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Legal Update: June, 2004: 1

Legal Update: June, 2004: 1

June 28, 2004
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" Attorney General John Ashcroft weighed in on the issue of age records inspections as required by Title 18 U.S.C. § 2257. On June 14, 2004, he proposed tougher regulations that would narrow the list of acceptable forms of identification, and eliminate such options as college I.D.’s and selective service cards. The forms of I.D. would also have to be accessible to government agencies to verify their legitimacy.  "

In the first installment of this month's Adult Industry Update, noted first amendment attorney Larry Walters takes a look at news from the Department of Justice, the regulation of content production in California, the latest obscenity prosecutions, and other important issues facing adult Webmasters today...

Ashcroft Weighs In On 2257 Inspections
Attorney General John Ashcroft weighed in on the issue of age records inspections as required by Title 18 U.S.C. § 2257. On June 14, 2004, he proposed tougher regulations that would narrow the list of acceptable forms of identification, and eliminate such options as college I.D.’s and selective service cards. The forms of I.D. would also have to be accessible to government agencies to verify their legitimacy. The new guidelines will take effect after the public has an opportunity to comment. In the course of presenting this proposal, the Justice Department conceded that it has never conducted a records inspection in the adult industry during the entire time the law has been effective. While the adult industry lobbying groups are unlikely to oppose a call for tighter age verification regulations, Ashcroft’s attention to § 2257 issues is a likely sign that records inspections are coming. Adult webmasters are encouraged to redouble their efforts to comply with all requirements of federal law pertaining to age verification in light of this recent attention to the issue.

Regulation Of Content Production In California?
California Assemblyman Paul Koretz of the Assembly Labor Committee called a public hearing after a bill to create health and safety standards for the adult movie-making industry stalled in another committee Koretz belongs to. The purpose of the hearing was to gather information and to discuss health and safety issues within the adult entertainment industry, where his initial impression was to have the adult industry voluntarily adopt a “condom-only policy.” Many people testified at the hearing, which discussed: (1) whether the measures taken by the adult industry give adult actors sufficient safety and health protections, and (2) whether additional regulations would economically hurt the adult industry.

At the hearing, public health officials and adult performers, as well as other individuals within the adult industry, argued over whether mandatory condom use should be required during filming. While some adult industry leaders warned that mandatory condom use could drive adult production studios underground or out of state, other industry leaders asked for increased governmental protection of adult performers' health and safety. However, some argue that the adult film business may already be regulated to wear condoms by the California Division of Occupational Safety and Health (“Cal/OSHA”), which has a requirement that states all employers must provide their employees "barrier protection" if their eyes, skin, or other membranes are exposed to blood or other bodily fluids carrying pathogens.

A report with specific details on the hearing will be released in the next two to three weeks. Koretz’s recommendations to the state concerning the best way to resolve this issue will be included in the report. Unsure of the nature of his recommendations, Koretz said, “It’s a lot of food for thought and we’re going to analyze all of the information we have and come up with something thoughtful and intelligent to respond.”

Z.J. Gifts Supreme Court Decision
The Supreme Court's recent decision in City of Littleton v. Z.J. Gifts concerned an adult bookstore, Christal's, which opened in Littleton, Colorado. The bookstore did not apply for a license under the adult-business ordinance, but opted to open in violation of the ordinance and challenge it in federal court, arguing that it violated the First Amendment in various respects. Licensing schemes such as that adopted by Littleton, are subject to strict ‘procedural safeguards’ to guard against undue delay in making a licensing decision. One of those safeguards is the requirement of prompt judicial review of any decision to deny a license to engage in protected speech. The Supreme Court reviewed the case to clarify the issue of whether the First Amendment requires a prompt judicial determination of the validity of the denial, or simply prompt access to judicial review, by common law on statutory appeals procedures. In a ruling written by Justice Stephen Breyer, the Court decided that when a government denies adult business licenses, courts must promptly review and rule on the issue; prompt access to a court is insufficient. However, the Court reversed the appellate court’s ruling on the issue, finding that the state’s common law appeals procedure provided prompt judicial review in the abstract, and that there was no reason to conclude that state court judges will not treat appeals of licensing denials in First Amendment cases with proper sensitivity to the loss of speech at issue. Thus, state court judges are expected to promptly expedite such cases and render prompt determinations of the issues when confronted with license denials.

As Justice Breyer's majority opinion stated, "A delay in issuing a judicial decision, no less than a delay in obtaining access to a court, can prevent a license from being issued within a reasonable period of time." However, he went on to write that Colorado's regular procedures for handling civil lawsuits satisfy the requirement for prompt decisions, "as long as the courts remain sensitive to the need to prevent First Amendment harms and administer those procedures accordingly." The fear raised by the decision in the case is that courts can treat appeals from adult businesses the same as other types of suits, where the wheels of justice often grind slowly. In light of this decision, litigants would now need to show that a state court actually delayed the review of a license denial in the course of common law appellate review, in order to establish a First Amendment violation. The courts were previously split as to whether the potential for such delay alone gave rise to a First Amendment violation.

Obscenity Prosecutions
Three men were indicted by a federal grand jury on charges of obscenity for allegedly selling sadomasochistic and rape videos on the Internet. Brent Alan McDowell and Clarence Thomas Gartman face charges of conspiracy to distribute, and transportation of, obscene material, aiding and abetting, and mailing obscene materials. Lou Anthony Santilena is charged with conspiracy to distribute obscene material and mailing obscene material. The three men were allegedly associated with Forbiddenvideos.com and Fetish1000.com, several years ago. McDowell and Gartman were found in Canada, though the assistance of Canadian law enforcement authorities. They now face extradition to the U.S. If convicted, Santilena faces ten years, and Gartman and McDowell each face a mandatory federal prison sentence in the range of roughly 3 – 7 years under the federal sentencing guidelines.

Patent On Porn?
Acacia Research Corporation is now trying to enforce a patent on all adult oriented sites by filing a class action lawsuit against all websites using video or audio which require Section 2257 statements and are not paying Acacia a percentage of the revenues. General Counsel for Acacia Robert Berman stated that people, including those in the adult entertainment industry, have been stealing Acacia’s intellectual property for many years. On July 7th, the judge is expected to render a decision concerning whether this class action lawsuit will be allowed to continue. If the lawsuit is approved, every adult site using audio or video without a license from Acacia will be forced to defend Acacia’s patent claims in court.

Legal Victories
A Superior Court jury awarded the Flesh Club, a nude cabaret, $1.4 million for lost profits from when the city of San Bernardino forced it to shut down for four years between 1995 and 1999.  Manta Management, the Flesh Club's parent company, argued it was entitled to damages during the club’s forced closure when the city of San Bernardino refused to allow the club to operate due to an ordinance that was later declared unconstitutional.  However, jurors did not completely side with the club when they agreed with the city that some profits from the club arose from "illegal activities."

Project SLAM-SPAM
Despite the CAN-SPAM Act that became effective on January 1, 2004, spammers have been forwarding an increased amount of mass email and very few have been caught due to the difficulty in locating spammers. According to Network Security Company MX Logic, one out of six adult unsolicited emails complied with the CAN-SPAM Act’s labeling requirements. Thus, the war against spam has gone to private investigators at large software companies and law enforcement officers who are using traditional investigative techniques as well as cyber-sleuthing in their attempt to catch spammers.

The Direct Marketing Association has paid $500,000 to hire 15 investigators to work with F.B.I. and other governmental agencies in a program known as Project Slam-Spam. Daniel Larkin, chief of the FBI’s Internet Crime Complaint Center which coordinates Project Slam-Spam, said "Initially you start to work backwards from the e-mail and find that to be a very frustrating route. That doesn't lead to a live body. We have collectively realized you have to go the other way and follow the money trail." Project Slam-Spam has enough evidence against at least 50 spammers that it will continue to hand over to prosecutors. So, it more important now, than ever, to comply with the requirements of the CAN-SPAM Act.

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 much of the significant Free Speech litigation before the United States Supreme Court over the last 40 years. 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, www.FirstAmendment.com or AOL Screen Name: "Webattorney."


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