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Backpage Executives Escape Pimping Charges Kamala Harris Brought (Twice) Against Them

The state will continue to pursue money-laundering charges against Carl Ferrer, Michael Lacey, and James Larkin.

Hector Amezcua/ZUMA Press/NewscomHector Amezcua/ZUMA Press/NewscomThe California Superior Court of Sacramento County has granted a motion to dismiss state pimping charges against Backpage CEO Carl Ferrer and former controlling shareholders Michael Lacey and James Larkin.

But the men are still being prosecuted on money laundering charges, for profiting from online classified-ads authorities allege to facilitate prostitution.

The charges were brought in December by former California Attorney General (AG) Kamala Harris, now a U.S. senator, after the first case Harris brought against Backpage was rejected. Rather than appeal, Harris amended the charges slightly and filed them in another court.

Judge Lawrence G. Brown notes in an August 23 decision that Backpage leaders are now "being charged with, essentially, either investing money into [an] underlying criminal scheme, or conducting transaction with profits from the scheme." To make their case, state prosecutors (now under the leadership of AG Xavier Becerra) will have to show specific Backpage profits came solely from underlying criminal activity—in this case, the alleged facilitation of prostitution and sex trafficking.

"Regardless of whether [California prosecutors] will succeed in meeting their burden of proof, the theory and the charges under which they are proceeding appear to be valid under California law and adequately pled such that any defect does not bar prosecution," Brown wrote, acknowledging the state's criminal complaint was "not a model of clarity."

The court will let the money-laundering case against Ferrer, Lacey, and Larkin proceed except as it pertains to pimping. The judge granted a motion to dismiss the 11 pimping charges against Ferrer and conspiracy to commit pimping charge against all three men.

State Prosecutors Make Backpage's Case for Them

State prosecutors had argued that Backpage executives derived an income from prostitution—i.e., pimping—by accepting money for online "Escort" advertisements that resulted in prostitution occurring. Backpage ownership argued it accepted payment for legitimate services—i.e., running a publishing platform—and is not liable for any criminal activity that may have resulted from Escort ads (a null section as of January 2017).

With regard to the pimping charges, "the relevant question...is whether, and to what extent, Defendants' activity entitles them to protection of their First Amendment rights through the immunity provision" of the federal Communications Decency Act (CDA), Brown notes.

"Providing a forum for online publishing is a recognized legal purpose that is generally provided immunity under the CDA," he points out. "This immunity has been extended by the courts to apply to functions traditionally associated with publishing decisions, such as accepting payment for services and editing."

State prosecutors suggested it was not the forum but the content of the advertisement that was objectionable. "Yet, to hold [Backpage] responsible for the content of the advertisement would require holding a publisher liable as if he was the speaker of the content," Brown notes. "Contrary to the [state's] claim, doing so directly triggers, not defeats, the immunity provision of the CDA."

The state also argued (using the same arguments that failed the last time) that Backpage's actions went beyond publishing into content creation, which would mean CDA immunity could be revoked. But "in light of the People's acknowledgment that Backpage's edits would not change the user's intent, there can be no material contribution to the offensive content," writes Brown.

"Indeed, such actions generally fall within the scope of protected editorial functions," the decision continues.

Even if the edits or posting rules allow advertisers to use coded language, this is insufficient to render the website operator a content provider. The crucial distinction is between engaging in actions (traditional to publishers) that are necessary to the display of unwelcome and actionable content, and responsibility for what makes the displayed content illegal or actionable. ... Here, it is the third-party who is responsible for the illegal content of the advertisement.

Considering Case History

In dismissing the pimping charges against Backpage executives, Judge Brown brings up several interesting historical cases related to the definition of pimping which are instructive to this case. In the first, from 1913, a California court held that "a legitimate defense to pimping is that a prostitute supplied defendant money for any purpose other than being supported or maintained by the prostitution" (People v. Reitzke).

In 2006, a California court held that a "natural reading of the pimping statute does not apply to an individual who provides a legitimate professional service to a prostitute even if paid with proceeds earned from prostitution," as in such a case "the service provider derives support from his own services" (Allen v. Stratton).

And in the 2011 case People v. Grant, a state appellate court said it was important in pimping cases to distinguish between money derived directly from prostitution and money paid by a sex worker for goods or services rendered. "The statutory prohibition [on deriving support from someone else selling sexual services] does not preclude a person from accepting a known prostitute's funds gained from the prostitute's lawful activities or for purposes other than the [alleged pimp's] support and maintenance."

Credit Company "Trickery"?

The money laundering case against Backpage hangs on the state's assertion that Backpage created additional websites (EvilEmpire.com and BigCity.com) for the purpose of tricking payment processors and credit card companies into doing business with them. Backpage alleges that these websites, which syndicated Backpage content, were merely meant to draw more traffic to Backpage.com.

Most of the major credit-card companies were accepted on Backpage.com, meaning these companies already agreed, explicitly, to do business with the website's parent company, Backpage LLC. They only dropped out when threatened—illegally—by Illinois Sheriff Tom Dart. It's odd, to say the least, to suggest that Backpage executives would have needed "trickery" to get merchant accounts with these companies considering none of the payment processors or credit-card companies made any such complaint.

"Essentially, either Defendants did—or did not—materially represent to credit payment processors in a scheme to fraudulently obtain money from banks," writes Brown. "If Defendants did so, this may form the basis for a money laundering charge."

Will Congress Act—and Why?

As in previous cases, Backpage's immunity is predicated on Section 230 of the CDA, which is currently under fire from a group of U.S. senators (including Harris). The judge refers several times to the fact that Congress could make changes to the CDA. As such, "this ruling has potentially important consequences for the pending bills to amend Section 230," blogs law professor Eric Goldman.

Brown notes "a growing desire to hold online media accountable for their role in disseminating information leading to condemnable acts by third parties." As evidence, he points to a case "seeking to hold Facebook liable for allowing Hamas to use its platform to encourage terrorist attacks" and one "seeking to hold Twitter liable for providing ISIS an account to use for spreading extremist propaganda."

Since Facebook, Twitter, and Backpage all currently enjoy protection under Section 230, however, they are immune to such prosecutors.

"This immunity was provided by Congress," Brown states, and it can only be modified by Congress, "regardless of where Backpage floats on the tide of public opinion."

Lawmakers haven't said much about other sites in their discussions of the need to change Section 230. "Much of the rhetoric about the bills has specifically targeted and called out Backpage–and only Backpage," notes Goldman.

A key assumption for the bills is that Backpage needs to be crushed and existing law isn't getting the job done because of Section 230. As this ruling shows, existing law may in fact be sufficient to crush Backpage irrespective of Section 230. As a result, there is no need–and certainly no urgency–to rush through amendments to Section 230, with potentially major consequences for the entire Internet, while courts are still resolving the matter. (Indeed, that would be true even without this ruling because of the pending grand jury investigation into Backpage in Phoenix that may use the SAVE Act, the anti-Backpage law Congress just enacted in 2015).

However, it's possible that, despite the anti-Backpage rhetoric, the advocates supporting the pending bills aren't really targeting just Backpage but have larger objectives to undermine or eviscerate Section 230.

Goldman said he "expects this ruling will expose the advocates' true agendas."

Photo Credit: Hector Amezcua/ZUMA Press/Newscom

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  • Sports Reporter Charles Manson||

    So it *isn't* hard out there?

  • DajjaI||

    I would like to know if Reason has any pending charges against me. This has gotten kafkaesque. (Now I'm told that simply bringing up the issue is a bannable offense.)

  • Crusty Juggler||

    You're very important.

  • Sevo||

    DajjaI|8.31.17 @ 3:37PM|#
    "I would like to know if Reason has any pending charges against me."

    Why would anyone waste time with such a pathetic excuse for a human being?
    Fuck off.

  • Citizen X - #6||

    Katt Williams hardest hit.

  • Fist of Etiquette||

    To make their case, state prosecutors (now under the leadership of AG Xavier Becerra)...

    AG and future senator Xavier Becerra.

  • geo1113||

    Somebody has to replace Kamala when she becomes president.

  • Conchfritters||

    Harris will never be elected President. She won't even make it out of the primaries. All it will take is showing what a slut shaming bitch she really is. She is destined to a life of irrelevance in the senate, just like Barbara Boxer.

  • Ron||

    slut shaming is okay when your on the correct team Just ask Hillary

  • Alsø alsø wik||

    I'd like to think it's because voters realize they're being played by a marketing scheme. Obama was version 2.0 of Deval Patrick, Harris is version 3.0. Switching up the protagonist to be a female isn't enough of change at this point.

  • John C. Randolph||

    Kamala Harris has a clear motive: since she got her career started by being WIllie Brown's sugar-baby, she wants to make sure that long-term prostitutes don't face any competition from short-term prostitutes.

    -jcr

  • Sevo||

    "...former California Attorney General (AG) Kamala Harris, now a U.S. senator,..."

    No, the woman never got a vote from me for any position to which she has been unqualified, which is all of them.
    But I would like to offer apologies on the part of CA voters for electing this political scumbag to a national position; she started from sharing a bed with Willie Brown and ended up a national embarrassment:
    "Harris caught Willie Brown's eye in her 20s
    The first time she ever appears in a Nexis.com search of California news is March 22, 1994, when she was Assembly Speaker Willie Brown's date at his 60th birthday party. She was 30 years-plus younger. But she didn't just date Brown. She cashed in from knowing him:
    "Assembly Speaker Willie Brown, continuing his rush to hand out patronage jobs while he retains his powerful post, has given high-paying appointments to his former law associate and a former Alameda County prosecutor who is Brown's frequent companion."
    http://calwatchdog.com/2013/04.....ompliment/
    "Brown, exercising his power even as his speakership seems near an end, named attorney Kamala Harris to the California Medical Assistance Commission, a job that pays $72,000 a year.
    Cont'd.

  • Sevo||

    "Harris, a former deputy district attorney in Alameda County, was described by several people at the Capitol as Brown's girlfriend. In March, San Francisco Chronicle columnist Herb Caen called her 'the Speaker's new steady.' Harris declined to be interviewed Monday and Brown's spokeswoman did not return phone calls.

    "Harris accepted the appointment last week after serving six months as Brown's appointee to the Unemployment Insurance Appeals Board, which pays $97,088 a year."
    http://calwatchdog.com/2013/04.....ompliment/

    Not long ago, a prostitute who had arranged for Harris to speak regarding the legitimacy of sex work found she decided no to show up and wondered publicly 'whether she was embarrassed as being a political whore'?

  • Sevo||

    BTW, I'm sure that stuff wasn't sold so cheaply after she got the nod for Senate, and Willie is no longer getting any; he couldn't even get moi and wife moved from "his" table at a restaurant several weeks back.
    I wasn't going to get up.

  • 10mm||

  • Sevo||

    Yeah, she bailed on that.

  • sam89||

  • ||

    The ultimate counter attack, they bring up prostitution charges on Kamala Harris

  • Sevo||

    Well, Willie never, technically, paid her out of pocket, so the slime bag gets a pass.

  • Ron||

    When the state wants to fuck with you the state will always win, it may take a while but it will win even if it has to creat new laws to charge you with.

  • Alsø alsø wik||

    Slightly off-topic, but somewhat relevant: what exactly is the defining line between prostitution and porn? Does porn have to be published? Or just recorded?

    I'm a bit surprised that johns haven't figured out a way to sidestep solicitation charges by now. As far as I can tell, all that's required is an iPhone camera and you're free to pay anyone to do anything.

  • josh||

    Those brave men have given me hours of pleasure, and I wish them Godspeed!

    I feel as though I should've rephrased that...

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