CHICAGO — A federal appeals court this week ordered the Cook County Sheriff’s Department to halt lobbying major credit card companies that do business with Backpage.com.
Cook County Sheriff Tom Dart was sued by Backpage in July after he successfully placed pressure on Visa and MasterCard to stop processing credit card transactions for Backpage. Dart said the the pressure was necessitated by “years of growth in the ... sex trade.”
In its order, the 7th Circuit U.S. Court of Appeals issued a ruling forbidding Dart's office from "taking any actions to formally or informally request, direct, persuade, coerce, or threaten credit card companies" to get them to terminate relationships with Backpage.
The appellate ruling does not affect Backpage's ongoing federal suit against Dart that seeks damages for what the online classifieds ads site claims was a crippling financial blow.
Industry attorney Larry Walters of Walters Law Group said the ruling by the 7th Circuit establishes important legal precedent in the field of "intermediary liability."
“The court recognized that a sheriff must be very careful in what he says, when acting in his official position,” Walters told XBIZ. “By forcing the credit card companies to bend to his will, the sheriff engaged in an extra-judicial censorship campaign which is forbidden by the First Amendment.
“At the hearing on this matter, Judge Posner — the author of the opinion — openly questioned the government's view that Backpage facilitated the ‘violent industry’ of sex trafficking: ‘Is phone sex violent? What about all the old men who would like to be seen with a young woman on their arm? It’s not all sex. Even if Backpage abandons escorts and body rubs and so on … it’s really just a dating service…. I think it’s outrageous that it’s violence, and so forth.’”
Walters said that as state and federal agencies jump on the “prosecution bandwagon” against online advertising networks, this week’s decision raises important questions about the legitimacy of the targets.
“Holding an online service provider responsible for the postings of a third party user threatens the very functionality of the internet,” Walters said. “Fortunately, the 7th Circuit made the right call in this politically charged environment.”
Backpage was joined by other non-party groups in separate friend-of-the court briefs in Backpage's appeal at the 7th Circuit. Those groups included The Center for Democracy & Technology, Electronic Frontier Foundation, Association of Alternative Newsmedia, CATO and Reason.
