WASHINGTON, D.C. – Among the many comments on the proposed revisions to the 2257 regulations was one from the firm of Kelley Drye Collier & Shannon, which argues not that the regs violate adult producers First and Fifth Amendment rights, but that they fail to comply with the Regulatory Flexibility Act (RFA).
The report was commissioned by the Free Speech Coalition, as part of its ongoing fight to protect the adult industry – an industry composed entirely of what the government considers to be "small businesses" – from onerous and possibly unconstitutional legislation.
The RFA is a Carter-era law which is "designed to ensure informed consideration and fair treatment of small entities, including small businesses, governmental jurisdictions, and non-profit organizations, in agency rulemaking processes," according to the Kelley Drye report.
Moreover, according to a First Circuit decision in 1997, the RFA requires an agency like the U.S. Department of Justice (DOJ) to "mull[] other options in good faith, and s[eek] to strike the best available balance between [statutory] goals and the legitimate concerns of the regulated community."
That need to "strike the best available balance" was echoed in a 2002 Executive Order issued by President Bush, which required all federal agencies to develop "written procedures and policies ... to ensure that the potential impacts of agencies draft rules on small businesses are properly considered during the rulemaking process."
And indeed, the Justice Department claims, in statements accompanying its latest attempt to revise the 2257 regulations, that it had "drafted the rule to minimize its effect on small businesses while meeting its intended objectives," and that "[b]ased upon the preliminary information available to the Department through past investigations and enforcement actions involving the affected industry, the Department is unable to state with certainty that this rule, if promulgated as a final rule, will not have any effect on small businesses."
The "Regulatory Procedures" section of the 2007 proposed regs then goes on to claim that establishing the identity of every performer involved in sexually explicit content "is critical to determining and assuring that no performer is a minor." However, of the 22 2257 inspections conducted so far, of both large and small adult production companies, the FBI has turned up no evidence of any minors having been involved in those productions.
Nonetheless, the new proposed 2257 regulations include a statement that the Justice Department "requests affected small businesses to estimate what these regulations will cost as a percentage of their total revenues in order to enable the Department to ensure that small businesses are not unduly burdened," and Free Speech Coalition in fact commissioned just such a study, from Georgetown Economic Services, which also has now been submitted to the Justice Department.
However, the DOJ itself appears to have performed no such studies regarding the costs to the industry of the proposed 2257 regulations, and according to the Kelley Drye report, "the Department must take a step back from proceeding directly from a proposed to final rule," and that it may not proceed to such final rule "based on such flawed threshold analyses."
"In order to comply with the law," the report concludes, "the Department must 'engage in a careful and meaningful study of the problem from the beginning,'" and must "undertake the kinds of information-gathering, industry out-reach, and alternatives analyses required by the RFA and applicable compliance guidance, including the Department's own, as opposed to opting to pursue 'an insular approach designed to block further investigation and public scrutiny'," all as required by the Justice Department's own guidelines on the subject.
Those guidelines require the DOJ to perform its own investigation into the costs of regulating the industry through 2257, and does not permit it, as it has attempted to do through the above-quoted statement in the proposed new regs, to shift the burden of cost estimation onto the industry itself.
"This report is just devastating to the government," opined Jeffrey Douglas, chair of the Free Speech Coalition board. "The Justice Department has utterly failed to do what it is required to do, which is to do everything possible to ameliorate the economic impact of these regulations on small businesses."
"The Department's obligation is to go back, start from scratch, open up dialog with the adult industry in a half a dozen different sectors to figure out what the impact of the new regulations are," Douglas continued, "and they are obliged to use the least-restrictive alternative in each case."
"DOJ now has essentially two options," Douglas concluded. "One is to go back to the drawing board and start this dialog that hasn't yet existed, which will easily take them beyond the current administration, or blow it off and give a trial court good reason to send it back to them, irrespective of any of the First Amendment or other constitutional issues."
