Lacey/Larkin Shred Feds’ Blueprint for Censorship in Asset Seizure Fight

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Lacey and Larkin's latest brief gives prosecutors the wood-chipper treatment, metaphorically speaking. (Watchcaddy via Flickr)
After swiping millions of dollars from veteran newspapermen Lacey and Larkin, federal prosecutors concocted a bold censorship scheme that defense attorneys have just fed to the shredder.

In a May 19 filing at the Ninth Circuit Court of Appeals, First Amendment attorney Robert Corn-Revere leaves federal prosecutors’ arguments in the Lacey/Larkin case looking like Steve Buschemi’s character in Fargo following his date with the wood chipper.

In Corn-Revere’s answer to the government’s brief defending its improper seizure of all assets belonging to veteran newspapermen Michael Lacey and Jim Larkin (based on their former ownership of the now-defunct online classifieds giant, Backpage.com), the DC-based attorney lays bare the U.S. Department of Justice’s radical new plan for achieving censorship in the internet age.

First, allege that the speech in question falls into one of the narrowly-defined exceptions to the First Amendment. Then arrest the publisher’s current and former owners and execs, stacking outrageous charges against them. Finally, freeze all proceeds derived from the allegedly illegal speech (including any assets that may have “mingled” with those funds), thereby handicapping the defense.

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The new government blueprint for censorship includes false allegations and the seizure of assets. (Will Scullin via Flickr)

It’s a sinister formula that the government has utilized to great effect against Lacey and Larkin, whom the government has charged with 100 counts of conspiracy, money laundering and the facilitation of prostitution in violation of the U.S. Travel Act. The indictment is based on the unhinged theory that Lacey and Larkin are responsible for the criminal acts of others, which the government alleges are connected to adult ads posted to Backpage by its users.

As Corn-Revere points out, if the DOJ prevails, it would allow the government to impose censorship on wide swaths of heretofore protected speech.

“It would permit the government to seize Mark Zuckerberg’s assets based on accusations that Facebook facilitates recruiting by terrorist organizations, or Craig Newmark’s assets because of reports about murders connected to Craigslist posts,” Corn-Revere writes.

Read: Robert Corn-Revere’s Reply to the Government in Lacey/Larkin’s Ninth Circuit Appeal 

Similarly, the government could seize Google’s assets if it doesn’t take down websites alleged to facilitate illegal drug activity. Or it could place liens on the properties of Jack Dorsey and freeze his bank accounts based on the sex workers who solicit business on Twitter.

Nor would legacy media be immune. If the Pentagon Papers case happened today, and government prosecutors had their druthers, the government could, hypothetically, seize assets belonging to The New York Times and The Washington Post  (and/or their owners) for facilitating the theft of government secrets.

(As an aside, it’s worth noting that the mere threat of prosecution can itself act as a cudgel to impose censorship. And the government is quite capable of direct censorship as well. In the case of Backpage, the FBI seized the website on April 6, 2018 and took it offline in one of the most egregious acts of its kind in U.S. history. Flipping Backpage’s CEO Carl Ferrer helped with that. The government’s allowing him to plead to one count of conspiracy for his assistance in attempting to put Lacey and Larkin away for life.)

Corn-Revere argues there is a “basic First Amendment requirement” for the government to prove to a court that speech is unprotected “before it may impose burdens on the speaker.” Mere probable cause is not enough when the First Amendment is involved.

But the government contends its allegations are sufficient to justify the money-grab, and for more than two years it has dodged addressing the merits of the appellants’ challenges. Now the matter is fully briefed and awaits a date for oral arguments before a three-judge panel of the Ninth in Pasadena, California.

The outcome could have dire consequences for all publishers, online and off.

Banging the Tin Drum

Corn-Revere authored the opening brief to the Ninth, in which he argues at length that the government’s seizures amount to an ongoing First Amendment violation.

“The government may not restrain or punish publication of speech absent proof of illegality—mere allegations or probable cause are not enough,” he writes. “The government may never presume its conclusion that speech is unlawful.”

Without an adversarial hearing to determine the legality of the speech involved, argues Corn-Revere, the government is barred from either the prior restraint of speech or penalizing it after the fact, such as with the seizure of publishing assets, which are presumptively protected by the First Amendment.

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The 1979 film, The Tin Drum, based on the acclaimed German novel by Gunter Grass becomes an unlikely rhetorical football in the appeal. (Peter via Flickr)

Corn-Revere cites U.S. Supreme Court cases, such as a 1989 decision in Fort Wayne Books, Inc. v. Indiana and a 1991 ruling in Simon and Schuster v. Members of the New York Crime Victims Board.

In the former, the high court ruled that the seizure of an entire adult bookstore and its contents was a colossal First Amendment no-no.

In the latter, SCOTUS overturned New York state’s “Son of Sam” statute, which required that profits derived from the reminiscences of criminal activity in memoirs, films, etc. be surrendered to the state.

In its response to Corn-Revere’s opening brief, the government spends 83 pages vilifying the defendants, presupposing their guilt and assuming the illegality of all adult ads posted to Backpage — both matters reserved for trial.

The government’s response also kills a tree or two in a last ditch stab at getting the appeal booted for jurisdictional reasons.

Interestingly, the government’s pleading includes a series of logical missteps, including one involving the 1979 Academy Award-winning film, The Tin Drum, directed by Volker Schlöndorff with a screenplay adapted from the acclaimed novel by German author Gunter Grass.

In his opening brief, Corn-Revere suggests that if the government can seize assets derived from expressive materials based on mere probable cause, then in theory, it could have seized all monies derived from the film, which some detractors accused of child pornography due to scenes depicting an underage romance.

The government’s response concedes the counselor’s point regarding the film.

“If this case concerned a civil forfeiture seizure of an Academy Award winning film or some of the other hypotheticals appellants propose, relief might be available,” the government admits.

But since Backpage was, in the government’s view, an online marketplace for prostitution, regardless of the fact it has yet to prove this in court, the case involves “speech far outside of First Amendment bounds.”

Corn-Revere blasts this notion to kingdom-come with double-barreled buckshot in his reply, writing that “the government admits a party should be able to obtain relief under the First Amendment if a seizure involved ‘an Academy-Award winning film . . . or some of the other hypotheticals appellants propose.'”

‘Backpage.com was owned by newspapermen with a history of resisting abusive tactics . . . They successfully challenged state legislation targeting adult ads, blocked local law enforcement from issuing unconstitutional threats, and obtained dismissals of state prosecutions and civil suits.’ –attorney Robert Corn-Revere on award-winning newspapermen Lacey and Larkin

But the First Amendment applies to content on Backpage, just as it does to Volker Schlöndorff’s film, the 1A attorney tuts.

“Categories of unprotected speech, regardless of subject matter, are subject to the same constitutional rules,” writes Corn-Revere. “The government offers no rationale for treating ‘prostitution advertising’ differently from other categories that permits it to assume the truth of its allegations.”

Corn-Revere Crushes It

The prosecution spends much of its response trash-talking Backpage. Corn-Revere calls this out as an attempt to distract from the appeal’s focus on the First Amendment. By painting Backpage “in the worst possible light,” the government suggests that “it has already proven its case” and that it’s “permissible to pass judgement now.”

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If prosecutors’ censorship scheme had been in play in 1971, the Nixon administration could have seized the assets of the owners of The New York Times and The Washington Post. (Rory Finneren via Flickr)

Ultimately, a jury trial, currently scheduled to begin August 17, will decide if the government is right that all of the adult ads and personals on Backpage were illegal speech. Such listings reportedly made up less than a one-third of the six million ads per month posted to the site by users. These included ads for a variety of goods and services, such as cars for sale, dog-walkers, rooms to let and yard sales.

As with the number one online listings site, Craigslist.org, Backpage had a section where users posted Constitutionally-protected adult ads for escorts, massage, phone sex, strippers, fetishes, and so on, all 100-percent legal.

Backpage’s prosecution, writes Corn-Revere, is “the culmination of more than a decade-long effort to coerce online platforms to eliminate adult content.” Due to pressure from state attorneys general and Congress, Craigslist bent the knee in 2010, eliminating its adult services section. Backpage, however, was made of sterner stuff.

Writes Corn-Revere:

“Backpage.com was owned by newspapermen with a history of resisting abusive tactics . . . They successfully challenged state legislation targeting adult ads, blocked local law enforcement from issuing unconstitutional threats, and obtained dismissals of state prosecutions and civil suits.”

The reference is to Lacey and Larkin, the former owners of a national chain of alternative newsweeklies, who co-founded Backpage in 2004 as a rival to Craigslist, selling it in 2015.

During Lacey and Larkin’s ownership, everything Backpage did was lawyered to ensure the company was operating in good stead. And federal and state courts consistently agreed that the site was street legal. It employed terms of use similar to most interactive websites, and offers for illegal acts, like sex for money, were verboten.

Backpage cooperated with law enforcement, responding to subpoenas within 24 hours, testifying against sexual predators in court and winning plaudits from numerous law enforcement agencies, including the FBI.

It also maintained a multi-level filtering system, including computer and human monitors that “scanned posts for more than 26,000” forbidden terms, phrases, links and emails. Corn-Revere points out that “in April 2012, Backpage.com blocked or removed over 1,000,000 posts and reported 400” to the National Center for Missing and Exploited Children (NCMEC), the quasi-government clearinghouse for such reports.

Additionally, Corn-Revere notes that the much-ballyhooed Congressional investigation into Backpage pored over bankers boxes full of documents. But despite claims to the contrary, “officials found zero evidence to support allegations that Backpage.com was responsible for creating or posting ads or was involved in the business of prostitution.”

Regarding the government’s claim that Backpage’s monitoring system was intended to “sanitize” ads in order to “facilitate prostitution,” courts have rejected this premise more than once, including twice in California’s superior court, where two separate judges respectively dismissed pimping charges against Lacey and Larkin.

Uncle Sam Plays Nasty

This will be Lacey and Larkin’s second trip to the Ninth in an attempt to wrest their property and money from the government’s unwholesome grip. The seizures began in late March 2018, when the DOJ’s minions unleashed the first of several waves of seizure warrants issued by federal magistrates in California.

Yet Lacey and Larkin’s arrests and indictment took place in federal court in Phoenix, Arizona. Like the $1 million bonds each man had to pay to secure their release (in spite of probation reports citing their lack of criminal histories and recommending release without bail), the seizure of their assets in another state was intended to complicate their fight.

As longtime defense attorney and former Arizona State Bar president Michael Piccarreta told Front Page Confidential in April, it’s part of the prosecution’s plot to win at all costs.

“With the seized monies, it’s been nothing but gamesmanship from the beginning,” Piccarreta said of the federal prosecutors involved. “They’re doing everything they can to legally starve the defendants.”

Piccarreta was part of the case even before the indictments came down, representing one of Lacey and Larkin’s co-defendants for more than a year, until the feds seized assets set aside to pay his client’s legal bills, forcing him to withdraw.

The government did likewise to the firm Corn-Revere works for, Davis Wright Tremaine, taking money set aside for the defense. Prosecutors also unsuccessfully attempted to boot DWT from the defense for a non-existent conflict of interest.

But that’s how prosecutors in this case play: dirty.

When the defendants challenged the seizures on First Amendment grounds, the government requested a stay in the proceedings. Federal Judge R. Gary Klausner, located in the Central District of California, granted it, advising the defendants to take up their 1A concerns with the federal court in Phoenix. But the Phoenix court punted, leaving the defense in limbo.

So the defense appealed to the Ninth, which vacated the stay and ordered Klausner to address the unresolved First Amendment issues. On December 20, 2019, Klausner ruled against the defendants, agreeing with the prosecution that because the speech at issue — ads that once appeared on Backpage — are alleged to have been for illegal acts of prostitution, the First Amendment does not apply.

Klausner also found that the seizures were legal because the website had been shut down by the feds, and so the “flow of expressive materials” would not be stifled by the seizures.

The defense filed an immediate appeal, after which the government petitioned the court to dismiss the case for lack of jurisdiction, a tactic tried previously by the federal apparatchik in charge of the seizures, Assistant U.S. Attorney John Kucera.

But Kucera’s gambit failed again, rejected by a two-judge panel on March 30.

All that’s left now is high noon before Ninth Circuit, with a date still to come, and with freedom of speech and freedom of the press in the balance.

For more on Lacey and Larkin’ First Amendment fight, please read:
Prosecutors in Lacey/Larkin Case Jump the Shark in Their Most Obnoxious Pre-Trial Motion To Date
and
DOJ Attorneys Defied Court Orders and Repeatedly Violated Attorney-Client Privilege in Lacey/Larkin

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About Stephen Lemons

Stephen Lemons is an award-winning investigative journalist with more than 20 years of experience covering everything from government corruption to white-supremacist gangs. In addition to Front Page Confidential, his work has appeared in Phoenix New Times, the Los Angeles Times, Salon.com, and the Southern Poverty Law Center’s Intelligence Report magazine.

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