In an interview Thursday evening, attorney Greg Piccionelli told XBIZ that the 9th U.S. Circuit Court of Appeal’s order that reversed a lower court’s denial of bail for James Schaffer and Jeffrey Kilbride is a monumental one.
“What the 9th Circuit is telegraphing to us is that there are numerous issues [relative to obscenity and bulk email advertising] that raise substantial questions,” Piccionelli said. “It’s a big victory.”
Kilbride of Venice, Calif., was sentenced to more than six years and Schaffer of Paradise Valley, Ariz., was sentenced to more than five years in prison after they were found guilty of embedding hardcore porn in mass emails, making it available and visible to anyone who opened the messages.
This week’s order reversed a federal court’s denial of bail, finding that the adult industry businessmen had shown "by clear and convincing evidence" that an appeal raises a "substantial question" of law or fact "likely to result" in a reversal or order for new trial.
At the time of sentencing, adult industry attorney Gary Kaufman said that “every adult website operator in this country should be losing sleep wondering if they will be the next target of an overzealous government prosecution.”
On appeal, Kaufman of Los Angeles-based the Kaufman Law Group represented Schaffer and Piccionelli of Los Angeles Piccionelli & Sarno represented Kilbride. Both attorneys were not involved as the pair's trial counsel.
Kaufman and Piccionelli argued in their joint motion to the 9th Circuit that the conviction of Shaffer and Kilbride raised numerous appeal issues, including the issue of the applicable community standard for obscenity over the Internet and constitutionality of the criminal provisions of the CAN-SPAM statute.
Kilbride and Schaffer began their spamming operation in 2003, using international servers and mismatching "reply to" and "from" addresses, making it difficult to trace the spam emails.
The Justice Department said they registered their domains under the name of a "fictitious employee at a shell corporation" and that the two had set up in the Republic of Mauritius, another serious CAN-SPAM violation.
They also are alleged to have used overseas banks to launder and hide money from the IRS.
Schaffer also was charged with 2257 violations, after officials discovered he had not maintained appropriate records for the adult performers featured on Boobs.com, CumShots.com and FaceSat.com, three websites he operated overseas through The Compliance Company and Ganymede Marketing.
Kilbride and Schaffer initially were charged in 2005.
With the convictions, both were fined $100,000 and forced to hand over $1.1 million of their $2 million in spam profit.
They also were ordered to pay America Online $77,500 after the conglomerate claimed to have had 1.5 million customers complain about spam.
"Everyone in the industry should pay attention to this case,” Kaufman said late Thursday. “I could walk by any booth at the upcoming AVN expo and find material that pushes the obscenity envelope to a similar, or even greater, degree than the ones that got our clients convicted.
“Winning this motion was a major first step in gaining both vindication for Mr. Schaffer and Mr. Kilbride, and greater protection of our 1st Amendment rights," he said.
Piccionelli added that the district court’s decision was “ill-founded” and that the reversal of the ruling sends a clear message to the adult entertainment industry.
“First, the 9th Circuit’s [order] reminds us that we are truly fortunate that our freedom of expression, including erotic expression, is protected by our extraordinary Constitution and legal system,” Piccionelli said.
“But the fact that Shaffer and Kilbride were convicted and about to commence serving their terms is also proof that the government will try to take that freedom away to further the agenda of religious conservatives, even if it means putting people like our clients through the hellish ordeal of a criminal prosecution and long prison terms,” he said.
Kaufman said that bail pending appeal is rarely granted in such cases.
“It is generally only allowed for those who establish that there are substantial issues on appeal likely to result in reversal or new trial,” Kaufman said.
“Obviously, Greg and I are ecstatic about the decision,” he said. “We believe that this case may well change the legal standard for obscenity in the Internet age.”