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2257 – This Means War: 1

2257 – This Means War: 1

July 28, 2005
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" This article is not a 2257 compliance primer. It is, however, a call to arms. "

Unless you have been vacationing in the Amazon, by now you know that Attorney General Gonzales has approved and published revised regulations implementing 18 U.S.C. § 2257.

It would be an understatement to say that the new regulations have created an uproar in the industry. I cannot recall a time when our office has received so many calls from clients and other information seekers regarding a legal subject. Clearly, "2257" compliance is on the front burner for webmasters, content providers and video producers across the country.

A number of industry attorneys and legions of board contributors have commented on the regulations. Unfortunately, there are some erroneous and confusing interpretations in circulation regarding both the new and existing regulations. This is understandable given that the regulations are very complex and often misleading, perhaps intentionally so.

Moreover, the regulations pertain to a very wide range of business models involving content production and distribution at every level in the industry.

Our experience counseling clients regarding 2257 issues over the years has taught us that interpretation of how the regulations apply to a particular business is very fact intensive and often depends on what activities the business is engaged in or is contemplating.

This is particularly the case regarding our Internet-based clients that often implement new and innovative business models and procedures not directly or clearly addressed in the regulations.

Consequently, in contrast to many other legal topics for which we have published detailed information, our firm's policy is that 2257 compliance matters are simply too complex, too fact-based and too easily misunderstood to appropriately, let alone comprehensively, address in legal op-ed pieces. We believe that 2257 compliance is the type of matter that simply requires direct legal guidance from a qualified adult entertainment attorney.

I think the matter was probably best stated recently by my good friend and colleague Jeffery Douglas at the Free Speech Coalition general meeting addressing the new regulations, where he said:

"Basically, I know that every sane human being doesn't want to hear this from a lawyer, but it is suicidal madness for anyone who's producing not to pay a fuckin' lawyer [who knows what they're doing] not to come and take a look and check it out, because no matter how smart you are, no matter how hard you do the research, it is first of all virtually impossible that you can have it all together. There are just too many rules, too many applications, and there's not like a place that you can go and read the rules. So much of it has to do with what the Justice Department interpreted ALA vs. Reno to mean, versus Sundance, and all this crap. Hire a lawyer to take a look; it's worth it."

Consequently, this article is not a 2257 compliance primer. It is, however, a call to arms.

The Gauntlet
The new regulations are nothing short of a declaration of war against the adult entertainment industry. The government now directly threatens tens of thousands of tax-paying and law-abiding creators and publishers of constitutionally protected material with five years of incarceration for the slightest failure to comply with a complex and outrageously onerous set of regulations.

In fact, compliance with the obligations and burdens imposed by the revised regulatory scheme will simply be impossible for many adult entertainment businesses.

Consider the following, which are only a few of the many onerous and unjust requirements imposed by 2257 that soon confront the industry:

1. Almost everyone in the business will need to have copies of all the records required by 2257 and to maintain them as a "producer."

This is because the comments accompanying the new regulations make it clear that the government intends to apply the entirety of the record keeping requirements statutorily imposed on "producers" to an expanded class of "secondary producers," which will now include by definition any person that "inserts on a computer site or service a digital image of, or otherwise manages the sexually explicit content of a computer site or service that contains a visual depiction of an actual human being engaged in actual sexually explicit conduct, including any person who enters into a contract, agreement, or conspiracy to do any of the foregoing." Sec 75.1(c)(2).

While our firm has always counseled our clients about the likely application of secondary producer requirements to webmasters, what is new is the government's extension of the secondary producer requirements to those who are merely contracting with one or more parties that insert subject content onto a site or managing a site's content.

What is also new and troubling is the government's strident and disingenuous repudiation of the 10th U.S. Circuit Court of Appeals opinion in Sundance Associates Inc. v. Reno, 139 F.3d 804 (10th Cir. 1998).

In Sundance, the court held that the statutory definition of "producer" did not distinguish between "primary" and "secondary" producers and entirely exempted from the record keeping requirements those who merely distribute or those whose activity "does not involve hiring, contracting for, managing, or otherwise arranging for the participation of the performers depicted." 18 U.S.C. § 2257(h)(3).

While the reasoning employed by the court in Sundance was constitutionally sound, the applicability of the ruling has always only extended to the states within the 10th Circuit (Utah, Wyoming, Colorado, Kansas, New Mexico and Oklahoma).

Unfortunately, many webmasters in the industry outside of the 10th Circuit have elected not to create and maintain a record-keeping system regarding content on their website obtained from third-party producers, choosing instead to bet that Sundance would become the law of the land.

The DOJ's comments make it clear that any party relying on the ruling in Sundance, perhaps even parties in the 10th Circuit, should beware. Specifically, the accompanying comments claim that Sundance does not reflect the correct view of the law and explicitly rejects comments to the contrary. Federal Register: May 24, 2005, Vol. 70, No. 99, page 29609.

Thus, the government's view is clear: Regardless of whether you are a primary producer of a secondary producer of content subject to the 2257 regulations, you must acquire all the 2257 records pertaining to that material and you must maintain those records in the manner prescribed by the regulations.

This would include, among other things, the maintenance of a copy of each depiction in an alphabetical or numerical cross-referencing system that includes the depiction's title or identification number, the names and aliases of all person's depicted in the material, the dates of production and, starting June 23, "a copy of any URL associated with the depiction or, if no URL is associated with the depiction, another uniquely identifying reference associated with the location of the depiction on the Internet." Sec. 75.2(a)(I)(ii).

After June 23 it would, also appear that the URL association and depiction copy requirements would even apply to content dynamically, or even transitively, associated with different URLs.

In part two we'll examine more aspects of the enhanced 2257 requirements.

Gregory A. Piccionelli is one of the world's most experienced Internet and adult entertainment attorneys. The Los Angeles attorney can be reached at Piccionelli & Sarno at (310) 553-3375 or www.piccionellisarno.com.


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