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Corpus Juris: Checking Their Rep

Corpus Juris: Checking Their Rep

November 18, 2013
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" Before engaging any attorney, adult businesses must be careful to investigate the reputation of the attorney and be certain that the prospective attorney understands not only the legal issues that might arise in the current dispute, but also the long term effect any decision to litigate may have on the business itself and the adult industry as a whole. "

Through most of its history, the adult entertainment industry was reluctant to seek the aid of the judicial system to resolve business disputes. There were exceptions. Playboy, with its air of pseudo-respectability, routinely litigated cases to protect its valuable trademarks, including its bunny logo. When Jerry Falwell won on an intentional infliction of emotional distress claim against Larry Flynt and Hustler magazine in district court, Larry Flynt returned fire appealing the ruling all the way to a successful conclusion at the U.S. Supreme Court in a landmark decision.

Some businesses had no choice but to litigate. When local governments withheld business licenses or attempted to shut down cabarets, adult bookstores, and gentleman’s clubs through improper zoning laws, these businesses had no choice but to fight city hall in the courts. They just hired a good lawyer and headed to court hoping for the best.

In a few cases, the industry challenged the constitutionality of federal laws such as the Child Online Protection Act (COPA) or the 2006 enhancements to 18 U.S.C. § 2257. Plaintiffs representing the industry proceeded to court knowing they were likely to receive an icy reception. Similar to licensing and zoning issues for brick-and-mortar businesses, these laws were existential to the adult entertainment production industry. Litigation was therefore essential — not optional.

Other then these exceptions, prior to 2000 if an adult businesses was in court it was usually as a defendant — many of them victims of obscenity prosecutions under anti-porn crusader Edwin Meese. Society and the courts generally viewed adult businesses as both immoral and criminal. Judges made it clear they had no interest in promoting access to the courts for pornographers.

In 1993, when Charles Peyton, aka Jeff Stryker, sued Doc Johnson for using his photograph to sell the Jeff Stryker Dildo, the superior court judge who proceeded over the matter reportedly said, “I wonder if this case is beneath the dignity of the court, “ and asked the lawyers, “is this what you really went to law school for.”

In 1998, an Orlando club sought to enforce a non-compete agreement against a dancer. Although such non-compete clauses are fully enforceable in Florida, the state judge said, “I’m not going to tell some go-go dancer where she can dance, no matter what she signed. Injunction denied.” Clearly the club would have prevailed but for the nature of the business.

Also in 1998, a federal judge in New York refused to issue a preliminary injunction in a copyright infringement case solely because the infringed work was an adult movie. The court issued its ruling even though earlier cases had clearly established that adult movies are copyrightable.

During this era, it is not surprising that adult content producers were reluctant to seek judicial solutions to business disputes.

However, by 2000, obscenity prosecutions had waned. The Internet was growing at an astounding speed, requiring the adult industry to collaborate with businesses outside the industry. Questions arose concerning the application of existing intellectual property laws to the Internet.

The industry could no longer forego the relief that can sometimes only be obtained through litigation. Increasingly, companies turned to the courts to resolve business disputes. Fortunately, the attitude of the courts seemed to be shifting. Perhaps, this change was simply a manifestation of changing societal norms.

In 2004, Titan Media sued Larry Flynt Productions when a low-level employee created a gay membership website that included unlicensed Titan Media photographs. The federal magistrate who conducted the settlement conference displayed no bias concerning the content. In fact, she asked the parties to allow her law clerks to sit in on the settlement conference since the nature of the dispute had piqued interest among her staff. Since then, Titan Media has litigated dozens of cases in federal and state courts. With a few exceptions, judges and magistrates have not appeared to be concerned about the nature of Titan Media’s business or the content it produces.

In the 2000s, Al Gelbard litigated more than a dozen civil cases in state and federal courts representing adult companies of various natures. Gelbard says that, “with the exception of one federal judge I had no problem with any court prejudice against me or my clients as a result of the nature of their businesses. In fact, in one case, opposing counsel argued that my client (a tape duplication lab) should not be able to obtain court assistance because the dispute involved pornography. The judge stated he didn’t care what was on the videotapes; the defendant hadn’t paid for the services he ordered.”

Around 2000, adult industry lawyer Vinnie Verdiramo represented a client in a contract dispute involving adult bookstore video viewing booths. The judge instructed the jury that they should not consider the nature of the product, because the issue was limited to the breach of the contract. Clearly deflecting the jurors away from the potentially prejudicial nature of the content, the judge compared the video booth defects to a broken refrigerator that resulted in melted ice cream!

Another litigator who has handled licensing disputes for adult novelty companies and labor disputes for gentlemen’s clubs reports that courts rarely demonstrate any interest in the nature of those businesses. He believes the courts just want to know how the law applies to the facts and whether the plaintiffs are entitled to the relief they seek.

Although these stories are somewhat antidotal, they seem to suggest that around the turn of the century judicial prejudice against the adult entertainment industry at least started to subside.

Unfortunately, that is not the end of the story. Around 2010, a small number of attorneys adopted the Recording Industry Association of America (RIAA)’s ill-fated litigation model of suing individuals who had infringed songs using peer-to-peer technologies such as e-donkey or bit-torrent. Although many believe the RIAA abandoned its litigation strategy in the face of a well-orchestrated public relations campaign by propiracy organizations, the RIAA just as likely abandoned its litigation plans in response to a series of court rulings criticizing the practice of joining multiple defendants in a single case. Judges had also expressed concerns about suing individuals as John Does in jurisdictions that ultimately might be thousands of miles away from where the infringer actually resided.

Certainly, content producers have a legitimate interest in protecting the value of their movies and have every right to sue infringers in order to recover damages and to deter future infringers. The RIAA model could have been improved upon and successfully implemented. However, rather than analyze the deficiencies of the RIAA litigation model and test adaptations through a series of test cases, a handful of lawyers who had never before represented the adult entertainment industry doubled down on the RIAA strategy. Where the RIAA typically joined about fifty defendants in one lawsuit, these cowboy lawyers included thousands of defendants. In one case, attorney Kenneth J. Ford joined 9,729 John Doe defendants. The attorneys also failed to address judicial concerns about jurisdiction. If they received a negative ruling in one jurisdiction, instead of adjusting their strategy or appealing the negative ruling, they simply filed a new round of identically flawed complaints in other jurisdictions. The result has been a disaster for the industry and has only emboldened peer-to-peer infringers.

Perhaps these lawyers believed that federal judges do not communicate with each other or pay attention to what occurs in neighboring jurisdictions, but they do. One judge wrote that “[d]istrict judges have begun recognizing [attorney] Steele’s representation of these companies against multiple Doe Defendants, named without sufficient evidence as to their involvement, as ‘effort[s] to shoot first and identify his targets later.’” As a result, these attorneys managed to spawn a plethora of court opinions critical of the adult entertainment industry and the lawyers representing it.

Not only have these non-industry attorneys made poor strategy decisions, several of them have engaged in unethical practices to the extent that federal courts financially sanctioned them. When several veteran industry attorneys, myself included, attempted to advise attorney Evan Stone of the problems with his approach to bit-torrent litigation, he recoiled and spat back that we were simply afraid of losing clients to him. Within months, a federal judge sanctioned Stone $10,000 for issuing unauthorized subpoenas in a multi-defendant, bit-torrent case. The court later ordered him to pay $22,000 in attorney’s fees and found him in contempt for failing to pay the sanctions.

Industry attorneys publically chastised attorney John Steele when he bragged about leveraging higher settlement amounts if infringed content contained fetish material. Earlier this year, U.S. District Judge Otis Wright ordered Steele to pay a John Doe defendant $40,000 in attorneys fees and sanctioned him an additional $40,000 which he said was “justified by Plaintiffs’ brazen misconduct and relentless fraud.”

The mood of the federal judiciary is reflected in the preamble to Wright’s order in which he wrote,”[p]laintiffs have outmaneuvered the legal system. They’ve discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle — for a sum calculated to be just below the cost of a bare-bones defense. For these individuals, resistance is futile; most reluctantly pay rather than have their names associated with illegally downloading porn. So now, copyright laws originally designed to compensate starving artists allow, starving attorneys in this electronic-media era to plunder the citizenry.”

Unfortunately, the judges who have presided over these cases likely believe this type of behavior is typical of adult entertainment lawyers. This is completely contrary to my experience. I have found that lawyers who represent adult entertainment clients are exceedingly cautions when it comes to complying with standards of professional responsibility. They understand they will be highly scrutinized and therefore their integrity must be beyond reproach. Unfortunately, many judges’ impressions of the adult industry have now been shaped (or re-shaped) by attorneys like Steele, Ford, and Stone, who really have nothing to do with the adult entertainment industry and know little about it.

After decades of trying to establish an equal footing in the courts for adult entertainment businesses, a handful of attorneys, motivated only by personal greed, may have reconstituted judicial mistrust of the industry. They have almost certainly reduced the likelihood that adult entertainment litigants will get a fair shake when they turn to the courts to resolve legitimate business disputes.

Before engaging any attorney, adult businesses must be careful to investigate the reputation of the attorney and be certain that the prospective attorney understands not only the legal issues that might arise in the current dispute, but also the long term effect any decision to litigate may have on the business itself and the adult industry as a whole.

D. Gill Sperlein is a San Francisco-based attorney who represents many adult entertainment industry clients.


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