***Update***
Defense counsel for Backpage.com execs filed a motion to dismiss the charges in this case arguing the prosecution was barred by the federal Communications Decency Act. Section 230 of the act prohibits website operators from being held liable for content posted by third parties.
The motion was set before Sacramento County Superior Court Judge Michael Bowman. In his tentative ruling, Judge Bowman agreed with the defense. Maggy Krell, an attorney with the California Attorney General’s Office, argued the criminal case sought to hold the Backpage.com execs liable for their conduct – not for other people’s speech.
Regardless of how Judge Bowman rules the issues is expected to go up on appeal.
One doesn’t normally think of pimping charges conflicting with the First Amendment when thinking about white collar crime. However pimping charges, a violation of Penal Code section 266h, are among the charges currently being faced by Backpage.com CEO Carl Ferrer. Also named as co-defendants are two controlling shareholders in the company – Michael Lacey and James Larkin. (We’ll get to the First Amendment conflict in a minute.)
Backpage.com describes itself as an internet classified ad giant where you can find anything from cars to contractors. And, the website is highly profitable. From January 2013 to March 2015, Backpage.com reported its income in California was $2.5 million per month, made by collecting fees from users who post ads.
The problem, according to California law enforcement officials, is that the company was collecting fees from users selling sex and posting nearly nude photos as part of their advertisements. The California Attorney General’s office has been investigating Backpage.com for three years. Its investigation was allegedly prompted by reports from the National Center for Missing and Exploited Children [NCMEC] which notified law enforcement of 2,900 cases of suspected child sex trafficking tied to the site.
California’s anti-pimping statute essentially criminalizes making money from prostitution. So what’s Ferrer’s defense? The First Amendment. More specifically it’s the Communications Decency Act of 1996. The Communications Decency Act shields the operators of websites from liability when information has been posted by a third-party. This act has been used to defend against numerous defamation suits, based on the legal theory that if providers of services were liable for third-party actions, free speech and e-commerce could be hindered.
The Communications Decency Act has an exception for criminal conduct; basically, the act says the protections can’t be used to defend against criminal conduct. However, there may be an exception to the exception.
In 2012, Washington state passed a new law, SB 6251. The purpose of this law was to criminalize the advertising of commercial sexual abuse of a minor. Washington law makers were open about the fact that the law was intended to shut down a portion of Backpage.com’s business. Before the law went into effect, Backpage.com sought an injunction against it, arguing the law infringed on their First Amendment rights. Backpage.com won. Why?
Washington’s SB 6521 criminalized the advertising of commercial sexual abuse of minors. The important word in that last sentence is “advertising.” Advertising is “speech.” The government can’t criminalize speech, as doing so violates the First Amendment. And while there are some exceptions – times when speech can be criminalized, such as yelling “Fire!” in a movie theatre solely to cause a panic – the Communications Decency Act, and the congressional intent behind it, supported a finding that Washington’s law was unconstitutional.
The basic argument goes something like this:
- com is a forum.
- com does not encourage any specific kind of speech.
- com is not designed to require users to input illegal content.
- com has policies against speech that is illegal or that encourage illegal activity.
- com has a process by which users can report illegal content and, when reported, such content is taken down.
If Backpage.com were criminally, or civilly, liable for the speech of its users, that would ultimately have a chilling effect on speech.
Things are a bit different in California. California Penal Code 266h doesn’t criminalize speech. It criminalizes receiving money from the proceeds of prostitution. That could spell trouble for Backpage’s .com executives. However there is another portion of the statute that may rescue them. California’s pimping statute requires the person receiving the money know the person who earned the money was a prostitute. Again, the key is that the statute requires actual knowledge. As an example, take a 2001 case in San Bernadino county where two managers of a local strip club were prosecuted based on allegations of pimping. A dancer who worked at the club offered a sex act, for money, to an undercover police officer. The sex act would have occurred in a private room on the premises of the strip club, and the dancer informed the officer that some of the money paid for act would have gone to the “house.” The court held, among other things, that since there was no proof the managers knew the dancers were engaging in acts of prostitution, they could not be held liable. In other words, the law requires actual knowledge. It seems the same rationale should apply to Ferrer.
Ferrer can argue that he didn’t know the people placing ads on his website were engaging in prostitution – in fact they were often advertising escort services. Escort services are something many people equate with prostitution but, are in-and-of-themselves not illegal. This argument is becomes more difficult when applying it to the charges involving pimping of minors…but if the minors on Backpage.com lied about their age, the burden is on the prosecution to prove Ferrer had knowledge of this aspect, a hefty burden based on the facts as currently known.
When Ferrer was arrested his office was also raided. Apparently, the raid was in connection with an unrelated money laundering probe. So, it seems Backpage.com and Mr. Ferrer may be facing more legal troubles in the near future.
Original Publish Date 10/31/16
Updated 12/14/16
