The California Attorney General Wants to Imprison the Owners of Backpage.com and Curtail Internet Freedom

Jim Larkin (left) and Michael Lacey, co-founders of New Times.EXPAND
Jim Larkin (left) and Michael Lacey, co-founders of New Times.

If the televised images of Michael Lacey, Jim Larkin, and Carl Ferrer caged and wearing orange jumpsuits in a California courtroom, fighting for the right to be released on bail after spending several days last month in a Sacramento jail, didn't send a chill up your spine, they should have.

That's because the charges these men face regarding the online-classified-ad giant Backpage.com — one felony count of conspiring to pimp for each of the three men, plus nine felony counts of pimping for Ferrer — are the product of a prosecutorial overreach that might seem ridiculous if it didn't have such serious ramifications for defendants, for the internet as we know it, and for the First Amendment.

Larkin and Lacey, the co-founders and former owners of the Phoenix New Times and the chain of weeklies to which it belongs, traveled to Sacramento to turn themselves in just days after the October 6 arrest of Ferrer in Houston, and the raid on the Backpage offices in Dallas by three dozen members of Texas Attorney General Ken Paxton's Law Enforcement Unit.

Paxton was working in concert with California Attorney General Kamala Harris, who issued a press release that same day trumpeting Ferrer's arrest on allegations brought by her office that he, along with Lacey and Larkin, had conspired to make Backpage "the world's top online brothel."

According to the charging documents, Lacey and Larkin sold Backpage in 2014 to a Dutch company formed by Ferrer, who continued as CEO. Still, Harris' press release describes the two former owners as the "controlling shareholders" in the enterprise.

Warrants were issued for Lacey's and Larkin's arrests on the curious legal theory that California's pimping laws, which make it illegal to knowingly derive "support or maintenance" from the earnings of a prostitute, can be applied so broadly as to hold criminally liable the owners of a website that allows users to post advertisements for everything from kitchen implements and pet-sitters to transgender escorts and foot-worship fetishists.

The fees paid to Backpage by the nine alleged victims in the case total $79.60. The prosecution makes no claim that the accused knew the people who placed the ads or even had seen the ads themselves.

Five of the victims were minors. One, identified as A.C., told an investigator that she'd used a prepaid credit card to buy her ad on Backpage. Asked if she had difficulty doing so as 16-year-old, she said, "Well, no, how are they supposed to know I'm underage?"

Obviously, the Backpage Three don't fit the definition of pimps in the traditional sense of toughs who hold others in thrall via mental or physical intimidation. And Harris' legal rationale for charging the men in this manner is so elastic that it could be applied to the owner of a doughnut shop that caters to the denizens of a red-light district, or to the store that sold A.C. that prepaid credit card.

Harris, who at the time of the arrests was running as a Democrat to replace U.S. Senator Barbara Boxer and has since been elected to that post by an overwhelming margin, argued to keep the three men in custody, contending that any money they might use to meet bail would be tainted by the illegality of their venture.

A judge disagreed. Ferrer was released on a $500,000 bond, Lacey and Larkin on $250,000 apiece.

So far, the three men have not entered pleas in the case, but Lacey and Larkin issued a scathing statement, contending that Harris was well aware she possessed "no legal authority" to bring charges.

As this issue goes to press, the defendants are due back in Sacramento Superior Court for a November 16 hearing before Judge Michael G. Bowman. Their attorneys will seek to have the charges dismissed on the grounds that Harris' prosecution violates their First Amendment rights as publishers and that it is impermissible under Section 230 of the federal Communications Decency Act (CDA).

Bowman might issue a decision on the day of the hearing. If he doesn't dismiss the charges, the case will wend its way to trial. If convicted, Lacey and Larkin face prison sentences of up to six years, and Ferrer is looking at up to 21 years.

* * *

Kamala Harris' bogus portrayal of Backpage.com as an online pop-up whorehouse conveniently ignores historical fact. During the 1980s and '90s, print publications derived a large chunk of their revenue from classified ads. Then along came Craigslist, which took classifieds online, did away with charging fees for much of the content, and essentially ate the competition's lunch. In response, newspapers had to migrate their classified systems online. That included adult advertising, which had long been a component of print's client base. New Times called its online classified listings Backpage as a marketing nod to the publication's back cover, which for years had served as prime real estate for small-print solicitations.

A decade later, Craigslist capitulated to legal pressure to ban categories such as escort services, but Lacey and Larkin chose to assert their right to publish. Ultimately, that decision to stand behind the First Amendment led the partners to relinquish ownership of the newspaper chain they'd built from Phoenix New Times up.

Described by one writer as "the fairy godmother of the Internet," Section 230 of the Communications Decency Act was passed by Congress in 1996 with the express intent, in the words of the statute, to preserve "the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation."

To this end, Section 230 shields the proprietors of interactive online sites from civil and criminal liability, except in certain defined circumstances, including violations of federal criminal law. Otherwise, the statute states, "No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section."

In practice, Section 230 prevents Twitter from being sued for a libelous statement tweeted out by one of its millions of users. It prevents Facebook from being prosecuted for aiding and abetting, say, a stalker or a con man who uses the social-networking site to victimize others. And it keeps ordinary bloggers free from any civil or criminal liability resulting from a commenter posting something untoward on their blog without their knowledge, such as revenge- or kiddie-porn.

This is why so many legal observers have taken issue with Harris' crusade against Backpage, which operates in more than 800 cities worldwide and reportedly generates hundreds of millions of dollars in revenue each year, the lion's share of it from adult ads.

In a commentary on the Backpage arrests for Bloomberg.com, Harvard Law School professor Noah Feldman called the attorney general's criminal complaint "a fairly astonishing document" and lambasted the legal theory underpinning it as a dangerous one that could outlaw "any publication that sells ads."

Which is pretty much every publication on the planet.

Eric Goldman, a professor at Santa Clara University School of Law and director of that school's High Tech Law Institute, has closely followed Backpage's legal run-ins on his Technology & Marketing Law Blog. In an interview for this column, he warns that regardless of how the current case plays out, it already has had a chilling effect on internet publishers.

Back in 2013, Goldman notes, Harris was one of 47 state attorneys general who asked Congress to amend the Section 230 to allow local prosecutors to take on Backpage. "Is it true that Section 230 pre-empted [Harris] from bringing charges, or not?" he asks rhetorically. "Because in 2013 she said yes, but in 2016 she seems to think no."

On his blog, Goldman runs down a list of winners and losers when it comes to online services that have used Section 230 as defense against legal actions. Generally, Section 230 seems to be under attack from all sides, with the courts ruling against high rollers like Airbnb, Amazon, and Google.

"Section 230 is having an extremely rocky year," Goldman affirms. "I'm not sure how well it's going to do in the future, given the large and substantial fissures that have been exposed in the immunity."

Backpage has used Section 230 to fend off countless civil claims. The company successfully sued the Cook County (Chicago) sheriff for intimidating credit-card companies into not doing business with Backpage, and had three state laws aimed at undermining its Section 230 protection thrown out.

As Politico reported last month, Backpage may have helped its cause when it lost a suit challenging the 2015 federal Stop Advertising Victims of Exploitation Act (SAVE), a law designed to carve out an exception to Section 230 and crack down on sex ads online.

Though the lawsuit was tossed by a federal court, the judge's decision in the case made clear that in order to be prosecuted under the law, a person must knowingly have accepted sex ads involving minors or those who suffer from "force, fraud or coercion."

The SAVE Act has nothing directly to do with Harris' prosecution of Lacey, Larkin, and Ferrer under the California penal code. But the knowledge that one is committing an unlawful act — a legal concept known as scienter — is central to the attorney general's case.

For instance, in an affidavit supporting Harris' criminal complaint, an investigator for her office states that it was "plain" that the ads for escorts on Backpage were for prostitution. But so far the courts have not allowed prosecutors to leap to such an assumption.

Writing in favor of Backpage in a 2015 case before the Seventh U.S. Circuit Court of Appeals, the renowned federal judge Richard Posner proffered a list of erotic activities that are neither criminal nor violent nor exploitive.

With respect to, say, dominatrices and fetishists, Posner found that "[i]t's not obvious that such conduct endangers women or children or violates any laws, including laws against prostitution."

One can legally be an escort in many states, including Arizona. So advertising something as general as a "sweet morning treat" or "ultimate companionship," as some do on Backpage, is not in and of itself illegal.

None of that denies the reality of human trafficking and child prostitution. But advertisements for children and others working against their will are not Backpage's stock in trade.

The company insists that out of the tens of millions of ads users have posted on its site, law enforcement can point to only a small handful of apparent victims. And Backpage claims that it has always promptly answered law-enforcement subpoenas seeking information about the poster of any particular ad.

I spoke with a former Phoenix vice cop, who described to me how local police made extensive use of Backpage — including subpoenas — to bust prostitutes. The ex-cop, who asked that his name not be published, says he found that most prostitutes he contacted via Backpage did not have pimps; they were working for themselves.

"We were able to track [prostitutes] and try to get them off the streets and do good things," he says.

He believes that in cases involving minors, Backpage's high profile can be an asset to law enforcement.

"You take away that, and these people are going to be invisible," he says, predicting that at best the ads will eventually migrate to sites that are more difficult to keep tabs on.

* * *

Lacey and Larkin were arrested nine years ago on trumped-up charges arising out of a vendetta being pursued against this paper by Sheriff Joe Arpaio. At that time, near-universal condemnation of the banana republic-like move caused the county prosecutor, who had been in on the plot, to drop all charges.

In 2012, Lacey and Larkin sold the Village Voice Media chain (now Voice Media Group) to longtime company executives. Still, their recent arrest seems like history repeating itself, only with a liberal Democrat targeting them instead of an autocratic Republican sheriff.

In her response to the defendants' motion for dismissal, Harris argues that her prosecution of three website publishers does not implicate the First Amendment. The charges, she asserts, involve "the defendants' conduct ... not the words used in any speech."

It's a contention as absurd as the premise for the charges. In a reply, attorneys for the defense labeled that argument "illogical sophistry," pointing out that the prosecution is entirely based on Backpage publishing the nine ads in question and accepting payment for same.

And so the battle is joined, and the Internet as we know it might hang in the balance. Like Arpaio before her, Kamala Harris got her perp walk out of Lacey and Larkin. And as with the 2007 arrests of the two men, which resulted in a lawsuit and a $3.75 million settlement forked over by Maricopa County, the State of California ultimately may have to pay out the proverbial schnozzola for the pair's four-day jail stay.

Full disclosure: I am far from an unbiased observer. Michael Lacey hired me as a staff writer 13 years ago, giving me the same opportunity he gave countless others before me: to make a living doing the sort of bare-knuckle journalism that he and Larkin branded as their own when they founded Phoenix New Times more than 40 years ago.

I'm also compelled to address another issue: Lacey's decision to give away $5,000 checks to hundreds of former writers and editors who worked at the papers he co-owned. Some have called Lacey's motive into question, noting that the checks began to appear in mailboxes in the months immediately preceding his arrest.

Was he trying to curry favor with his ex-employees on his way to the hoosegow? To disperse his fortune before the authorities got their hands on it?

Scottsdale attorney John Becker, whose estate-planning firm, Becker & House, Lacey hired to coordinate the giveaway, tells me no. Discussions about the disbursement began as far back as October 2014, he says, and the checks are "purely a thank you" — a tangible token of respect for the journalists who contributed to his life's work.

I've seen e-mails dated March and June 2015 back and forth from Lacey, discussing the distribution.

Even if he had a crystal ball tell him in October 2014 that he'd be arrested two years later, what does he have to gain from his largesse? (There's no tax benefit: Because he designated the checks as gifts, it's Lacey, not the recipient, who pays taxes on the money.)

The whole thing calls to mind that old black-and-white TV series The Millionaire, wherein unseen fictional moneybags John Beresford Tipton Jr. had his male secretary dole out a $1 million check each week to an unsuspecting individual. (Well, except for the dollar amount involved.)

And yes, I received one of those checks. Does it color my view of this case? Believe what you will, but I say no.

Lacey hasn't been my boss for going on four years now. And Harris' crusade incenses me in much the same way that Arpaio's did in 2007, when plainclothes deputies hauled off Lacey and Larkin in the middle of the night. Perhaps Harris pisses me off more, what with the medieval cage she hauled out in Sacramento.

In the end, there are some things that, as a writer and a journalist, you simply do not let pass, not least because they affect your own right to operate under the First Amendment.

The prosecution of the Backpage Three is one of those things.

Read the defendants' motion to dismiss charges against Lacey, Larkin, and Ferrer:

Read the California attorney general's opposition to the defendants' motion to dismiss:

Read the defendants' reply to the California attorney general's opposition:


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