No, Feds Can't Force Backpage Founders to Give Up Longtime Lawyers, Rules Judge

The ruling is a major win for Backpage founders James Larkin and Michael Lacey, as well as a strike against government overreach.


Steven Lemons

After months of motions and other legal wrangling, a federal judge has ruled against U.S. prosecutors seeking to disqualify lawyers for Backpage's founders from defending them in court. The ruling represents a win for Michael Lacey and James Larkin in what has, thus far, been a "brutal" prosecution, as Larkin put it when I interviewed him in July.

Both Larkin and Lacey have been confined by ankle monitor to Maricopa County, Arizona, since their April arrest on charges of money laundering, conspiracy, and facilitating prostitution. The trial is not until January 2020.

Since their arrests, Lacey, Larkin, and the other former Backpage executives have been fighting off prosecutors' attempts to seize almost all of their money and property and to have their chosen counsel disqualified. The government argued that the disqualification was necessary since Lacey and Larkin's lawyers had also acted as corporate counsel for Backpage and its former CEO, Carl Ferrer.

Ferrer led Backpage operations since its 2004 founding, and purchased the company from Lacey and Larkin in 2015. He's now cooperating with the state—including agreeing to testify against his former bosses and colleagues—as part of a plea deal he accepted in April on behalf of himself and Backpage.

Prosecutors had argued that because some of Lacey and Larkin's longtime lawyers had once represented Ferrer, too, it was a conflict of interest for them to serve as Lacey and Larkin's defense counsel. But Lacey and Larkin find this explanation suspect. They suggest that the real reason the government was intervening here was because their lawyers had previously been successful in defending them against civil and criminal suits.

In an October 12 ruling, Judge Steven P. Logan sided with Lacey and Larkin on the lawyer issue.

Ferrer "expressly waived his right to seek disqualification" of lawyers from Henze Cook Murhpy (HCM) and Davis Wright Tremaine (DWT) during previous joint representation and defense agreements between Lacey, Larkin, and Ferrer, the judge noted. In these agreements, Ferrer "waived his right to seek disqualification of counsel in the event that he withdrew from either of the confidential agreements."

The "express terms" of these agreements "are fatal to the Government's argument for disqualification because the content of these agreements demonstrates that Ferrer waived his right to pursue disqualification," wrote Logan. It's clear "that the plain language of the agreement prevents Ferrer from seeking disqualification" or asserting any conflict of interest in this case.

"The Court is confident that allowing HCM and DWT to continue their participation in this case will not run afoul of the interests of justice," Logan concluded.

In a ruling this week, Logan also addressed the government's asset forfeiture attempts—and, in the process, revealed just how unscrupulous and hungry the feds are in this arena. Apparently, federal prosecutors have been making grabs for their assets in several courts simultaneously.

Bank accounts and property prosecutors are seeking to seize from Larkin and Lacey are already the "the subject of several civil seizure warrants issued by the U.S. District Court for the Central District of California," noted Logan. He said he would wait to rule on assets until after the California court issued its decision. If the ruling isn't favorable to the feds, prosecutors may refile their asset-forfeiture motion in the Arizona court within 14 days.

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  1. Can we just state one thing for the record…. it was a website.

    A website that allowed personal ads. That is all.

    We are talking about pure, unadulterated speech….. and not even their speech. Someone paid them to put an ad on their website. So they are like a newspaper or even a bulletin board. Just a location for posting messages. That’s it.

    But somehow we’ve gotten to the point where the content of messages posted by third parties is not only a crime, but the sort of crime that requires twisting justice and perverting the judicial system in order to utterly destroy the enemy.

    In fact, Backpage is technically pretty much identical to Hit and Run on Should STEVE SMITH start posting ads for personal rape services here, are Reason’s owners and editors suddenly criminals? One could certainly posit a situation where adult services providers decided en mass to use Huffpo or some other comments section to communicate with their customers. Once that became “known”, it would probably work pretty well. Are the feds going to prosecute HuffPo in that scenario?

    Is “we like sex workers” enough to demark a line between innocent website provider and criminal sex trafficking ring?

    1. >>>We are talking about pure, unadulterated speech


    2. This isn’t news. The National Socialist Workers Party called for this sort of criminal censorship in 1920, and 13 years later the author of that platform was making Christian Enabling Act speeches in the Reichstag. The only party with a contrary platform is the LP, but those spoiler votes are already chipping away at this last gasp of fascist collectivism.

  2. Three felonies a day, but if the prosecutors take a personal dislike to you they can turn that into a 164-count indictment. Or determine that procedures were followed and there was no intent to break the law if they do like you. The Law is like the Pirate’s Code, more what you call guidelines than actual rules.

  3. Goddamn, prosecutors are complete shitbags.

    1. And pussies too. They should’ve argued that counsel was party to the criminal conspiracy. Of course they would’ve risked their own law licenses if they couldn’t prove it. No guts, no glory (and elective office).

    2. Please stop insulting the….

      … shitbags.

  4. This would be a good article to point out to Dem-addled papers like the Austin Chronicle. For years they ran backpage ads and cried crocodile tears of guilt-ridden angst all the way to the bank–until the energy-legalizing Trumpistas relieved them of that horrible burden. Imagine their sobs if forced to realize the Libertarian Party–not the slimy looters they whine to–are the defenders of freedom, rights and Roe v. Wade and have been since 1972!

  5. And this “Sex workers returned to SF streets after shut down” SFGATE 10/17/2018

  6. “Sex workers returned to SF streets after shut down” SFGate October 17, 2018

  7. First thing I noticed.. trial dates January 2020? Whatever happened to that CONSTITUTIONAL RIGHT to a speedy trial? Imagine, if that long is “speedy”, what part of the twenty second century might find their Kafka case a hearing date?

    They’ve got ankle trackers and cannot leave their county of residence. I’ll wager they’ve also lost their right to arms for self defence as well. Once more, the bottomless money pit the Feds have is making the process the sentence. Even if they DO get off completely, and they SHOULD (or is that MUST?) da gummit will have given them a screwing worse than any of the “service providers” the Feds alledge had their business aided and abetted and promoted by these guys. Sheesh, CraigsList used to let such adverts into their postings, why are THESE guys so special?

    1. Craig’s list, Creative Loafing, The Atlanta Journal and Constitution, The New York Times……

      Personals have been around for a long time. If you needed to know what the coded language meant, you knew.

  8. When people are asked to use gut instinct to stop real but rare horrors, relying on racial stereotypes and other biases tends to rule.

    Is that why the cops pulled a gun on my friend the day I moved him and his babby mamma into my town. It’s strange how one of the other regulars at the Wellness Center died of a drug overdoes latter that night in the Wellness Center bathroom.

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