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Reading the Tea Leaves? Discerning the Ultimate Fate of Section 2257

Thursday, June 16, 2011      Text size:   

Adult content producers and webmasters have become increasingly resigned to the fact that Section 2257 compliance is here to stay.  Renowned industry attorney Greg Piccionelli, Esq., has recently written a detailed set of articles reminding producers of their complicated obligations necessary to achieve 100% compliance with 2257. The increased focus on records keeping obligations is the result of a confluence of events, such as; the district court’s dismissal of the Free Speech Coalition’s (FSC) most recent legal challenge to the statute and associated regulations; the historical trend in the courts in previous 2257 challenges; and the potential for a Republican president in 2013, complete with a newly-appointed conservative Attorney General. 

So, is this reluctant acceptance of 2257 as a fact of life warranted?  Or is there still a possibility that these burdensome obligations will be lifted – potentially in favor of a more realistic and constitutional system of performer age verification?  The answer to these questions requires that we delve into the history of the challenges to Section 2257, and recap the current status of the law.

Initially, the Free Speech Coalition should be congratulated for continuing to fight the good fight against Section 2257.  They’ve litigated hard in several courts in the attempt to beat back these sweeping regulations. J. Michael Murray, Esq., whose firm was hired to mount the most recent challenge, which is currently pending in the Third Circuit Court of Appeals – is one of the best First Amendment lawyers in the biz.  But given the history of previous legal challenges to the statute and the way the wind is blowing in the current case, adult webmasters and content producers may need to come to grips with the fact that 2257 will be upheld, therefore, enforcement by the FBI may resume at any time.

The previous attempts to invalidate 2257 have spanned over two decades since its inception in 1988.  The original law was struck down as unconstitutional on First Amendment grounds shortly after its passage. American Library Ass’n. v. Thornburgh, 713 F. Supp. 469 (D.D.C. 1989).  After the Thornburgh challenge, Congress amended the statute to no longer utilize a rebuttable presumption that the performer in question was a minor, but to directly impose criminal sanctions for noncompliance. The ALA challenged 2257 again challenged, but this time the First Amendment didn’t come out on top.  In American Library Ass'n. v. Reno, 33 F.3d 78 (D.C. Cir. 1994), the amended version of 2257 was upheld, as the court rejected the ALA’s argument that the record-keeping provisions were content-based restrictions.  In doing so, the Reno court agreed with the feds that record-keeping requirements are necessary to prevent the exploitation of children and a commercial market for child pornography.  Further, the district court tailored the scope of the record-keeping provisions by narrowing the definition of "secondary producers" and eliminating the indefinite temporal requirement for maintaining records.

All was calm on the 2257-front for a few years until Sundance Assoc., Inc. v. Reno, 139 F.3d 804 (10th Cir. 1998), when the Tenth Circuit decided to shake things up a bit and take the DOJ down a peg.  The Sundance court invalidated the regulations that imposed records keeping obligations on “secondary producers;” a broad category of ‘producers’ that was created purely by agency regulation and not referenced in the actual 2257 statute.  The industry as a whole generally relied on the Sundance decision as the correct interpretation of the law.  In the real world that meant that only original producers of adult content kept records, and webmasters that were uninvolved with content production maintained no records of their own, but simply identified the ‘primary producer’s’ records custodian on their website, in order to discharge their perceived obligations under the statute.  The DOJ disagreed with the Sundance interpretation of the law, but the statute went unenforced for several years after the Sundance case, so the industry became complacent with the status quo. 

That all changed in 2005, when the DOJ passed new regulations which re-ignited the “secondary producer” debate, by imposing records-keeping requirements on all producers including webmasters that published material on a website.  The Code of Federal Regulations issued in June of 2005 defined a secondary producer as one who "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 or simulated sexually explicit conduct."  Overnight, hundreds of thousands of websites became illegal given the lack of 2257 records to back up the content appearing on those sites. 

In response to these amended regulations, and the tremendous panic in the industry, the FSC filed suit in Colorado, which happens to be within the realm of the Tenth Circuit, and was therefore bound to follow the Sundance case as precedentFree Speech Coalition v. Gonzales, 406 F. Supp. 2d 1196 (D. Colo. 2005).  On December 28, 2005, the FSC received a late Christmas present when the district court, following Sundance, preliminarily enjoined enforcement of the new requirements for all secondary producers who were members of the FSC at the time.  As the Attorney General commenced the appeals process in Gonzales, Congress was taking matters into its own hands by passing the Adam Walsh Child Protection & Safety Act, which officially amended 2257 by adding “secondary producers” to the list of those responsible for the record keeping obligations.  This essentially ‘fixed’ the main problem identified in the Gonzales case.  In the wake of the Adam Walsh Act passage, the Gonzalez court granted a partial summary judgment against the FSC in the case, finding that the Sundance decision no longer applied to 2257 as amended.  Free Speech Coalition v. Gonzales, 483 F. Supp. 2d 1069 (D. Colo. 2007).  On May 1, 2007, based on an agreement by both the DOJ and the FSC, the Gonzales court dismissed the case, likely as a result of the legislative resolution of the main legal challenge raised in the litigation.

This left 2257 in a state of presumed validity until a breathtaking win followed quickly by a heartbreaking loss in the case of Connection Distributing Co. v. Holder, 557 F.3d 321 (6th Cir. 2009) (en banc), cert. denied 2009 U.S. LEXIS 6926 (Oct. 5, 2009). In fall 2007, a panel of three judges on the Sixth Circuit Court of Appeals found the record-keeping requirements set forth in 2257 imposed an overbroad burden on protected speech.  Shortly after the opinion was issued, the government successfully petitioned the entire Sixth Circuit for en banc” review of the panel decision.  Ultimately, the en banc court rendered a devastating blow to the adult industry by vacating the well-reasoned panel decision, and upholding 2257 in the face of numerous constitutional challenges.

In 2008, the DOJ passed another set of regulations, clarifying its position on records keeping compliance by both primary and secondary producers (along with many other issues).  Those regulations became effective in March, 2009, and are what the industry lives by today.

Ultimately, the FSC mounted its most recent challenge the statute and related regulations by filing FSC v. Holder, 2010. U.S. Dist. LEXIS 75471 (E.D. PA July 27, 2010), in Pennsylvania.  However, the district court rejected the FSC’s challenges last summer, and dismissed the case (alternatively) on the grounds of collateral estoppel/res judicata, which means that the prior losses suffered by the FSC in the Gonzalez case prevented the organization from re-litigating those issues in the Holder case. Id; see Memorandum Opinion dated July 27, 2010, at p. 45.  This doctrine of ‘claims preclusion’ essentially means that the same party can’t keep suing over and over again, asking different courts (or the same court) for the same relief.  The FSC has appealed the dismissal of its most recent case to the Third Circuit, in the hopes of reviving the legal challenge and obtaining some relief on behalf of the industry. 

While the author wishes the FSC all the success in the world in its pending appeal, the chances of success in striking down 2257 are looking somewhat slim.  As is evident from the above, the majority of court decisions have rejected challenges to 2257, and the FSC has been a party to a couple of these cases already, which negatively impacts its chances of prevailing, given the issues of claims preclusion referenced above. While all the previous court decisions may be wrong, from an academic perspective, a brief gaze into the crystal ball provides a pretty good idea what will happen with the current challenge in the Third Circuit.  As a general rule of thumb recognized in the legal community, the chances of prevailing in any appeal are less than 25%.  When you factor in things like the fact that the case is being backed by the adult industry, the previous losses by the FSC, and the government’s claim that the challenged regulations are designed to “protect the children” from exposure to sexual activity, the chances of a win on appeal tend to grow even slimmer.  Anyone who’s been involved in litigation before will tell you to expect the unexpected, but truth be told; the FSC is fighting an uphill battle. 

Certainly this information will be tough to swallow for those closely involved with the case, who undoubtedly remain hopeful for a positive outcome.   But as a practical matter, any producers who are counting on invalidation of 2257 as their records-keeping strategy need to wake up and read the tea leaves – to mix a metaphor. All producers of 2257-triggering content should be in full compliance by now, in preparation for another potential loss on appeal, and eventual enforcement of the statute.  Moreover, given Congress’s track record lately and waning public approval of the current Administration, a rigorous enforcement plan could be very likely if there is a Republican to answer to in 2013.

At this point in the game, the only realistic hope for invalidating 2257 is for a party with substantial funding and completely separated from the FSC, to initiate a new challenge using a different legal strategy than that which has been employed thus far.  Unfortunately for the FSC, as a party plaintiff in the previous cases, it is burdened with these ‘res judicata’ and ‘collateral estoppel’ defenses based on its previous losses in court.  Any new 2257 challenge would need to come from a new entity, which may need to carefully avoid association with the FSC or its members, given how courts determine (based on “privity”) which parties are barred by claims preclusion defense.  Additionally, for any realistic shot at a successful claim, any new challenge would need to be based on different legal arguments and theories.  Admittedly, the arguments made in the litigation thus far have been viable and should have carried the day with any intellectually-honest judge.  But that’s not always the reality when one steps into court – particularly when the adult industry is behind the challenge.  Other potential claims remain available to be litigated, but it is uncertain whether they will ever be raised, and who would raise them.  Naturally, funding is always an issue, and constitutional litigation against the federal government is nothing if not costly.

For the foreseeable future, the industry needs to take a second look at its records keeping and labeling compliance status.  This includes so-called user generated content sites which have taken liberal advantage of the 2257 exemptions, even in some cases where the content is not truly user-generated, or does not fall into the recognized exemptions.  It’s time to dot the I’s and cross the T’s with your 2257 records, because the writing may be on the wall, for those who choose to see.  But for the time being, the only true constant for 2257 is the phrase, ‘to be continued…’

Larry Walters has been on the forefront of defending the adult entertainment industry for over 20 years, and has defended numerous high profile obscenity cases for adult site webmasters. He operates Walters Law Group (www.FirstAmendment.com) which focuses on Internet law, First Amendment issues and intellectual property.

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