Some Comments on the CA/TX Attorneys’ General Prosecution of Backpage’s Executives

By now I’m sure you’ve heard that California Attorney General Kamala Harris is prosecuting three Backpage executives for pimping/conspiracy to pimp. This is the latest–and perhaps last–development in a decade-long effort by legislators, state AGs and local prosecutors to shut down online adult classified ads, first on Craigslist and then on Backpage. I have three main questions:

Why “Pimping”? The pimping charge is a head-scratcher. A “pimping” crime requires the defendant to “derive support and maintenance” from a prostitute’s activities. So the prosecutors appear to be treat classified ad fees as “support and maintenance” from prostitution. Where does this definition of “support and maintenance” end? Many prostitutes set up Facebook pages to promote their services, and Facebook sells ads on those pages. Does that mean Facebook is deriving “support and maintenance” from prostitution such that Facebook’s executives also could be prosecuted as pimps?

This theory raises some obvious First Amendment problems. Backpage’s only “support” of prostitution is the publication of advertising. Criminalizing publication implicates both free speech and press issues. Consider an analogy to the cases against social media sites for providing “material support to known terrorists” by allowing terrorists to publish content. I don’t see how such lawsuits can be squared with freedom of the press–in addition to the other legal deficiencies of those cases. See Fields v. Twitter.

Also note the indirect parallels to the anti-Airbnb statutes like San Francisco’s, which hold Airbnb liable for accepting money for illegal listings. Stitching all of these issues together, it’s clear where the anti-Internet regulatory impulses are focused: treating online dollars as criminally tainted. If this prosecution and the San Francisco statute both succeed, the roadmap for future regulation of the Internet is clear.

Why Now? The timing of this prosecution baffles me. If prosecutors think accepting paid classified ads from prostitutes is pimping, why didn’t they prosecute Craigslist (or its executives) for pimping nearly a decade ago? The crime of pimping has been on the books, and available to prosecutors, the entire time. Why is it being invoked only now? Over the years, prosecutors have tried a variety of wacky legal theories (remember Cook County sheriff Dart suing Craigslist for “public nuisance”?) and even enacted new statutes specifically designed to target Backpage (including, most recently, last year’s federal SAVE Act). If pimping is really the right crime for these facts, then it seems like all of the prior efforts were a waste of energy and taxpayer money–and time, as sex trafficking created new victims every day. But if pimping isn’t the right crime for these facts, this could just be a desperation play, i.e., nothing else worked, so plasticize the boundaries of a crime that wasn’t designed for this purpose.

I’ve been trying to think of other things that have changed in the last decade that would cause the prosecutors to pursue the pimping angle now. Some possibilities:

* Kamala Harris is seeking a higher office and this prosecution generated a new press event highlighting one of her key messages. As highlighted by this prosecution, Harris’ track record on technology issues is checkered, and I will be taking that into account when casting my vote.
* Backpage has made material changes to its services over the years, including a recent change of ownership, the parallel prostitution-advertising sites discussed in the complaint, and other evidence gathered in 3 years of the AGs’ investigations. I don’t think any of these changes make a big difference to the pimping charge, but maybe the AG’s offices see it differently.
* Recent Section 230 jurisprudence. More on that in a moment.

As for timing, the SAVE Act was recently passed with the sole purpose of squashing Backpage. If pimping was already available to shut down Backpage, why did Congress need to pass the SAVE Act? And given its new availability, why doesn’t the SAVE Act form the basis of regulators’ latest anti-Backpage move?

What about Section 230? I hate to be Chicken Little, but I think we’ll look back at 2016 as the year Section 230 finally fell apart. It still works well for certain paradigms, but the immunity’s edges have become so rough that the exceptions are beginning to swallow up the rule. To wit: Section 230 apparently no longer forces local prosecutors to distinguish between the executives of an online UGC classified ads site and a garden-variety street hoodlum.

We know the state attorneys’ general felt that Section 230 prohibited a prosecution of Backpage because they told Congress so in 2013. At the time, exasperated by their seeming inability to prosecute Backpage, 47 AGs sent a letter to Congress seeking an amendment to Section 230 that would allow both state and federal criminal prosecutions. That was a spectacularly bad proposal for reasons I explained at the time, but fortunately Congress ignored their letter (I never heard a Congressional peep in response, formally or informally). But if the AGs felt Section 230 stopped them cold in 2013, why do two AGs feel differently in 2016?

Three recent Section 230 rulings stand out to me as possible bases why the AGs might now think that they can now get around Section 230:

1) People v. Bollaert, 2016 WL 3536550 (Cal. App. Ct. June 28, 2016). I didn’t get a chance to blog this case previously. It’s a California AG’s office prosecution against a revenge porn website operator for identity theft and extortion. Because the third parties submitted pornography for publication, the operator asserted a Section 230 defense, which the court flatly rejects. The court expressly admits that it didn’t need to discuss Section 230 at all (“Under section 530.5, subdivision (f), Bollaert’s status as an interactive computer service or access software provider is irrelevant if Bollaert acted with the intent to defraud. Thus, the jury’s finding that Bollaert acted with the intent to defraud renders it unnecessary for us to proceed to the question of CDA immunity”). Yet the court went ahead and laid down some anti-Section 230 dicta-garbage nevertheless. Sigh.

I think this is the key line from the opinion:

Bollaert’s design and operation of—which required users who wished to use the Web site to provide content that violated other persons’ privacy—does not entitle him to statutory immunity under the CDA.

Note the obvious conflict with the uncited Doe v. Backpage ruling, which said that “features that are part and parcel of the overall design and operation of the website” were editorial choices protected by Section 230. The Bollaert court continued:

Bollaert created so that it forced users to answer a series of questions with the damaging content in order to create an account and post photographs. That content—full names, locations, and Facebook links, as well as the nude photographs themselves—exposed the victims’ personal identifying information and violated their privacy rights. As in Roommates, but unlike Carafano or Zeran, Bollaert’s Web site was “designed to solicit” (Roommates, supra, 521 F.3d at p. 1170, italics added) content that was unlawful, demonstrating that Bollaert’s actions were not neutral, but rather materially contributed to the illegality of the content and the privacy invasions suffered by the victims. In that way, he developed in part the content, taking him outside the scope of CDA immunity.

I’ve repeatedly discussed the incoherence of discussing website “neutrality” because every website necessarily has an editorial policy, and that is irreconcilable with “neutrality.”

It’s easy to see why the California AG’s office might think the Bollaert case helps its prosecution. After all, the AGs can craft a story that, similar to Bollaert’s revenge porn operation, Backpage was “designed and operated” to gather and disseminate illegal prostitution ads. We knew the Bollaert ruling was trouble when it came out, and this prosecution might be the first of many to apply the Bollaert precedent expansively.

[Two other notes about how much I dislike the court’s Bollaert opinion: In discussing the identity theft charge, the opinion favorably cites the In re Rolando S. ruling–always a red flag. And the opinion dubiously distinguished the Levitt v. Yelp extortion ruling because the court circularly says Bollaert “did not have a lawful right to collect a fee to remove the victims’ personal information.”]

2) FTC v. LeadClick. There is a lot for plaintiffs to embrace in that opinion, including how LeadClick was liable for content it never drafted or published.

3) J.S. v. Village Voice. This is Backpage’s most prominent courtroom loss, so I imagine the state AGs found it incredibly interesting. The court merely rejected Backpage’s motion to dismiss, so the opinion did not provide a final resolution on the merits. Nevertheless, the court’s mangling of the Section 230 defense (in part making another mangling of the “neutrality” concept) will almost certainly appear in the state AGs’ filings.

I cherrypicked these three rulings out of the dozen-plus bad Section 230 defense losses in the past year or so. Collectively, I can see why the state AGs might think the Section 230 tide has turned in their favor, at least regarding Backpage. As a result, unlike other commentators, the growing anti-Section 230 precedent makes me less confident that the Backpage executives have a solid Section 230 defense.

One twist: the prosecution is against the executives as individuals, not Backpage as the corporate entity. I don’t think this should make a difference to the Section 230 analysis (if anything, it might strengthen the defense because the causal connection is even more tenuous) but I’ll be interested to see how the AGs’ briefs address this issue.

The Broader Implications. From a business community standpoint, prosecuting Backpage’s executives as individuals is a nuclear option. Entrepreneurship inherently involves great risks to your capital; but prosecutions like this raise entrepreneurs’ fears that they are also risking their liberty. We’ve seen how this dynamic chills entrepreneurship in Europe, when German prosecutors went after Compuserve executive for the availability of child porn on the network and Italian prosecutors went after Google executives because of a mean video on YouTube. In light of those prosecutions, what entrepreneur thinks it’s a good to start up a user-generated content website? Unfortunately, the California and Texas AGs are sending the same messages to entrepreneurs in California, the world’s start-up capital and the economic engine driving the entire US economy. Whoa.

For more on the troubling implications of unleashing state and local prosecutors from Section 230, see my 2013 article, The Implications of Excluding State Crimes from 47 U.S.C. §230’s Immunity.

While the individual executives are now fighting for their lives, the stakes are also high for Backpage. I think the odds of Backpage successfully surviving the prosecution are low. Companies rarely recover from such a crushing development to their leadership, even if the executives eventually defeat the prosecution. So this prosecution may finally succeed in driving Backpage out of the market, irrespective of its legal merits. Still, anyone who thinks Backpage’s demise, or the conviction of its executives, will make any difference in the quantity of online prostitution ads is delusional. The ads will scatter to various corners of the Internet, and Backpage’s disappearance will not cause prostitution ads to simply disappear.

Case library:

* Trial court’s final ruling granting the demurrer
* California’s Supplemental Brief in Opposition to Defendants’ Demurrer to Felony Complaint and defendants’ response
* Trial court’s tentative ruling dismissing the charges
* Reply to the opposition to the demurrer
* California’s opposition to the demurrer
* Demurrer, statement of Lacey and Larkin, and letter to AG Harris
* Criminal Complaint
* Declaration in support of arrest warrant and warrant
* Press Release, Attorney General Kamala D. Harris Announces Criminal Charges Against Senior Corporate Officers of for Profiting from Prostitution and Arrest of Carl Ferrer, CEO
* Press Release, AG Paxton: Arrest of CEO Shows Texas Doesn’t Tolerate Human Trafficking

Prior posts on Craigslist/Backpage

* Big Win For Free Speech Online In Backpage Lawsuit
* Backpage Gets Bummer Section 230 Ruling in Washington Supreme Court–J.S. v. Village Voice
* Backpage v. Cooper
* Backpage Gets Important 47 USC 230 Win Against Washington Law Trying to Combat Online Prostitution Ads
* Backpage Gets TRO Against Washington Law Attempting to Bypass Section 230
* Backpage Gets 47 USC 230 Defense for Prostitution Ads–M.A. v. Village Voice
* Craigslist Isn’t Liable for Erotic Services Ads–Dart v. Craigslist
* Cook County Sheriff Sues Craigslist for Erotic Services Category

See also

* Online Marketplaces Facilitating Gun Sales Don’t Kill People. People Kill People
* ‘Silk Road’ Ruling Will Hurt Online Commerce