Legal Panel Tackles CAN-SPAM, Obscenity, New 2257 Regs

LAS VEGAS — A panel of five of the adult industry’s finest attorneys Thursday assembled to address several major legal issues confronting the industry, giving a presentation that ran over two hours before a standing-room-only crowd at the XBIZ Summer Forum.

Moderated by XBIZ Publisher Tom Hymes, the legal panel included president of the First Amendment Lawyer’s Association Reed Lee; Rob Apgood of the Seattle-based law firm Carpe Law; Lawrence Walters of Weston, Garrou DeWitt & Walters; Greg Piccionelli of the Los Angeles firm Piccionelli and Sarno; and Jeffrey Douglas, chairman of the Free Speech Coalition.

Apgood was first to address the audience, focusing on issues surrounding his defense of clients charged with violations of the CAN-SPAM Act based on the actions of marketing affiliates who allegedly directly violated CAN-SPAM.

”What it appears that the government is doing is attacking the affiliate model,” Apgood said.

Apgood explained that the government started out the cases arguing that CAN-SPAM is a “strict liability” statute, and asserting affiliate programs are directly liable for the actions of their affiliates. According to Apgood, the government is wrong — and the courts agree with him.

“The courts said ‘No, this is not a strict liability standard,’” Apgood said. “The government must now show that the defendants intended for their advertising to be used in email [that violated CAN-SPAM]. Did they induce their affiliates to violate CAN-SPAM? The good news, in this case, is that the answer is ‘absolutely not.’”

Following Apgood, Walters spoke about a pair of obscenity cases he is handling — the prosecution of Karen Fletcher, aka Red Rose, and the case of Clint McCowen, aka Ray Guhn, who faces charges related to obscenity and prostitution in Florida.

Walters said that Fletcher’s case arose from her site, on which Fletcher and other authors posted stories covering, among other topics, the sexual abuse of children. According to Walters, Fletcher, herself a victim of sexual abuse, began writing the stories at the suggestion of a therapist who thought it could help Fletcher deal with the ongoing mental anguish stemming from her abuse.

Walters noted that the Fletcher case is the first obscenity prosecution of a text-only work since the establishment of the Miller obscenity standard in 1973.

“This is your tax dollars at work in the Department of Justice of Alberto Gonzales,” Walters said.

Walters said that the prosecutions of his clients, as well as those of Max Hardcore, JM Productions and MoviesByMail are just the tip of the iceberg, and he anticipates that there will continue to be obscenity indictments handed down throughout the remaining months of the Bush Administration.

“The gauntlet has been thrown down and the attack is not over yet,” Walters said.

Piccionelli encouraged the crowd to contribute to the legal defense funds set up for defendants in obscenity cases, saying that over the next year or so, the industry needs to pull together to help those targeted in obscenity prosecutions.

“Any of you could potentially find yourself targeted in one of these prosecutions,” Piccionelli said. “It really is a case of ‘but for the grace of God go I.’”

Douglas noted that each of the obscenity cases currently in progress has a unique set of facts, some of which are very favorable to the defendants. In the JM Productions case, for example, the same videos that have been alleged to be obscene have also been distributed by a company that went bankrupt, and so is now being operated under the auspices of the government itself.

The fact that the government itself is in effect selling and distributing the same content it has alleged to be obscene presents a real problem for the prosecution in the case, according to Douglas.

“This sort of thing doesn’t happen often,” Douglas said. “In fact, it’s the kind of thing that defense attorneys dream about happening to them.”

Douglas said that despite the successes that the FSC and others who defend the adult industry have had in court, there is no indication that the Department of Justice has any intention of giving up on the idea of cracking down on the industry.

“Policymakers for the DOJ have unending hostility [toward the industry],” Douglas said. “Some of them believe it is their religious obligation to stop people from masturbating — and I’m not kidding here.”

The second half of the panel discussion was dedicated to the new proposed 2257 regulations, which were just published to the federal register Thursday morning.

Lee said that on a scale of one to 10, with one being the worst-case scenario, the new regulations rate a “3 or 4.”

“The Justice Department has had no shame in terms of coming up with the most Byzantine ways in which you are required to keep these records,” Lee said.

Piccionelli focused in on changes to the labeling provisions, noting that Congress had taken a significant step backwards with respect to how websites handle 2257 compliance statements. After the FSC managed to win concessions from the Department of Justice and limit the labeling requirement to primary entry points of websites, Congress pushed the standard back to a far more burdensome requirement.

“Congress, in its infinite wisdom, changed it so that the statement must now be on every page of the website [that contains sexually explicit materials],” Piccionelli said.

Other changes under the new regulations pertain to the “lascivious display of the genitals,” a term that Lee said he gets questions about all the time from adult industry clients.

“People ask me ‘what does this mean?’” Lee said. “Unfortunately, these regulations don’t help much in terms of answering that question.”

Lee added that it was important to note that the new proposed regulations are in fact still in the proposal stage, and that the publication of the regulations is followed by a 60-day period for public comment.

All the attorneys on the panel encouraged the participation of the people within the industry during the public comment period.

Apgood said that it was crucial for the industry to “mobilize as a whole,” and make their objections to the regulations known to the Department of Justice.

“If you don’t speak up, then the DOJ and the courts turn around and say, ‘Well, they had 60 days to comment, and hardly anybody seemed to mind the new regs,’” Apgood said.

As for the FSC’s challenge to the 2257 regulations, Douglas said that unless the regulations change substantially before their finalization, the FSC will continue to fight them vigorously.

Emphasizing that point, FSC Executive Director Diane Duke spoke from the audience and restated the group’s commitment to defeating the record-keeping statute.

“We’re going to continue to fight this, I’d like to say, to the death,” Duke said, adding that if the FSC cannot kill the regulations outright, they will fight to get them into “some palatable form.”