same time, the federal government is floating contradictory legislation designed to protect Internet service providers from the criminal actions of third party users. Under current law, ISPs are protected from civil liability for content posted by a third party.¹⁸ Under the new Bill, introduced by Representative Robert Goodlatte, R-Va, ISPs would be protected from criminal charges, and a uniform standard would be set for ISP liability.¹⁹ The Bill is entitled “The Online Liability Standardization Act of 2002,” and was prompted by a criminal charge against a New York-based ISP, BuffNet, in 2001. BuffNet was charged with a misdemeanor for facilitating child pornography because it allowed access to a bulletin board containing images of a child pornographic nature. In February, 2001, the company pled guilty and a judge ordered BuffNet to pay a $5,000.00 fine.²⁰ The proposed Bill contains an exception where a senior employee knew about illegal activity of a third party.

In more news on the voyeur front, the creator of “Wild Party Girls” was ordered to pay five million dollars to a Southwest Texas State University student who appeared in advertisements for the video.²¹ The case arose from the photographing of the student taking off her shirt at a wet T-shirt contest in Mexico on her twenty-first birthday. A few months later, the student saw herself in national ads for a “Wild Party Girls” video on the E! cable network, with a red stripe proclaiming “Too hot for TV” stamped across her naked breasts. The student knew something was wrong when strangers began asking her to take her top off.²² The student sued the Florida-based Arco Media Group, Inc. for invasion of privacy and emotional distress, along with E!. Arco never responded to the complaint, and the judge entered a default judgment in the amount of five (5) million dollars. The student’s lawyer argued that Arco’s representatives conspired with bartenders to get pretty young women to drink alcohol and convince them to enter wet T-shirt contests which would then be filmed. The lawsuit against E! will continue. E!’s lawyers claim that the network simply sold airtime to Arco, and had no duty to censor the advertisements wholly produced by third parties. The student plans to donate part of the funds collected by her judgment to a women’s shelter. This judgment is one of the first of its kind against the makers of videos with nude college women, for invasion of privacy. The legal question involved is whether privacy protections extend to individuals who take their clothes off in public at large events where many people have video cameras. Even if such an expectation of privacy is not found to be reasonable, and additional question is raised whether companies have the legal ability to profit from such images by placing them on the Internet.

The adult video industry was prepared to receive some advice regarding current community standards for obscenity in the case against Adam Glasser, a.k.a. Seymore Butts, but those charges recently resulted in a settlement. On March 20, 2002, Glasser announced that the charges had been resolved through a settlement agreement with City Prosecutors. The case involved one of Glasser’s videotapes, Tampa Tushy Fest, which included a controversial “fisting” scene. The settlement required Glasser’s company to plead No Contest to the charge of creating a public nuisance, and pay $1,000.00 to a victim’s restitution fund.²³ “I feel great,” said Glasser in a recent interview. “I feel like the fight’s been well worth it, although very stressful at times,” he added.²⁴ All obscenity charges against Glasser and his mother were dropped as a result of the settlement agreement, and all materials seized during the investigation will be returned. As part of the deal, Glasser must make a version of Tampa Tushy Fest available that omits the controversial fisting scene.²⁵ The depiction of fisting has long been considered to be taboo in the adult video industry, although the Web is replete with depictions of this sex act.

In closing, it is worth mentioning that three significant United States Supreme Court decisions involving erotic speech issues are right around the corner. Adult Internet industry leaders should watch for these decisions within the next few months since any of these cases could have a significant impact on the industry.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters runs the firm’s Florida office, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com or www.FreeSpeechLaw.com

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

If the first decision by the United States Supreme Court on First Amendment issues this term is any indication of what the other three will look like, the Commerce Clause my be the best defense against Internet content regulations. The High Court voted unanimously to uphold a Chicago Park District regulation providing virtually unlimited discretion to the government in granting or denying applications to use park district facilities for protests and other gatherings. The Justices rejected the First Amendment claims and essentially allowed the government to pick and choose which groups would be entitled to use federal property to engage in free speech. Fortunately, the Court did not address the issues of most concern to the brick and mortar adult industry, that of “procedural safeguards” in adult use licensing schemes. The Court rendered a mercifully narrow opinion which is basically limited to specific circumstances. More fortunately, the Court left open the possibility of demonstrating First Amendment violations by showing that the licensing scheme was unconstitutional as applied. Of the four First Amendment cases being considered this term, the Thomas case is of least relevance to the adult Internet industry, but the unanimity and tenor of this decision is somewhat disturbing for any individual or business that depends on the First Amendment for protection. Should the First Amendment receive the same short-shrift analysis in the remaining cases, creative lawyers may need to turn to other legal doctrines as an alternative for preserving free speech online. The Commerce Clause has been recognized in several recent decisions as a constitutional protection against inconsistent state regulation of the Internet. Let’s hope the Supreme Court doesn’t take any Commerce Clause cases next term!

Attorney General John Ashcroft revealed his true colors recently by ordering that massive draperies be used to conceal semi-nude statutes in the Great Hall of the Justice Department Building. At the end of the hall in this room, on either side of the stage, are two enormous aluminum statutes; one female figure represents the Spirit of Justice, and a male figure to the right is the Majesty of Justice. One breast of the female figure is entirely exposed.  In the past, photographers have writhed on the floor, flat on their backs, in order to shoot a picture of former Attorney General Edwin Meese, on the day he proudly released his Final Report of the Commission on Pornography, with the breast of the statute peeking over his shoulder. When Ashcroft took office, many wondered how he would feel about the figures. He didn’t seem to mind until he was photographed giving a speech about fighting terrorism with the breast of the statute visible over his shoulder. That was the final straw for the strongly religious and conservative man, who insisted that the artwork be appropriately attired with draperies at the cost of just over $8,000.00.

It appears that the FBI will use some of its over $900 million in new funding to bring on over 900 new agents by September 30, 2002.⁷ The focus of the new FBI agent hiring will be on those with computer, science and information technology skills, along with counter-terrorism and foreign language abilities. Between hundreds of millions of dollars in new funding, hundreds of new agents and many excuses to investigate adult websites, the adult Internet industry is bracing for a law enforcement onslaught. Religious groups couldn’t be happier about the new focus on law enforcement against the adult industry. As broadcast on PBS on February 7, 2002, it appears that the new administration intends to make prosecuting pornography a priority. But why stop at erotica? A long list of Christian and conservative organizations is calling on federal regulators to investigate the FOX Network, claiming that it systematically violates the FCC’s indecency rules. The groups include Focus on the Family, Morality in Media, the Christian Coalition, the Citizens for Community Values, the American Family Association, the American Decency Association, and American Values. The groups cited “Boston Public” as one of the primary targets of their disdain. The joint letter from the groups claimed that no child should ever see shows like “Boston Public.” FCC Commissions Rules state that no radio or television station shall broadcast obscene material at any time, or broadcast “indecent” material from 6 a.m. to 10 p.m.

In lighter news, an appeals court has upheld the right of a former Playboy Playmate to use the terms “Playboy” in the metatags of her own Website. The dispute centered around the attempt by Terri Welles to include the terms “Playboy” and “Playmate” in the biographical references in her Website, and in the search engine-friendly metagags at TerriWelles.com. Playboy, which aggressively enforces its trademark rights, sued her in February of 1998, in a California federal District Court. The trial court ruled in her favor, and that ruling was affirmed by the Ninth Circuit Court of Appeals which decided that the references to her former title, as a Playboy Playmate, represented “fair use” of the Playboy name. Attempting to describe her association with the adult entertainment giant without using its name would require her to venture into absurd descriptive phrases, according to the initial trial court ruling. Because the metatags did not repeat themselves extensively, her site would not be at the top of the list of search results for surfers seeking “Playboy” on search engines. The practical lesson learned from this case is that webmasters may be legally entitled to use certain trademarked terms in their metatags without violating trademark rights, in the appropriate circumstance. As always, it is important to consult with competent legal counsel prior to including any trademarked words on your Website.

The odd story this month comes from Yankton, South Dakota. A recent Senate Bill introduced by Democratic State Senator Moore would ban the sale of “Porn Cards” to anyone under the age of 18. The prepaid cards allowing access to adult entertainment sites on the Internet have boomed in popularity throughout the United States and abroad. According to Moore, “I don’t think we can stop people from distributing these things, but we can stop the sale in South Dakota.” Huh? The ACLU counters that Moore’s statement sounds like censorship. Given the number of free adult Websites that proliferate on the Internet, these legislative actions appear to be an exercise in futility. It could be worse: Seoul, South Korea’s answer to the availability of adult images online is to indict 19 Internet adult broadcasting companies, and issue warrants for 13 others. Seoul has also proposed legislation to criminally charge those who send Spam emails. Too bad the First Amendment does not apply in Seoul; change that to the Commerce Clause.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters runs the firm’s Florida office, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com or www.FreeSpeechLaw.com

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

The first year of the new Millennium ended without any stunning fanfare or any further shocking terrorist attacks. As we sat on the edge of our collective seats during the last quarter of 2001, waiting to see what will happen next, our government began methodical preparations for the long political and military battles ahead. Potentially caught in the crossfire will be the adult industry, which is on the losing end of the confluence of numerous events destined to change the legal climate in which adult webmasters operate.

The U.S. Supreme Court has now heard arguments in four First Amendment cases, all of which could be decided against the Industry. At the same time, the FBI just received an influx of $379 million to be used to beef up its investigative technology.¹ We will now see an army of gumshoes armed with not only the latest laptops and broadband access, but also a host of new investigative powers thanks to the Patriot Act, signed into law recently – not that the feds needed a reason to investigate the adult webmaster community. Moreover, the fact that terrorists were said to have communicated through the posting of sexually explicit images on the Internet did not help things.² To add to this pressure cooker, Red Herring magazine recently revealed the extent to which child pornographers have invaded both adult and mainstream Internet services such as domain registrars, hosting companies and community publication sites such as Geocities.³ Apparently, these services have been used without the knowledge of their owners, to proliferate the despicable child porn industry, and that has drawn the attention of two sworn enemies of the adult industry, Bruce Taylor and Robert Flores.

For anyone who does not know, Bruce Taylor is the President and General Counsel for the National Law Center for Children and Families, and a long-time advocate of censorship. While he is not in a position to initiate any investigations or prosecutions, Robert Flores is. Mr. Flores was recently appointed to the Department of Justice’s Office of Juvenile Justice Delinquency Prevention. That is a high-level position that includes broad investigative authority. That dynamic duo made it clear that blind ignorance to illegal content on the Internet will not serve as a defense, and that it’s just a matter of sitting back and waiting to see who will take the hit first.⁴ Taylor has previously called for obscenity prosecutions against media giants such as AOL and Yahoo! Now he says: “Nobody is immune.”⁵

Even if you steer far clear of child pornography on your servers and links, it may be that a significant amount of teen or youth content will be declared illegal child pornography if the Free Speech Coalition looses its appeal to the United States Supreme Court in the Child Pornography Prevention Act case.⁶ Should the relatively conservative High Court uphold the law, any images that “appear to be” of a minor engaged in sexual activities can be treated the same as child pornography. The federal sentencing guidelines for such offenses are staggering. A recent calculation performed by our firm for a very typical webmaster prosecuted for commercial distribution of child pornography resulted in a recommended sentence of between 180-210 months in a federal prison.

The Justice Department finally got around to appointing a United States Attorney to spearhead its forthcoming obscenity prosecutions. The appointee, Andrew Oosterbaan, has served as Deputy Chief of the Child Exploitation and Obscenity Section (a/k/a the “God Squad”) since January, 2000.⁷ Attorney General John Ashcroft says that Oosterbaan “…will diligently investigate and prosecute child exploitation and obscenity crimes. Andrew’s many years of experience in complex criminal matters should put on notice those who seek to exploit children or violate our nation’s obscenity laws will be punished to the fullest extent of the law.”⁸ Despite these ominous words, Ashcroft’s selection could have been much worse; the Religious Right wanted Bruce Taylor, Robert Flores (both discussed above) or Patrick Trueman, Director of Affairs for the American Family Association.⁹ On the other hand, given the conservative bent of our current Attorney General, it makes little difference who actually directs the prosecution of obscenity cases for they will be brought just the same. The censorship groups are already demanding that Oosterbaan make obscenity prosecutions a priority, “Obscenity has exploded through videos, through satellite, through cable and especially the Internet, so it is extremely important that this be make a high priority by the new chief,” says Jerry Kirk, another censor and co-chairman of the “Religious Alliance Against Pornography.”¹⁰

One interesting case to watch on the obscenity issue is the new challenge to the Communications Decency Act (“CDA”), which was filed on December 11, 2001, by the National Coalition for Sexual Freedom, along with a fetish photographer. The case was filed in the Southern District of New York, and names the federal government and John Ashcroft as defendants.¹¹ In 1997, a unanimous Supreme Court struck down the “indecency” provisions of the CDA on First Amendment grounds, but the obscenity prohibitions were not challenged. Currently the CDA makes it a federal felony to transmit any obscene images over the Internet. Obscenity is based, in part, on community standards. One Appeals Court has held that the concept of community standards cannot be constitutionally applied to a global medium like the Internet. If community standards remain an element of the obscenity test, all online communications would have to be acceptable in every community since it is impossible, under current technology, to block particular communities from accessing any given images. Depending on the outcome of this case and the COPA case before the High Court, the federal government may be left without a law to regulate sexually oriented communications over the Internet. On the other hand, the government could try to replace the CDA with something worse. This is certainly an issue to watch.

The adult industry launched a sneak attack on domain names, as many previously registered domain names expired in December, 2001. Numerous adult websites took over the expired URL’s to the dismay of the previous owners who overlooked re-registration. “We were shocked,” said Carole Martin, Webmaster for the Diocese of Brooklyn, New York whose parish’s domain name was obtained by an adult website.¹² This appears to be a growing trend in the adult industry, and one that probably did not do anything to endear the Religious Right.¹³

It appears that movie-style ratings may soon be coming to Internet Web sites. The Internet Content Rating Association (ICRA) recently announced a voluntary content rating system that would allow users to screen out Web sites that contain violent, sexual or other possibly objectionable content.¹⁴ The addition of such voluntary ratings to adult websites couldn’t hurt the Industry’s image and provide additional ammunition demonstrating that adult webmasters are trying to keep their content away from minors.

This month’s odd story comes from the Federal Communications Commission. After millions tuned in for the Victoria’s Secret racy fashion show in November, FCC Commissioner Michael Copps called for an investigation.¹⁵ The reason for his investigation? His 27 year old daughter thought it would be inappropriate for children to watch.¹⁶ I wonder what his kids watch; Law & Order? Hey Commissioner, have you seen MTV lately?

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters runs the firm’s Florida office, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com or www.FreeSpeechLaw.com

Celebrity Fakes: Just a Joke or Real Trouble?

By: Lawrence G. Walters

www.FreeSpeechLaw.com

The adult Internet world is replete with images of nude celebrities. Most of the available content consists of a celebrity’s visage morphed onto a nude body of someone else, closely resembling the star’s figure. The poses and sex acts in which the celebrity appears to be engaged are limited only by the Website designer’s imagination and budget. It is not uncommon to find realistic images of media stars engaged in explicit sexual behavior even though those celebrities have never appeared nude in the mainstream media. Websites containing such depictions have become both popular and profitable. However, this content has caused an uproar amongst celebrities and those representing their rights of publicity.

Once again, computer technology has outpaced the law, and therefore no specific set of legal principles applies to computer-morphed celebrity images. The United States Supreme Court is currently wrestling with a similar question, vis á vis computer morphed child pornography, which is created by placing the head of a child on the nude body of an adult. While Congress has passed legislation criminalizing computer-generated child pornography, morphed images of adult celebrities have, thus far, not been the subject of specific state or federal legislation. Accordingly, the emerging legal question is whether celebrity fakes constitute a “parody” protected by the First Amendment to the United States Constitution, or an illegal means of capitalizing on the celebrities’ right of publicity.

Potential Claims

The creators or operators of celebrity fake sites are subject to various potential claims. The most likely causes of action are defamation, right of publicity violations, invasion of privacy claims, copyright infringement, and/or trademark infringement, dilution or disparagement. With the exception of copyright infringement, which is exclusively federal in nature, the remaining claims might be brought in either state or federal court.

A. Copyright

A copyright claim could be asserted if the celebrity fake site posts a photograph that is substantially similar to a copyrighted image, without permission of the copyright holder. Since one cannot obtain a copyright on one’s image or likeness, the celebrity would be an unlikely copyright claimant. The owner of the copyright, such as a photographer or content producer would generally bring such a claim, perhaps at the behest of the celebrity. However, the copyright holder can assign (i.e. transfer) this claim to any third party, who then has the right to bring the claim. If the bulk of a copyrighted image is used on a celebrity fake Website, such that it can be labeled an infringing “derivative work,” copyright law provides powerful remedies. Under the Digital Millennium Copyright Act, (“DMCA”), the copyright owner need simply serve a DMCA Notice on the Website’s host and billing company, demanding that the site be disabled or removed immediately. If the celebrity fake image is, indeed, found to be infringing on someone’s copyright, and it is not removed promptly upon receipt of the DMCA notification, both the Webmaster and the hosting/billing companies will be liable for copyright infringement. If the image was timely registered with the U.S. Copyright Office, statutory damages for copyright infringement range from $750 – $30,000 per infringing image, plus attorney’s fees. If the Website contains hundreds of images and galleries, the damages can easily approach the six-figure range.

B. Trademark Infringement, Dilution or Disparagement

A less likely claim that might be asserted is trademark infringement, dilution or disparagement under the Lanham Act.¹ If the celebrity uses a specific trademark, logo or trade dress which appears in the computer-altered image on the celebrity fake Website, a claim may be asserted for a trademark violation. For example, if the celebrity is dressed (or partially dressed) in her trademarked line of clothing, or is holding a product he or she endorses, a trademark claim may be soon to follow. The trademark owner will inevitably argue that associating a protected trademark with adult entertainment dilutes or diminishes the mark’s value. The celebrity might also bring a claim under the Lanham Act for unfair competition or what is commonly known as “palming off.”

C. Defamation

State laws provide a remedy to those who are defamed by publication of untrue facts to third parties. Defamation laws do not only apply to the written word – video and graphic images can be the subject of a defamation action as well. For example, if a celebrity fake includes images of Brittany Spears engaging in fellatio with Justin Timberlake, and Ms. Spears can prove that such depiction is false, an action for defamation might be asserted. Numerous defenses may come into play in such instances, as will be discussed below, such as the fact that the image was not presented as an accurate depiction of a real event but as a “fake.” An untrue message that the above occurred is defamation, and may constitute the more serious tort of defamation per se.

D. Privacy/Publicity Claims

State law also commonly provides for several types of invasion of privacy claims that could be raised by the celebrity; these include “false light” invasion of privacy, unauthorized publication of private facts and unauthorized capitalization on the celebrity’s right of publicity. Those claims center around the publication of facts, or depictions of events, that cast the celebrity in an unfavorable light, or attempt to profit on protected publicity rights. A celebrity, him or herself, is most likely to assert those kinds of claims.

All famous individuals have the right to profit from their own image, likeness and popularity. When someone unfairly tries to capitalize on a celebrity’s image for their own gain, a claim may be generated. The First Amendment imposes certain boundaries to these sorts of claims, however. For example, legitimate news organizations are entitled to accurately report on newsworthy events involving celebrities without violating these privacy/publicity rights, even if the celebrity’s image and likeness appears in the story. What constitutes legitimate news organizations and newsworthy events remain blurry issues.

E. Miscellaneous State Law Claims

Each state may supplement the above-referenced claims by providing additional causes of action for those injured by celebrity fake activities. Some states may provide redress through unfair trade practices legislation, false advertising laws, or through common law claims such as intentional infliction of emotional distress. The First Amendment also limits the reach of such common law claims.²

Defenses

While celebrity fake content may generate a number of potential claims, several defenses exist that may partially or completely absolve the publisher of liability. The likelihood of success of some of these defenses has not been established as of yet, given the lack of litigation surrounding these issues. One published decision, however, discusses the types of claims and defenses that the court will entertain in connection with celebrity fake sites: The case was brought by Perfect 10, Inc., a magazine and Website publisher against Cybernet Ventures, Inc., d/b/a Adult Check.³ Perfect 10 alleged that Adult Check profited from stolen images of celebrities appearing on Websites associated with the “Adult Check Family.”⁴ Perfect 10 sued Adult Check for copyright infringement, trademark infringement, trademark dilution, wrongful use of a registered mark, violation of the right of publicity, unfair competition, false advertising and racketeering. Adult Check raised numerous defenses to these claims, including the failure to allege “willfulness” as to the copyright infringement, failure to establish a “pattern of racketeering activity,” in response to the RICO claim, lack of standing to sue for copyright infringement, failure to identify specific injury resulting from the alleged racketeering activity, failure to plead a distinct RICO enterprise, failure to show a nexus between racketeering and the Adult Check enterprise, and federal preemption. The court rejected the majority of these defenses, and refused to dismiss any of the claims against Adult Check.⁵ While the court asked for additional facts to establish some of Perfect 10’s claims, all of the causes of action were allowed to proceed against Adult Check. If the Perfect 10 case is any indication of how other courts will rule, operators of celebrity fake websites may find themselves defending a host of potential claims; many with serious consequences. The following are some defenses that might be considered in response to such claims:

A. Parody/Fair Use Defense

The fact that a particular work constitutes a parody of a protected work is not a defense in itself, but is one factor to be considered in determining whether the defense of “Fair Use” can be established. Fair Use is a common affirmative defense to a claim alleging copyright or trademark infringement. The Fair Use defense is designed to allow someone other than the holder of the trademark or copyright to use the product, mark, or work in some way that does not legally infringe on the owner’s intellectual property. Although the general rule is that “parody” is only one factor to be considered in determining Fair Use, if a court concludes that a use is a parody, it appears to universally defeat a claim of intellectual property infringement or even a claimed violation of the right of publicity. Parodies receive full protection under the First Amendment even though they are designed to entertain, rather than to inform. It is also irrelevant, under the First Amendment analysis, whether or not the parody is for profit; even a commercial parody is entitled to full First Amendment protection.

One crucial factor, which the courts consider in evaluating whether a particular allegedly infringing use constitutes a parody, is whether there is a reasonable likelihood of confusion so that the allegedly infringing product provides an alternate means of satisfying the demand for the original product. The courts will assume that a legitimate parody does not, and is not intended to, satisfy the demand for the original product. A protected parody should point out the distinction between the original and the parody, and therefore eliminate confusion between the original product and the parody. Courts also recognized that parody, unlike satire, cannot stand on its own; identification with the object of the parody is essential. In other words, just because it is humor, doesn’t mean it is parody.

The courts used to consider how much of the original work was appropriated in determining whether a claim of parody was viable. Under the old test, a parody’s use of the original could not appropriate more than absolutely necessary to accomplish the parody’s purpose. However, in 1994, the Supreme Court reformulated that analysis and held that it is not how much of the original is taken which is determinative, but the intent in taking it and to what use the original is put that determines whether a parody is Fair Use.⁶ Under current law, a successful parody would defeat claims for copyright and trademark infringement if it portrays the original, but also sends a message that it is not the original, and simply serves to criticize the original, thereby lessening the potential for confusion.

The seminal case recognizing the right to publish a parody involving altered images of famous individuals is Hustler Magazine v. Falwell.⁷ In that case, Hustler Magazine successfully argued that its outrageous depiction of Jerry Falwell’s first sexual experience, with his mother in an outhouse, was entitled to First Amendment protection as a parody. The court determined that no reasonable person would ever take the depiction seriously, and that even state law tort claims such as intentional infliction of emotional distress were barred by the First Amendment’s protection of free speech.

More recently, several cases have recognized that parody is a defense to right of publicity and other intellectual property claims. In Cardtoons, L.C. v. Major League Baseball Players Association,⁸ the a federal appeals court held that baseball cards featuring caricatures of major league baseball players did not infringe upon the players’ right of publicity since the cards were a legitimate parody, and therefore entitled to full First Amendment protection as social commentary on public figures engaged in a commercial enterprise. Another court decision giving credence to the parody defense is Mattel, Inc. v. Walking Mountain Productions,⁹ where the court held that an artist could appropriate entire Barbie Dolls, and alter them in order to comment or criticize the “Barbie ideal” and take photographs of the altered dolls without infringing on Mattel’s copyright, trademark or trade dress. Furthermore, simple photographs of the altered dolls did not satisfy the market demand for the original doll, thereby precluding any likelihood of confusion between the original and the parody.¹⁰ Another federal appeals court also recently held that a critic could use copyright-protected elements of an original work to create a new work that criticized or commented on the original without of being guilty of intellectual property infringement.¹¹ Although untested, the defense of Parody/Fair Use may apply to a celebrity fake site portrayed in a sufficiently satirical manner.

B. Newsworthiness

Another defense to claims of infringement, required by the First Amendment, is the defense of newsworthiness. Courts have recognized that limited use of protected images or publicity rights is necessary in order to accurately report on newsworthy events by legitimate news organizations.¹² While it may be difficult to determine what events in a celebrity’s sex life are newsworthy, and therefore covered by this defense, it is clear that depictions of fictitious events such as computer-generated images of celebrities that never existed in the real world, would not likely be protected by claims of newsworthiness. In order for this defense to be implicated, the celebrity content would need to be “real” images of arguably newsworthy events. Even then, the courts would inquire into the legitimacy of the Website as a news organization, and its real intent in publishing the images. The latter is a problem when the site specializes in erotica.

C. Truth

Truth is always a defense to libel and slander claims. In other words, defamation claims only apply to false statements of fact that negatively impact an individual’s reputation. If a Webmaster faced a defamation claim from a celebrity based on computer-altered images, “Truth” would be a difficult defense to establish since the images do not depict an accurate event. Put in other words, creating fake images which depict celebrities in poses or circumstances that never occurred may form the basis for a defamation claim, rendering the defense of truth impossible to establish. On the other hand, if the celebrity was actually captured in a public place posing nude, for example, and a Webmaster chose to post a photograph of such public pose, “Truth” may provide a defense to any defamation claim asserted in such circumstance. But the truth defense does not apply to other more applicable claims in such circumstance, such as violation of the right of publicity.

What Does This All Mean?

A publisher of celebrity fake images must tolerate a high level of risk to continue such an operation. The Webmaster may face publicity claims from the celebrities, or their representatives, along with intellectual property claims from photographers or trademark holders. If the Website clearly discloses that the photographs are not real, the likelihood of the celebrity prevailing on a defamation or false light claim is minimal. That is because the celebrity would need to prove that the Webmaster intended to make false statements of fact about the celebrity, or portray the celebrity in a way that is false while representing the depiction as true. A celebrity fake site is just that – fake. The publisher would have a difficult time convincing a judge or jury that the Website portrayed any real facts or circumstances relating to the celebrity’s sex life or real activities.

Depending on how similar the fake image looks to a copyrighted image, copyright liability may be imposed under a derivative work theory. If the fake image is readily distinguishable from the original image, and communicates an entirely different form of expression or idea from the original, establishing a copyright claim becomes more difficult. Even if the image is similar to the original, the defense of Fair Use will certainly be an issue. If the essence of the Website is satirical, critical or can otherwise legitimately be labeled a parody of the sex life of the celebrity, Fair Use may be established. On the other hand, a celebrity fake Website containing nothing but images of realistic looking sex acts by celebrities may be difficult to pigeon hole into the concept of a parody. Since there is no bright line distinction between what is satirical and what is an infringing work, competent counsel with experience in intellectual property and First Amendment issues should be consulted before establishing, or continuing to operate high risk content such as celebrity fake images. Courts will look at the overall intent and portrayal of the fake images to determine whether the Fair Use defense is applicable. While many courts may be hesitant to rule in favor of a sexually explicit Website on any issue, the parody and Fair Use defenses are strongly ingrained in intellectual property jurisprudence. As celebrity content continues to grow in popularity, these issues will wind their way through the court system and ultimately be resolved for better or worse. Until then, legal guidance is essential to assist the Webmaster in sorting through these obviously complex intellectual property issues.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters runs the firm’s Florida office, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com or www.FreeSpeechLaw.com.

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

It was back to business this month now that everyone, including the United States Supreme Court, has learned to live under the constant threat of terrorist attacks. The Anthrax infestation in the United States Supreme Court did not stop the Justices from hearing arguments in the Ashcroft v. Free Speech case at an off-site location. The case involved the constitutionality of the Child Pornography Prevention Act of 1996.1 As is widely known at this point, the law criminalizes images that appear to be minors engaged in sexual acts. During the argument, several of the Justices seemed to agree that the Act’s language could be overbroad. For example, Justice Stephen G. Breyer asked, “The movies ‘Traffic,’ ‘Lolita’ and ‘Titanic’ all have simulated sexual behavior by seventeen year olds, why wouldn’t people who rent these videos be guilty of possession of [child pornography under the Act?]”2 The attorney representing the Government claimed that the Act was passed because “the advent of computer technology allows the production of images that are virtually indistinguishable from actual photos.”3 Justice O’Connor, apparently concerned about criminalizing simple possession of simulated child pornography stated: “I don’t know what we’re supposed to do with a statute like this.”4 Justice John Paul Stevens pointed out that even “Romeo and Juliet” could be forbidden under the Act.5 A major concern with the constitutionality of this law was summed up by Justice Kennedy’s question: “What’s the government’s interest in preventing adults from playacting as children?”6 As written, the law criminalizes images of young looking adults involved in sexually explicit activity, and has kept operators of “teen” oriented adult Web sites on edge. A decision by the High Court is expected in early 2002.

As our nation becomes transfixed with the images of brutality from the hard line Taliban government in Afghanistan, we should pause and become thankful that we live in a free country. For example, our government cannot conduct secret court sessions to bring down government dissidents, detain criminal suspects without cause, conduct secret property searches without informing the property owner, allow investigators to review citizens’ Internet usage and email communications without probable cause, nor authorize secret search warrants to monitor communications of suspected anti-government operatives. Wait a minute! That’s exactly what the U.S. government can now do under the United and Strengthening America Act, signed into law on October 25, 2001. This legislation has been roundly criticized by the mainstream media as a needless evisceration of our civil liberties, and an overreaction to the terrorist strikes which threatens the American way of life. MSNBC calls the new law a “serious incursion into the set of civil liberties that makes this nation unique.”7 Many of the provisions contained in the anti-terrorism legislation can be used in regular criminal investigations that have nothing to do with terrorism. Of particular concern to the Adult Internet Industry is the new ease with which investigators would be able to obtain permission to review anyone’s email communications and Web site history. Once the terrorist threat subsides, adult webmasters may very well find themselves to be the unwitting victims of the current hysteria that allowed this unconstitutional legislation to sail through Congress. Of additional concern, from a free speech perspective, is the new expansive definition of “domestic terrorism” that could be used against protestors who might become too aggressive, but are clearly not terrorists.8 Congratulations must be given to the one courageous Senator Russell Feingold (D-Wisc.), who cast the sole vote against the legislation.9

For years now, adult webmasters have been struggling with the onerous penalties imposed by credit card companies for Internet chargebacks. Finally, one Web company has had enough and is doing something about it. On October 4, 2001, WebsiteBilling.com, Inc., a major online credit card processor, filed a multimillion lawsuit against Visa for unlawful and malicious conduct in connection with its chargeback penalties.10 The case was filed in the Southern District of Florida and seeks an excess of three million dollars in damages including an immediate reversal of the one million dollars in fines levied against the Plaintiff by Visa. The complaint also seeks an injunction preventing Visa from imposing additional unlawful fines and penalties. WebsiteBilling’s President, Richard Kwait, said, “Visa has an obligation to protect its e-commerce merchants with standards in the same way that retailers are protected. Countless U.S. businesses have been forced under because of Visa’s failure to protect them from consumer fraud, and all the while Visa lines its pockets with outrageous penalties assessed against merchants.11” The Adult Internet Industry anxiously awaits the outcome of this case, and hopes to benefit from any relief awarded by the federal court in Miami.

Another Web censorship law has been thrown out on free speech grounds. The State of Virginia passed a law attempting to protect children from “harmful” material on the Internet in April, 1999.12 The law was enjoined in August, 2000, pending a final ruling by the court. United States District Judge James H. Michael Jr. rendered that final ruling recently, holding that the attempt to restrict access of minors to indecent material on the Internet unconstitutionally burdens the rights of adults to receive protected speech.13 Virginia’s Attorney General announced plans to appeal the decision to the ultra-conservative Fourth Circuit Court of Appeals in Richmond, Virginia.14 Similar laws have been struck down on First Amendment grounds in New York, New Mexico and Michigan. Interestingly, the Judge recognized the possibility that advances in Internet technology may someday allow the government to restrict Internet content without violating Free Speech. “Technological advancements may, in the not too distant future, permit statutes similar to the one now before this Court to regulate constitutionally content on the Internet,” he said.15 That day may be coming soon given the upcoming argument before the United States Supreme Court in the Child Online Protection Act case on October 28, 2001. If the law is upheld, all American adult Internet content will be required to be placed behind a firewall, and secured from access by minors. If the High Court strikes the law down, all obscenity laws across the country may be consequently rendered unconstitutional.

Our firm is currently preparing for its own visit to the United States Supreme Court on December 4, 2001. The case involves the constitutionality of an adult entertainment regulation passed by the City of Los Angeles. John Weston, Esquire, is gearing up for his seventh United States Supreme Court argument on this case. The Court is expected to clarify the required predicate that the government must establish in order to support restrictive adult entertainment zoning regulations. This “secondary effects” analysis has been the subject of intensive litigation in the adult industry for decades. More on that case next month.

One final case worth mentioning: The Fourth District Court of Appeal in California recently determined that paying for a girl-girl sex show does not constitute “prostitution” under California law.16 The case arose from a performance at the “Flesh Club” where dancers performed sexual acts on each other in the VIP room for approximately nine minutes. The court determined that the crime of prostitution must involve sexual activity between the customer and the prostitute. Apparently, it is no longer a crime just to watch in California. This decision stands in sharp contrast to the way the Florida courts have ruled on the same issue. In State v. Conforti,17 a Florida Appellate Court upheld Florida’s prostitution law and called a similar girl-girl sex show, “somewhere on Mars,” referring to the “outer limits” of protection afforded to nude dancing under the First Amendment. As illustrated by these two diametrically opposed decisions; East is East, and West is West, and the twain shall never meet.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters runs the firm’s Florida office, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com or www.FreeSpeechLaw.com

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

Now is the time to rally around the Flag, but beware of collateral damage that may result from the war on terrorism. Most red-blooded Americans support President Bush’s decision to unleash “infinite justice” on the suspected terrorists. Our country has even gone so far as to place a $25 million dollar bounty on the head of Osama bin Laden. Our leaders have also taken some steps to protect national security by enhancing the ability of the government to detain foreigners for increasing amounts of time, and possibly deport aliens without a stated reason, which seems appropriate in the heat of the moment. However, Attorney General John Ashcroft has also asked for secret court authorization for wire taps, longer jail terms for terrorists, access to users’ Internet information without a court order and authority to review telephone voice messages with only a search warrant.1 The Administration also wants wiretap evidence obtained from other countries in violation of the Fourth Amendment to be admissible in court.2 These measures have caused Democrats and other civil liberties advocates to become “deeply troubled” by the constitutional implications. “Past experience has taught us that today’s weapon against terrorism may be tomorrow’s law against law-abiding Americans, says Representative John Conyers, D-MI.3

The President rejected the Taliban’s demands that we produce evidence linking bin Laden to the terrorist attacks, and yet intends to use military force to punish him and his associates for his crimes. Some experts on U.S. policy in the Middle East have opined that such military retribution will very likely only exacerbate the problem and elevate Osama bin Laden to the status of a martyr.4

The course the government has embarked on is a potentially dangerous road to travel from a constitutional perspective, and establishes a disconcerting precedent. While the terrorist attacks in September may seem to justify an exception to every rule, our willingness to approve summary execution of suspects without the presentation of evidence or any form of trial should, at the very minimum, raise our collective eyebrows. Such actions are usually reserved for totalitarian regimes, and fly in the face of our time-valued constitutional concepts, especially Due Process. While a quick, violent response may well be appropriate in this circumstance, one is forced to question whether any other circumstances justify the imposition of a summary execution without trial.

Years ago, we declared a war on drugs, accompanied by rhetoric not much different than that heard regarding the “war on terrorism” today. Assume a Columbian drug dealer mowed down fifty innocent people in Central Park during a drug deal gone bad using a submachine gun; would his actions also justify punishment without evidence or trial? What if nobody died, but ten were wounded? The treacherousness of this slippery slope becomes obvious when illustrated correctly. Those in the adult industry must remain ever vigilant and on guard against the erosion of civil rights regardless of the purported justification. If the rights to Due Process and a fair trial end up as “collateral damage” in the war on terrorism, we will end up with problems that pale in comparison to our current preoccupation with terrorists. Our government sets an example for the citizens of our country and, indeed, for the rest of the world. Our criminal justice system is seen as among the fairest on the planet. Making exceptions to the way we dispense justice, regardless of the level of the crime, is dangerous business. We must remain vigilant in the attempt to minimize any damage the First Amendment may suffer in the “war on terrorism,” in order to prevent the kind of erosion the Fourth Amendment suffered during in the war on drugs. Government officials have already tried to censor communications on the “Voice of America” because they are allegedly coming directly from bin Laden. Only in the defense of unpopular, even despicable speech, are the rights of all to Free Expression established and maintained.

The terrorist attacks on U.S. soil has, for the first time since the inception of the Internet, resulted in the term “sex” being knocked off the top ten most popular search engine terms.5 During times of war, people typically think less about sex and more about violence than during peacetime. We also tend to place a lower value on our civil liberties and a higher value on personal security, which gets us back to the concerns raised earlier: The Bill of Rights is likely to take a significant hit in the name of “fighting terrorism.”

This month did produce some good news; the Eleventh Circuit Court of Appeal reversed the decision of the trial court which had originally ordered the Voyeur Dorm to shut down.6 The Eleventh Circuit determined that Tampa improperly applied its Adult Entertainment Ordinance to the Voyeur Dorm, an online business. The Court pointed out that adult entertainment regulations are only justified if directed at adverse secondary effects of adult entertainment; not if they are directed at the entertainment itself. Voyeur Dorm did not cause the typical adverse secondary effects generally associated with adult businesses, such as increased crime and decreased property values, because the public did not set foot inside the Voyeur Dorm residence and no business was transacted at the physical location. All business occurred in “virtual space.”7 The court dodged the significant constitutional issues raised in the case, i.e., whether adult entertainment ordinances can constitutionally be applied to adult Internet businesses. Nevertheless, the adult Webmaster community has celebrated the victory.

For the first time in our history, a major American newspaper has created a “pornography beat.” The Los Angeles Times has finally accepted the existence of the erotica industry as a legitimate source of ongoing news.8 “We couldn’t ignore it anymore,” said Ralph Frammolino, a Times reporter. The adult industry is one of the bigger businesses in the San Fernando Valley area, claiming revenues of $10 billion dollars a year.9 The Times will not be attempting to bury this topic on the back page either. The stories will be given considerable space, often running more than 1,500 words, and will sometimes be prominently placed.10 Kat Sunlove, the Adult Industry’s Legislative Affairs Director noted: “Politically, we’re no longer a pariah.”11 Even the legislators California stand up and take notice when the adult industry speaks, according to Sunlove.

Our government’s gearing up to fight common enemies abroad has likely resulted in the settlement of a couple of cases against the Adult Internet Industry. Recently, the Federal Trade Commission (“FTC”) announced it settled charges against several adult Web site operators who used “dialer” programs to connect users to their erotica.12 Dialer programs became commonplace in the Adult Internet Industry as an alternative to credit card billing after it became increasingly difficult for webmasters to obtain merchant accounts with major credit card companies. These dialer programs disconnect customers from their regular Internet Service Provider and reroute the Internet connection to a provider in Madagascar, costing unwitting subscribers thousands of dollars in long distance fees. After many months of legal wrangling, the FTC settled the charges with Charlo Barbosa B.C., Ltd., Virtuallinks, Hillary Shaeinkin, Witch’s Web, Inc., Honey Bun, Inc. and Free Sugar, Inc. The FTC also settled fraud charges against RJB Telecom, Inc., of Scottsdale, Arizona, who were accused of illegally billing customers’ credit cards. According to Reuters, the company agreed to post a $250,000 bond and to undergo scrutiny to ensure that it does not continue the practice. Perhaps this is a time for putting aside our differences and focusing on the common enemies.

As the ACLU prepares to take on Attorney General John Ashcroft in the United States Supreme Court on the COPA case, sex education and Free Speech groups have filed Amici Curae (“Friend of the Court”) briefs with the High Court, arguing against the legislation. 13 As is widely known by now, the case involves a constitutional challenge to the Child Online Protection Act (COPA) passed by Congress in 1998. The law was struck down by the lower courts on the grounds that the concept of “local community standards” cannot be constitutionally applied to a global medium such as the Internet. Recently, the National Coalition Against Censorship and five other organizations filed briefs asking the Court to uphold the lower court rulings and invalidate the legislation, once and for all. In their briefs, groups such as the Society for Scientific Study of Sexuality, the Institute for The Study of Human Sexuality and the Sexual Health Network argued that there is no body of scientific evidence which establishes that reading or viewing sexual material harms minors. The groups also take issue with the government’s assertion that pornography does not promote a “normal sexual perspective.” The case will be argued on November 28, 2001.

Many webmasters aptly note the federal Government is currently distracted by the war on terrorism and therefore is unlikely to launch a major offensive against the Adult Internet Industry. It may very well be that recent events have caused the Justice Department to reevaluate its priorities. However, webmasters should remain cognizant of the fact that the last Bush administration sent many individuals to jail for their participation in the Adult Industry. With approval ratings hovering around 90%, the current administration can easily conclude that it can do no wrong. It is during just such a time that participants in this unpopular industry must remain on guard.

God bless America.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters runs the firm’s Florida office, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com or www.FreeSpeechLaw.com

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

You may be fed up with the anti-porn rhetoric here in the United States, but when the media releases reports that people are flogged in Iran for selling erotic CD’s,1 or webmasters are arrested for “suspicion of operating a pornographic Web site” in Hong Kong,2 it becomes readily apparent things could be much worse. Here, in the United States, the Adult Internet Industry thus far has flourished, despite some economic ups and downs.

While the days of easy money are long gone,3 the past Administration allowed this industry to become strong and forever embedded in the fabric of the World Wide Web. Sure, there will be some prosecutions on the federal level against adult Web sites in the coming years; possibly even many. But social conservatives and “morality police” will not succeed in accomplishing any significant change in sexual behavior of the people of the Western Hemisphere; nor will they succeed in driving underground what has become a powerful industry. Unlike Afghanistan, which recently banned the Internet entirely,4 Americans will never accept a wholesale prohibition on any form of protected speech. Not to mention that the Constitution forbids it.5

The last ten years of unprecedented growth in the Adult Media Industry resulted in irreversible acceptance of the fact that mainstream erotica is available in our motel rooms, our televisions, satellite systems, and computers. This phenomenon makes it more difficult for prosecutors to convince jurors their neighbors should not be allowed access erotica of choice. The current erotica saturation will make the selection of any particular work for prosecution to appear arbitrary and capricious. Why this movie? Why not that mpeg? Certainly any obscenity prosecution will have a chilling effect on the distribution of other similar materials, but given the vast amount of explicit content out there, the random selection of any particular work for prosecution borders on the absurd.

Assuredly, however, the same cannot be said for images involving minors. At every turn, the Government tries to mix the issues of obscenity and child pornography. The Division of the federal government that prosecutes obscenity cases is called the “Child Exploitation and Obscenity Unit” (a/k/a the “God Squad”). Recent reports indicate that this Unit is preparing to gear up after basically eight years of inactivity. Whenever law enforcement can wave the banner of “Protect the Children,” it will. That argument sells much better than “Restrict What Consenting Adults Can View,” which is why so many obscenity cases are prosecuted in conjunction with charges of child pornography. The chances of being charged with an adult obscenity offense skyrockets when the government can also argue the defendant exploits children. Many expect that also will be true with respect to Web sites that do not restrict acces by minors.

Attorney General John Ashcroft’s first offensive against Internet content ostensibly was a large-scale Texas child pornography prosecution nicknamed “Operation Avalanche.”6 Ashcroft grabbed headlines across the world, in an obvious attempt to link the concept of adult Web sites to child pornography with this case – which, by the way, was assembled and prosecuted for the most part during Janet Reno’s watch.

Since most Internet experts have concluded it will be futile to attempt arresting actual producers of child pornography in Indonesia and Russia,7 the U.S. Postal Inspection Service decided to go after subscribers to the Web sites. Now there’s an interesting use of tax dollars! It was conclusively established that pedophilia is an incurable disease, often caused by a sexually abusive childhood. Putting 100 people in federal prison for viewing illegal images on their computers may garner a day’s headlines but it does nothing about the root of the problem of production that actually victimizes the children.

Adult webmasters can take these arguments away from the government, however. Unfortunately, the Internet is currently replete with images of child pornography on foreign Web sites, newsgroups and many voyeur sites. Any responsible webmaster should take a strong and definite stance against child pornography, using minors in any type of explicit imagery or allowing minors access to it. That includes monitoring the content of any sites which one is affiliated with, linked to, or promoting. Do not loose sight of the fact the Texas bust of Landslide Productions, Inc., involved only links to child pornography. The convicted webmasters had no content on their site.

Currently, a debate is emerging whether nudist sites and “Youth and Beauty” glamour sites featuring teenagers or children constitute child pornography as that term is defined under state and federal law. While there is some legal support for the position that the First Amendment protects the dissemination of nude or semi-nude images involving minors,8 this issue has not been conclusively decided. Such material raises unique legal concerns. However, webmasters all can agree that any images involving erotic depiction of children should be avoided and condemned. Without reliance on the issue of protecting children the Government is left with nothing but “restricting adult access to erotica” as a battle cry in any obscenity prosecution. Hardly a consensus builder!

Jurors will be less swayed by the Government’s arguments if minors are entirely taken out of the mix. We live in an age of tolerance, not judgment. The “live and let live” philosophy has taken hold in both urban and rural areas of our country. Life is too short to spend time in a courtroom judging what your neighbor watches in the bedroom. More importantly, given the current availability of explicit imagery jurors may be viewing the same materials.

The U.S. Supreme Court is about to decide an important case that will determine the definition of child pornography under federal law.9 It may turn out that webmasters will face prosecution for using young looking models, regardless whether all models were over the age of eighteen when photographed. While such restrictions appear to push the limits of constitutional regulation in a free society, webmasters should make a concerted effort to level the playing field by drawing a bright-line distinction between adult erotica and deplorable child pornography and by restricting adult Web sites to adults. Failure to do so will only empower your enemies and support their effort to blur the line between protected speech and illegal materials.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters runs the firm’s Florida office, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com or www.FreeSpeechLaw.com

CROSS-EXAMINING YOUR COUNSEL

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

It’s time to take the plunge! You are ready to take the advice of all the resource sites, chat rooms and articles you’ve read and hire an attorney. You know that your record-keeping compliance needs to be tightened up, and you have always been a little nervous about that fetish gallery, anyway. So now what do you do? Open the yellow pages? Call the local Bar Association?

This article will examine what qualifies an attorney to represent an adult Web site, and what questions you should ask potential counsel. It is intended for those webmasters seeking counsel for the first time, or those who want to make sure their existing counsel is the right choice. This was a topic of much interest and discussion at the recent Internext convention, and will hopefully be useful to newbies and veterans alike.

It has been said that this is a good time to know a great lawyer. But what makes a lawyer great? If you have heart disease, you don’t go to your family practitioner. You look for the best heart surgeon in the country, right? It’s the same with lawyers. We’re all specialists these days, or should be. The days of the general practitioner are long gone, in accounting, medicine and law. All lawyers have their niche. So what kind of lawyer is best for adult website representation?

Obviously you need an attorney with experience, but the Internet has not been around that long, so no lawyer has much Adult Internet Law experience. The partners of Weston, Garrou & DeWitt, the author included, have been representing adult webmasters since there was such a thing, but the practice area is less than a decade old. So while you may not find a lawyer with much Adult Internet Law experience, you should at least eliminate potential candidates who do not have significant experience in the Adult Entertainment Industry, in general. The Industry, of which you are a part, has been around since the 1950’s, when people were thrown in jail for selling Playboy. Many of the lessons learned from the battles involving other types of adult media are extremely useful in representing adult webmasters. For example, the video distributors of the 1980’s, during the Regan-Bush Era, fought many of the same types of battles that the Internet industry will face in the George W. Era.

It is essential that your attorney have experience representing adult industry clients, for several reasons. First, adult clients are different. They are treated differently by judges and juries, and can be some of the toughest clients to represent. Legal arguments that will be readily accepted by the courts when advanced by “mainstream” litigants often will be summarily rejected when the client is involved in the adult industry. Your lawyer should be accustomed to that treatment, and react accordingly. Adult Entertainment Industry lawyers must always be more prepared than attorneys in other practice areas because their clients are held in low esteem by the conservative judicial system.

Accordingly, you should not be your attorney’s first Adult Industry client. We’ve seen it time and time again: The client who comes to us at the last minute because the silk stocking law firm that represented the adult business during its formation stages is ducking for cover when the media is pounding down the door on some high-profile case involving their favorite topic; sex. “Our other clients wouldn’t understand,” they say. Your lawyer should be prepared to defend you in the court of popular opinion when the going gets tough. If not, you should find one that will. You cannot afford to place yourself in a position where you may need to “switch horses” in the middle of a crisis. If your counsel decides to bail out under those circumstances, it may be too late for another attorney to take over and do an effective job. So ask your lawyer if he or she is in for the long haul.

Other important questions are:

1. How many adult industry clients have you represented?

2. How long have you been keeping up on the legal issues affecting adult webmasters?

3. Are any of your Adult Industry clients in jail?

4. Have any been forced out of business?

5. Will you be my media spokesman and do you have the media experience to do so?

6. Will you represent me on appeal if we loose?

Don’t be afraid to interview your attorney. Choosing a lawyer will be one of the most significant decisions you make during the operation of your business. Oftentimes, clients are intimidated when it comes to challenging an attorney’s experience and qualifications. This is not a time to be bashful.

The next issue to explore with your attorney is his or her familiarity with the Internet. There are two types of people these days: Those who have adopted the web lifestyle, and those who have not. Does your lawyer have a web site? Does he know what a cgi script is? A TGP, or metatags? You do not want to pay for him to learn! This is not a field for attorneys who dabble. The bottom line is that you want an attorney who is “connected” but not in the sense that “connected” was used 50 years ago.

It is a well-publicized fact that most lawyers experience job dissatisfaction. Many are looking to switch practice areas to something that is perceived to be more exciting or cutting edge. While there will always be room in this industry for talented, dedicated attorneys who are willing to fight for the First Amendment, be careful of the lawyer who is shopping around for the next distraction.

You should also question your attorney regarding the depth of his or her knowledge about the common legal issues affecting the adult Internet industry. These issues, like the Internet itself, are constantly evolving, and your attorney must stay abreast of the changes in caselaw and legislation affecting your business, on a daily basis.

Some of these important legal issues are:

1. Obscenity: Possibly the greatest concern for webmasters, and biggest threat to the Industry. Your attorney should have actual experience in this practice area.

2. Records Keeping and Labeling Act (18 U.S.C. 2257): The most common mistakes adult webmasters make are in this category. The details can be tricky, so make sure your lawyer is up on this federal law and the implementing regulations.

3. Child Pornography: Everybody abhors actual child pornography, but compliance with the federal “virtual child pornography” law can be more elusive. This Act can be violated even if all your models are over 18. If you get it wrong, the penalties are the same as actual child pornography.

4. Unfair Trade Practices: Adult webmasters have been prosecuted by the Federal Trade Commission for “unfair” business practices. A California court recently handed down a ruling paving the way for unfair trade practice actions by private attorneys. This category is expected to grow in importance.

5. Copyrights & Trademarks: Protecting your site from intellectual property theft will be one of your lawyer’s primary responsibilities. You also will want to be sure that you are not infringing others’ intellectual property.

6. Harmful material and COPA: Keeping minors from accessing images of sexual activity on your site may be the difference between an obscenity prosecution and a successful business. The law in this area is in a state of flux, and should be closely monitored by your attorney.

Potential clients often call for a referral to an attorney in their home city or state. While this is a natural inquiry, such geographical qualifications are less relevant in the Digital Age. Initially, communication has become such that attorneys are instantly able to community with clients across the globe. Weston, Garrou & DeWitt’s Florida and California offices might as well be located down the hall from each other, given the amount of communication that occurs between the offices on a daily basis. Another important fact to remember is that most of the issues that are likely to affect a Web site operation are federal in nature. This means that the law will be uniform across the country, with the exception of some possible differing interpretations by the local federal courts. We all share the same First Amendment, and other constitutional protections, so lawyers who have familiarity with these issues can competently advise clients across the country. When local issues do arise, your adult Web site attorney will engage local counsel to advise on any such issues. Accordingly, you should not exclude any attorney simply on the basis of office location.

Operating without competent counsel is simply an unacceptable risk these days. The days of the Wild Wild West are gone, and our Industry is under a microscope by both the federal government and numerous “morality” groups. The large adult video companies that survived the war on pornography during the ‘80s, have consistently budgeted a significant percentage of their profits for legal representation. While it may have been possible to survive without engaging legal counsel during the infancy of the Internet, the Industry has matured and will be held responsible for its actions. Get the most out of your legal budget by identifying the proper specialist for your business.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters runs the firm’s Florida office, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at Larry@LawrenceWalters.com or www.FreeSpeechLaw.com.