The trial judge in the Lacey and Larkin case has ruled that the First Amendment does not shield the veteran newspapermen from prosecution for their former ownership of Backpage.com.
In a 22-page order filed in federal court in Phoenix on October 24, U.S. District Court Judge Susan Brnovich denied a defense motion to dismiss the 100-count indictment in the Lacey and Larkin case. The judge found that, given the government’s charges, the First Amendment’s guarantee of freedom of speech and freedom of the press do not apply to the ex-owners of the erstwhile online listings Goliath, Backpage.com.
Filed earlier this year by attorneys with the law firm of Davis Wright Tremaine (DWT), the motion to dismiss argues that the millions of adult ads posted on Backpage before it was seized by the FBI in April 2018 were presumptively protected by the First Amendment.
The DWT motion claims the government is making impermissible assumptions of illegality based on vague language in those ads. Also, prosecutors are pursuing a “novel theory of vicarious liability,” in an attempt to hold the site’s former owners, veteran newspapermen Michael Lacey and Jim Larkin, and four co-defendants associated with the site, criminally responsible for content posted by third-party users.
However, Brnovich rejected the DWT motion in toto, siding with the government as prosecutors and defense attorneys continue to engage in legal skirmishes leading up to a trial currently scheduled to begin May 5, 2020.
Citing court precedent, the judge explained that at this point in the proceedings, she must accept as true the U.S. Justice Department’s allegations against the defendants, which include conspiracy, money laundering and the facilitation of prostitution across state lines under the U.S. Travel Act.
Though Brnovich concedes that the First Amendment “provides additional protections in prosecutions based on speech,” these protections are “not unlimited.” She notes that the government can restrict certain types of speech, such as “obscenity, defamation, fraud, incitement, and speech integral to criminal conduct.”
According to the allegations in the indictment, she writes, the defendants knew that “the overwhelming majority of the website’s ‘adult’ and ‘escort’ ads were actually ads for prostitution.” And, goes the logic, since prostitution is illegal in 49 states and all but a few counties in Nevada, so-called “prostitution ads” are by definition illegal ads.
Brnovich’s ruling was a disappointment for the defense and a win for the prosecution in a complex case involving one of the most egregious acts of direct government censorship in recent memory: the FBI’s seizure and shut down of Backpage on April 6, 2018.
Thus, Brnovich concludes, based on the allegations in the indictment, that the First Amendment does not shield Lacey, Larkin and the others from prosecution for the promotion of prostitution. But, she writes, “The government may eventually fail to prove the facts alleged in the [indictment].”
In the meantime, “the court cannot consider the adequacy of the evidence. That will be the jury’s task. Still, Brnovich remains “convinced the factual allegations in the [indictment] are sufficient to show the ads were for prostitution.”
Similarly, Brnovich shot down another defense argument: that the First Amendment requires the government to demonstrate specific knowledge by the defendants of the 50 adult ads mentioned in the indictment.
The government never attempts to link these 50 ads to the defendants. Instead, the government relies on what the defense describes in its motion as a “general knowledge” that Backpage was “used by third parties to advertise prostitution.”
Brnovich states that she is “unpersuaded” by the defense’s First Amendment arguments, finding that the indictment is “not unconstitutionally deficient.” She also believes that the government has met its burden under First Amendment jurisprudence to show that the language at issue was not 1A-protected.
The Problem with the Prosecution
Though defense attorneys declined to comment on the judge’s order to Front Page Confidential, Brnovich’s ruling was clearly a disappointment for the defense and a win for the prosecution in a complex case involving one of the most egregious acts of direct government censorship in recent memory: the FBI’s seizure and shut down of Backpage on April 6, 2018.
The seizure coincided with the feds’ arrests of Lacey and Larkin, who were singled out by raids on their homes, the confiscation of their assets and personal property and a week-long detention behind bars, until they each were released on $1 million bonds.
Though Lacey and Larkin sold Backpage to company CEO Carl Ferrer in 2015 in a seller-financed deal, the feds insisted that the pair secretly controlled the site. Further, the government accused the listings giant of knowingly promoting illicit commercial sex, despite the site’s cooperation with law enforcement and its extensive moderating practices that sought to keep illegal content off the site.
Just before the initial indictment was unsealed in the case, Ferrer flipped for the feds, pleading guilty to one count of conspiracy. As part of the deal, he’s expected to testify against Lacey and Larkin at trial.
And yet, Ferrer’s statements to the government, released to the defendants as part of the process of discovery, have undermined some of the prosecution’s claims in the indictment, according to a separate motion to dismiss filed on Oct. 18 by Ariel Neuman, an attorney for one of Lacey and Larkin’s co-defendants.
Neuman’s filing, which Front Page Confidential discussed in a previous post, accuses the government of perverting the grand jury process by dishonest means, such as cherry-picking quotes from documents and leaving out exculpatory information. The Neuman motion claims prosecutors misled the grand jurors, and by extension, the judge as well, whom the law compels to accept the prosecution’s indictment as true at this stage in the proceedings.
Taking anything involving sex online at face value is ludicrous. Online, people assume different identities, lie about their age and use terms that are open to interpretation.
For instance, Brnovich draws on the indictment’s characterization of a Powerpoint presentation created by Backpage in September 2011 as part of a bid to sell the company. Brnovich writes that “the defendants acknowledged the non-adult sections of Backpage existed to show ‘plausible deniability’ and make the website more palatable to ‘law enforcement.'”
But not only is that “plausible deniability” quote taken out of context by the prosecution, any review of the actual document, which Neuman published as an exhibit to his motion, reveals that Backpage saw non-adult ads as part of the financial strength and future of the site, not as a fig leaf for illegal activity.
The presentation acknowledges the importance of the adult category to the bottom line, but it also reports that 69 percent of the total ads on Backpage “are in non-adult categories.”
Moreover, the document explains that maintaining “a vibrant general purpose classifieds site” strengthens Backpage’s “defensible market position in the adult category,” in part because it creates a “mainstream environment for site participants and allows ‘plausible deniability’ for exposure.”
The plausible deniability is for the site’s participants, i.e., its users, not law enforcement. In fact, the Powerpoint slide notes that Backpage “works closely and proactively with law enforcement,” and boasts a “one-day turnaround” for subpoenas, as compared to a “4-6 week turnaround for Facebook.” Indeed, Backpage was proud of its cooperation with law enforcement.
This is just one example of the government’s duplicity. Consult the link to Neuman’s grand jury motion for more.
The Wisdom of Posner
Brnovich accepts the DOJ’s allegation that Backpage stripped terms, such as “Girlfriend Experience” (GFE), “Lolita” and “New in Town” from ads because the terms allegedly “indicated prostitution or underage prostitution.” Prosecutors claim Backpage then allowed the ads to be posted, supposedly aware that they were for illicit sex.
But the government’s assumptions are deeply flawed, and fail to understand that sexuality, particularly on the internet, involves a superabundance of fantasy. Taking anything involving sex online at face value is ludicrous. Ask anyone who’s ever used a dating site. Online, people assume different identities, lie about their age and use terms that are open to interpretation.
Moreover, Backpage had a policy of blocking ads for illicit content and reporting them to the National Center for Missing and Exploited Children (NCMEC), the government-funded non-profit that directs such alerts to the proper law enforcement agency. Like many websites, Backpage had a list of prohibited terms, one that it apparently developed in consultation with NCMEC.
Seventh Circuit Appeals Court Judge Richard Posner intuitively grasped the nature of online adult advertising. In 2015, the now-retired jurist authored a decision in favor of Backpage in its dispute with Cook County, Illinois Sheriff Tom Dart, who had threatened credit card companies with prosecution unless they cut business ties with Backpage.
Posner ordered Dart to cease and desist. And the judge did his best to disabuse the sheriff of assumptions regarding Backpage’s ads.
For example, Posner wrote,
Nor is Sheriff Dart on solid ground in suggesting that everything in the adult section of Backpage’s website is criminal, violent, or exploitive. Fetishism? Phone sex? Performances by striptease artists? (Vulgar is not violent.) One ad in the category ‘dom & fetish’ is for the services of a ‘professional dominatrix’ — a woman who is paid to whip or otherwise humiliate a customer in order to arouse him sexually…It’s not obvious that such conduct endangers women or children or violates any laws, including laws against prostitution.
Along the same lines, Posner criticized the lower court’s observations about the website, writing the following:
The district judge remarked ‘that the majority of the advertisements [in Backpage’s adult section] are for sex’—but a majority is not all, and not all advertisements for sex are advertisements for illegal sex. There is no estimate of how many ads in Backpage’s adult section promote illegal activity; we just gave examples of some that do not.
Hence the problem with prosecutors making sweeping assumptions about the adult ads that were on Backpage.
Posner’s astute analysis demonstrates why the government should be required in this case to prove that each defendant was aware of the specific speech at issue — the 50 ads in the indictment — and was cognizant of their illegality. Otherwise the government’s assumptions lead inevitably to the suppression of speech that is protected by the First Amendment, as happened on April 6, 2018, when the government erased Backpage from the internet.
An amicus brief filed in support of DWT’s motion to dismiss on behalf of the DKT Liberty Project, the Cato Institute and the Reason Foundation raises the alarm on the government’s actions in this case. The brief notes that the government’s indictment has exposed the defendants to “costly prosecution and potential prison sentences and fines” by an “inversion of the constitutional presumption protecting speech.”
And if the government can do it to Backpage, it can and will do it to others, minus what the brief refers to as a “meaningful judicial check.”
If you think of Backpage as a bookstore, the government’s indictment would be analogous to the authorities declaring by fiat that some of the books or magazines for sale in that store are illegal, allowing the police to take over the bookstore, close it down, arrest the bookseller, confiscate his property and freeze his assets.
It’s the sort of thing that has happened in the past in America, before the courts declared such prior restraint of speech forbidden by the First Amendment. That it’s happening again in the internet age should frighten everyone.
For more news on the Lacey and Larkin case, please read:
Prosecutors Poisoned Grand Jury Process in Lacey and Larkin Case
Feds Bungled Preservation of Server Evidence in U.S. v. Lacey and Larkin
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