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Legal Beat: October, 2005

Legal Beat: October, 2005

October 13, 2005
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" message senders cannot rely on 'opt-ins' or any other affirmative act of a minor "

On Aug. 2 at U.S. District Court in Denver, Judge Walker D. Miller heard oral arguments regarding plaintiff's motion for a preliminary injunction in the case of Free Speech Coalition vs. Gonzales. The lawsuit seeks to restrain government enforcement of the "2257 regulations" set forth at 18 U.S.C. § 2257 and 28 CFR 75 and then to have the entire regulatory scheme declared unconstitutional.

As the FSC legal team prepared for the hearing, we knew that we were going to bat in Denver not only for the FSC and its members but also for the entire adult entertainment industry. At stake was nothing less than the livelihoods, privacy and personal safety of tens of thousands of adult entrepreneurs and performers. It was a responsibility that all the attorneys on the team knew well. But we also all felt, and continue to feel, honored and privileged to take up the gauntlet thrown down by the government.

By all accounts, the hearing went well, perhaps even better than we expected. I am fairly optimistic that the court will at least enjoin the regulations' "secondary producer" requirements by appropriately applying the holding in Sundance Associates vs. Reno, a higher federal court case that invalidated 2257's secondary producer requirements. I also am hopeful that the judge will favorably respond to our many arguments that clearly demonstrated that the regulations are unconstitutionally burdensome and, in many instances, impose impossible requirements.

For example, I think we convincingly argued that it would be impossible in many instances to comply with 2257's requirement of including in the producer's records all the URLs associated with every subject depiction. At the hearing we argued that even the government's own witness, renowned computer security expert Howard Schmidt, acknowledged the practical impossibility of including all the URLs associated with even a single widely distributed depiction on the web without the use of a costly web spider or bot. Moreover, Schmidt acknowledged in his deposition that even expensive bots could not acquire all the URLs because some would be in password-protected areas. He also acknowledged "session generated" URLs could not effectively be included in the records.

I also am hopeful that the judge will agree with our view that the 2257 regulations impose disproportionately crushing economic burdens on small adult entrepreneurs. While reminding the judge that "free speech has never been a rich man's privilege or right," FSC attorney Paul Cambria launched into an example we had prepared to demonstrate just how burdensome 2257's requirement of inclusion of a separate copy of each depiction in the records would be for a solo webcam business. Again using testimony provided by the government's own witness, Cambria explained that a single webcam performer working 40 hours per week using a single camera would require 120 gigabytes, or the equivalent of 1,501.5 average personal computer's worth of storage space (80GB) over seven years!

Cambria also informed the judge that the government's witness also had testified that depictions appearing on computer screens at the consumers' end of webcam shows would constitute different depictions than the performer's monitor image under the regulations, and all such remote depictions would somehow also have to be included in the 2257 record-keeping system — another virtually impossible task.

In sum, I believe we can be hopefully optimistic that Miller will conclude that enforcement of many, if not all the regulations should be enjoined. But unfortunately it is not yet time to celebrate, particularly because there is now another new threat to the industry and to free speech: the Michigan and Utah "child protection registry" laws.

A New Threat
While the industry battled the federal government over the 2257 regulations, Michigan and Utah opened two brand-new porn war fronts. On July 1, in the shadow of 2257 mania, two new and very troubling laws directly affecting large segments of the adult entertainment business quietly went into effect. If you use email to market your site, or if you advertise or distribute mobile content, you are already in the crosshairs of these new regulations and should seek the assistance of competent counsel now.

The Michigan law, is known as the Michigan Children's Protection Registry Act (MCPRA). Its Utah counterpart is titled the Child Protection Registry (CPR). In many respects, the laws are quite similar. Both laws prohibit sending certain types of advertisements by email, mobile telephones, text messaging, facsimiles and other methods to registered "contact points."

Specifically, the MCPRA states that "a person shall not send, cause to be sent, or conspire with a third party to send a message to a contact point that has been registered for more than 30 calendar days if the primary purpose of the message is to, directly or indirectly, advertise or otherwise link to a message that advertises a product or service that a minor is prohibited by law from purchasing, viewing, possessing, participating in, or otherwise receiving."

Similarly, the CPR prohibits the sending of a "communication to a contact point or domain that has been registered for more than 30 calendar days ... if the communication: (a) advertises a product or service that a minor is prohibited by law from purchasing; or (b) contains or advertises material that is harmful to minors, as defined in Section 76-10-1201 [sexually oriented materials]."

The Law's Message
Both laws focus on messages pertaining to an incredibly broad spectrum of prohibited products and services under state and federal law, including alcohol, gambling, lotteries, drugs, firearms, and of course, sexually oriented materials. Both laws apply to messages that advertise, contain, or in the case of MCPRA, just link to any material that would be considered illegal or harmful to minors. Consequently, because so much material can be deemed to be "harmful matter to minors," the regulations apply to almost all sexually oriented materials.

Under the MCPRA, a "contact point" is defined as an instant message identity; a wireless telephone, PDA, pager number or similar wireless device; a facsimile number; an electronic mail address; and any other electronic addresses set forth in regulations promulgated by the Michigan Department of Labor and Economic Growth.

Under the CPR, a "contact point" is "an electronic identification to which a communication may be sent." This includes all the types of contact points listed in MCPRA, plus non-wireless telephones and contact points subsequently defined by Utah's Division of Consumer Protection. Other common features of MCPRA and CPR:

• Criminal penalties. A violation of the Michigan law is a crime subject to penalties of up to a year imprisonment and/or a fine of up to $10,000, with greater penalties for subsequent offenses. The law also provides for the forfeiture of "all computer equipment, all computer software and all personal property used in connection with any violation of [the] act." A violation of the CPR constitutes a "computer crime" under Utah law and is a class B misdemeanor for the first offense and a class A misdemeanor for subsequent offenses.

• No "Consent" defense. The MCPRA provides that "[t]he consent of a minor or third party to receive the message is not a defense to a violation of this section." MCL § 752.1065. Similarly, the CPR states "[t]he consent of a minor is not a defense to a violation of this section." Therefore, message senders cannot rely on "opt-ins" or any other affirmative act of a minor, or, in the case of the MCPRA, any recipient, to provide them with insulation from liability.

• Civil lawsuits by private and governmental parties. The MCPRA allows civil suits to be initiated by: (1) the guardian of a minor who receives a prohibited message; (2) "a person through whose facilities the message was transmitted"; or (3) the attorney general. A plaintiff also may recover attorney fees and costs. The CPR has similar civil lawsuit provisions.

• Civil penalties. The civil penalties for violation of the laws are substantial. Violation of the MCPRA subjects the violator to a penalty of $5,000 per message, up to $250,000 per day. Violations of the CPR enforced by private parties can cost you $1,000 per message without any maximum. Administrative enforcement can result in fines of $2,500 per message unless the violation is intentional, in which case the fine is $5,000 per message.

• Personal and institutional contact point registries. Both laws create state registries containing individual contact points belonging to or controlled by minors, and entire e-mail domains belonging to schools and other organizations providing services to minors.

• Fees to access the registries. Under MCPRA, the fee for accessing the registry is $0.007 per contact point. Under the Utah Division of Consumer Protection's proposed rule regarding the CPR, message senders would pay a fee of $0.005 per contact point checked. For both registries the amount charged to the message sender is based on the number of registered contact points on the sender's list, not the number of contact points contained in the registry.

Gregory A. Piccionelli, Esq. is a senior member of Piccionelli & Sarno, one of the world's most experienced law firms specializing in Internet and adult entertainment matters. He can be reached at (310) 553-3375.


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