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The New Assault: 2

The New Assault: 2

January 28, 2006
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" the adult entertainment industry may only be at the beginning of a long siege "

In part one we looked at Utah's and Michigan's new statutes, their criminal and civil penalties and beyond. In this conclusion, we'll examine personal and institutional contact point registries, their associated fees and more.

Personal and Institutional Contact Point Registries
Both laws create state registries containing individual contact points belonging to or controlled by minors, and entire email domains belonging to schools and other organizations providing services to minors.

Fees to Access the Registries
There appears to be only one affirmative defense to prosecution under either of the laws. Essentially it requires that a sender of a message subject to the regulations first transmit the sender's recipient email list or other electronic address list to a state-selected private party for scrubbing against the state's secret registry list. But here is perhaps the most outrageous and audaciously unconstitutional part of these laws. Under the Utah Division of Consumer Protection's rule regarding the CPR, message senders are required pay a fee of $0.005 per contact point checked.

Similarly, at the time of this writing, MCPRA requires a $0.007 per contact point fee. 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. Moreover, such scrubbing and repayment of the registry access fees will have to be repeated every thirty days to maintain currency with the monthly updated registries. If the matter wasn't so serious, one could find humor in the fact that Utah and Michigan have found a way to soak the adult online industry through a recurring billing scheme.

I wish I could report to you that only Utah and Michigan have taken leave of their collective senses to enact what is little more than a thinly veiled email tax and back-door attempt to regulate adult products disfavored by religious extremists, but I can't. Believe it or not, similar legislation is currently pending in Illinois, the land of Lincoln. Even more disconcerting is the fact that several other states are considering similar measures. All this adds up to the real possibility that, if not stopped, laws like the CPR and MCPRA could become common all over the country. As a result, senders of electronic communications might soon be forced to pay the equivalent of mafia "protection money" to several, potentially even scores, of states to scrub their lists or risk lengthy incarceration and crushing civil liability.

On Nov. 17, 2005, the FSC filed a federal lawsuit in Salt Lake City challenging Utah's CPR. The suit was filed exactly five months, to the day, after the FSC filed its lawsuit to invalidate another outrageous attack on the industry, the implementation of the revised federal record keeping and labeling regulations (18 U.S.C. § 2257 and 28 CFR 75). The CPR action was filed on behalf of the FSC by the Rothken Law Firm, Piccionelli & Sarno and local counsel Jerome Mooney. As with the 2257 challenge, Jeffrey Douglas, Reed Lee, Brad Shaffer and a large number of other prominent industry attorneys are involved in the case. It appears that FSC President Michelle Freridge has once again assembled another legal dream team to do battle on behalf of the industry. Also, like the 2257 challenge, all the attorneys are offering their services at discounted rates or pro bono.

The FSC lawsuit seeks to invalidate the CPR and prevent its enforcement against the FSC and its members on constitutional grounds. In our complaint, we allege that the law is invalid because it is an unlawful prior restraint on expressive activities of the FSC, its members, and other e-marketers, it prohibits truthful and non-misleading commercial speech, and it is vague and over-broad all in violation of the First and Fourteenth Amendments of the U.S. Constitution and the free speech provisions of the Utah Constitution. We also allege that the CPR, a Utah state law, is invalid because it is preempted by the Can-Spam Act, a superior federal law, and that the Utah regulation violates the Commerce Clause of the U.S. Constitution by impermissibly regulating protected speech of the FSC and its members outside the borders of Utah. Additionally, our lawsuit claims that the CPR subjects the FSC, its members, and other e-marketers to inconsistent email regulations among the various states, and unreasonably increases the costs of conducting interstate commerce.

As I have said in several of my legal columns, at industry functions and to every one of my adult entertainment clients, if you are in the adult entertainment business and you are not yet a member of the FSC, you are doing yourself and the industry a real disservice. Once again, the FSC is shown to be the only industry organization capable of mounting an effective challenge to the formidable forces arrayed against the adult entertainment business. As such, it is in the vital interest of everyone in the adult entertainment industry, at every level, to support the efforts of the FSC.

Like the U.S. military, the FSC is being called upon to fight many battles on many fronts on behalf of the industry. For example, the industry will soon need to challenge the enforcement of MCPRA for all the reasons we are challenging Utah's CPR. Moreover, if the Illinois child registry law also becomes law, it too will need to be confronted. In addition, the FSC will continue to fight hard in what is likely to be a long 2257 litigation battle with the federal government.

But unfortunately, my friends, the adult entertainment industry may only be at the beginning of a long siege that will likely last at least through the end of the current administration.

The FSC litigation team sincerely believes that the CPR and the MCPRA are unconstitutional and should be struck down with a swift judicial blow. However, until they are, you are responsible for complying with the laws. Consequently, we urge you to seek the advice of competent counsel in these and all other important legal matters.

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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