Analysis: The New 2257A Regs

WASHINGTON, D.C. - Although the Adam Walsh Act, which required the creation of a recordkeeping and labeling system for simulated sexually explicit conduct, allows mainstream producers to avoid all that fuss and bother (and expense) by simply filing a statement with the Attorney General - it's Sec. 503(h)(1) of the Act - one has actually to read the new proposed 2257A regulations to understand how far up Hollywood's ass the Department of Justice (DOJ) (and Congress) is willing to climb.

According to the "discussion" preceding the recently released 2257A regulations, in order to qualify for a recordkeeping and labeling exemption (can't have America's moms and dads worrying about a new label incorporated into the box art for, say, the latest Disney offering!), all a mainstream producer has to do  is produce something that will get played on radio or broadcast TV or some other medium subject to FCC regulations OR is sold commercially in stores and on Websites, not market it in a way that people will think it's child porn, and keep federal and state tax and labor info on its performers.

Now, if you're thinking, "Hell, I do all that stuff; why can't I just send a letter to the Attorney General certifying that I do and save the hundreds of thousands of dollars and the terabytes of storage I have to waste on 2257 recordkeeping?", you've forgotten one of the primary precepts of the Republican administration, Congress and Justice Department: Adult producers are, at best, second-class citizens, and at worst, Minions of Satan®.

"I do not see any basis for distinguishing those who can avail themselves of the Subsection (h) safe harbor, the exemption certificate, other than discrimination on the basis of content or discrimination on the basis of speaker," said First Amendment attorney Reed Lee.

Nowhere is this more evident than in the way the 2257A regs treat Hollywood production companies that shoot overseas or import foreign-made productions.

"The Department has crafted a certification regime ... that implements the safe harbor in such as way as to permit such producers, in accordance with the statute, to be subject to lesser record-keeping burdens than those in part 75,  while still protecting children from sexual exploitation," the "discussion" says.

But are children still "protected"?

"In the case of a certification by a foreign entity," the new regs read, "the foreign entity, which may be unlikely to collect and maintain information in accordance with United States federal and state tax and other laws, may certify that it maintains the required information in accordance with their foreign equivalents."

Ah, well, no problem then! Just because a "foreign entity" may do business in a country that has lax (or no) tax laws, and may not issue driver's licenses with photos on them, and whose government may be so corrupt that passports get sold out the back door as quickly as through the front, that's no reason to worry that foreign kids may be being sexually exploited in imported productions! No siree! After all, Hollywood, unlike those demonic adult producers, can be trusted!

In fact, mainstream producers are so trustworthy that for foreign-made "visual depictions of simulated sexually explicit conduct only," when they file their exemption letter with the Attorney General, all they need to do is to state (no affidavit required!) that either the foreign producer maintains records required by 2257A and has supplied them to the American importer, or the foreign producer has its own exemption certificate filed with the Attorney General ... or the American producer has "taken reasonable steps to confirm that the performers are not minors"!!! [Emphasis added]

What the fuck?!?!? "Reasonable steps"??? Do they mean like any non-senile adult producer would do, in light of the fact that if he/she shot a minor engaged in sexually explicit conduct, he/she could wind up in prison for five years or more? That kind of "reasonable"?

But wait! It gets even better:

"There may be cases where a U.S. entity acquires foreign-produced matter and cannot certify the information above," the "discussion" says. "In such a case, the U.S. entity would not be able to produce the matter in the United States.  Denying the market in the United States access to a large amount of foreign-produced matter, however, could be construed as a burden on American citizens' First Amendment right to free expression. At the same time, the Department cannot risk permitting either foreign children to be exploited in the visual depictions produced for the U.S. market or evasion of the statute by unscrupulous  U.S. producers." [Emphasis added]

"Therefore, U.S. entities making the certification may certify that to the extent that they have acquired visual depictions or matter containing visual depictions of simulated sexually explicit conduct from foreign entities and to the extent that the primary foreign producer does not either maintain the records required by the statute or provide a certification to the Attorney General itself, the entity making the certification has made reasonable efforts to ensure that no performer in any such foreign visual depiction is a minor."

There's that "reasonable" again! But sadly, "The same process will not be available for visual depictions of lascivious exhibition acquired from foreign entities" because "[t]he risks of exploitation of children in such visual  depictions and the risk of evasion of the record-keeping requirements are too great."

Yeah, like adult producers are constantly suspected of doing!

By the way, the Justice Department rejected a couple of definitions of "simulated sexually explicit conduct" used in some state laws because those definitions, "which require the actual depiction of nudity, are overly restrictive in that a child may be exploited in the production of a visual depiction of simulated sexually explicit conduct even if no nudity is present in the final  version of the visual depiction. The producer of the depiction may arrange the camera or the body positions to avoid depicting uncovered genitals, breasts, or buttocks yet still cause harm to the child by having him or her otherwise realistically appear to be engaging in sexually explicit conduct."

Uh-oh; maybe some Hollywood producers aren't so trustworthy!

But don't worry, Hollywood: There's hope!

"The Department notes, however, that Congress clearly considered non-compliance with record-keeping requirements concerning visual depictions of simulated sexually explicit conduct (under section 2257A) to be a less serious crime than non-compliance with analogous requirements for visual depictions of actual sexually explicit conduct (under section 2257), as exemplified by the misdemeanor penalty for violation of the former section versus the felony penalty for violation of the latter section."

Yeah; "God" forbid a Hollywood producer should spend one friggin' hour in jail for not having kept his/her records properly!

But damnit, "The identity of every performer is critical to determining and assuring that no performer is a minor" because "children often are forced to engage involuntarily in sexually explicit conduct."

Um ... no. At least, not in the recognized adult entertainment industry, which has identified and expunged the four underage performers who infiltrated the industry, starting with the Traci Lords incident in '86.

"Congress has never made one single finding directly supporting section 2257," Lee noted, "and the Meese Commission, which originally proposed what became section 2257 said in its report, which came out in July of 1986, that as a result of the first round of federal child pornography laws and the child pornography laws that came in at the state level in the '70s, there was essentially no more child pornography being produced in what we would call a commercial way. The Meese Commission recognized that it had been driven underground by that point. So in terms of the recordkeeping requirement imposed on commercial producers that were above-ground, there was every reason for people to know from the get-go that it was targeting the wrong people. And the only rational reason that you would want to target the wrong people with a burdensome recordkeeping is that you don't like them or you don't like what they have to say, and that's not a constitutionally permissible reason."

The 2257A posting in the Federal Register describes "five enumerated elements" with which a potential exemptee must comply, which include (1) "regularly and in the normal course of business collects and maintains" (2) "individually identifiable information" (3) "regarding all performers, including minor performers employed by [the entity]" (4) "pursuant to Federal and State tax, labor, and other laws, labor agreements, or otherwise pursuant to industry standards" (5) "where such information includes the name, address, and date of birth of the performer."

Of course, as noted above, that doesn't necessarily apply to imported films and TV shows, but for the moment, let's focus on "regularly and in the normal course of business collects and maintains." In the "discussion," the Justice Department says that that phrase means "any business practice(s) that ensure that the producer confirms the identity and age of employees who perform in visual depictions of sexually explicit conduct."

Like, f'r'instance, looking at a driver's license or passport? Adult producers do that - and there's nothing in either the 2257A or 2257 regulations that require that the person doing the looking to be expert enough to tell a very good fake from the real thing, although considering the child porn laws, adult producers are (and would be) incredibly more careful about doing so and, considering the possible legal exposure, incredibly more attuned to spotting fakes than would be a Hollywood producer.

Of course, the word "employees" might be a sticking point, since most porn performers are independent contractors - but no; the "discussion" says, "'Employed by' means performers who receive pay for performing in the visual depictions or are otherwise in an employer-employee relationship with the producer of the visual depiction as evidenced by oral or written agreements. This definition is important, because by use of the term 'employed by,' the statute appears to permit a producer to make the certification even if there are performers who appear in its visual depictions for whom it does not regularly and in the normal course of business collect  and maintain individually identifiable information." [Emphasis added]

Oh, really? So as long as the producer takes a look at the performer's photo ID but does not "regularly and in the normal course of business collect and maintain individually identifiable information" on that person, the production company can still file its exemption certificate/letter with the Attorney General, even if that performer engages in "simulated sexually explicit content"? If that's the case, why not go whole-hog and simply require the same standard for performers to engage in actual sexually explicit content?

But we already know the answer: Hollywood is trustworthy; adult producers are not.

"It is possible, for example, that persons with whom the producer has no employer-employee relationship may appear in the background of a visual depiction or may engage in sexually explicit conduct in the background of a depiction of non-sexually explicit conduct," the "discussion" continues. "Because of the language of  the statute, a producer in that circumstance may still certify and remove itself from the coverage of the entire record-keeping requirements of the section, even without collecting and maintaining individually identifiable information for the non-employee performers."

But there's nothing in the statute that distinguishes between "persons ... in the background of a visual depiction" or who "engage in sexually explicit conduct in the background of a depiction of non-sexually explicit conduct," so any attempt to distinguish between primary performers and "backgrounders" is bogus and not supported by the statute.

The "discussion" also raises the issue of the portion of the Adam Walsh Act that refers to "all performers, including minor performers," concluding that the phrase "minor performers" in that instance is not meant to refer to performers under 18 years of age, but rather to performers who "appear for only a limited period of time in the context of the overall visual depiction." And since there may be a lot of those, and since they may even appear in and around the depictions of simulated sexually explicit conduct, the Justice Department has concluded that "an entity that produces a two-hour-long movie containing a single visual depiction of lascivious exhibition or simulated sexually explicit conduct lasting five minutes need only collect and maintain records on the performers in that five-minute visual depiction."

Of course, a two-hour adult movie may often have only five or ten minutes not devoted to "lascivious exhibition or [simulated] sexually explicit conduct" - but if the government had any sense of fairness, it would not require those subject to 2257 regulations to keep and index records on non-sex performers who only appear in those non-sex segments, no matter how many non-sex performers that turned out to be. That exemption in itself could save thousands of dollars and dozens of hours worth of recordkeeping!

But of course, the whole purpose of the 2257 regulations is to force the adult industry to spend money to comply with them, not to protect minors. Such a focus is obvious also in this almost off-hand comment that appears at the end of the above discussion:

"The Department considers it unnecessary to define the phrase 'pursuant to Federal and State tax, labor, and other laws, labor agreements, or otherwise pursuant to industry  standards.' As guidance to employers, however, the Department will consider any document that contains a verified name, address, and date of birth of a performer to satisfy this requirement." [Emphasis added]

See, if you're a mainstream company, you don't even need a "picture identification document" as long as the information is "verified," a word that 2257A also never bothers to define. But that's because (say it all together now):

"Hollywood is trustworthy; adult producers are not."

Oh, exempt producers are required to submit a list of the features they've released over the two years that the certification is good for, in order to "provide[] the Department with notice and a record that such visual depictions by the producers exist and, if necessary, enable[] the Department  to investigate the bona fides of the certifying entity." But of course, "At the same time, the list is not so burdensome as to vitiate the purpose of the certification regime in the first instance, namely, reducing the burdensomeness of the record-keeping requirements."

And rest assured, the DOJ knows just how burdensome those recordkeeping requirements are, as it revealed in its attempt here, as it did in the most recent revamp of the 2257 regulations, to sidestep the requirements of the Regulatory Flexibility Act (RFA).

So while the DOJ states, "Pursuant to the RFA, the 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," what it doesn't say is that the Act requires it to do a study on its own to arrive at those figures.

Nonetheless, the Justice Department does have an estimate or two:

"As a partial indication, according to the U.S. Census Bureau, in 2002 there were 11,163 establishments engaged in motion picture and video production in the United States," the "discussion" says. "Based on a rough assumption that 10% were engaged in the production of visual depictions of simulated sexually explicit conduct, the Department estimates that approximately 1116 motion picture and video producing establishments would be covered."

Not too bad, right? And after all, "The underlying statute provides an exemption from  these requirements applicable in certain circumstances," so "[f]or entities that qualify for the statutory exemption, however, the Department estimates that it would take less than 20 hours per year at an estimated cost of less than $25.00 per hour to prepare the biennial  certification required for the statutory exemption."

Wow! Not too bad! Just $500 every two years to keep exempt producers in the clear, recordkeeping-wise. And "[b]ased on the Department's assumption that 90% of such entities would qualify for the exemption, the total annual cost for the entities qualifying for the statutory exemption would be approximately $21,500 per year." Hell, Spielberg probably spends that much on doughnuts for a single day's shooting on one of his movies!

But wait; what about the 10% that don't qualify for the exemption?

"Based on the Department's assumption that 3,000,000 visual depictions of simulated sexually explicit conduct are created each year and that it requires 6 minutes to complete the record-keeping requirement for each depiction, the record-keeping requirements would impose a burden of 300,000 hours," the DOJ estimates (and, of course, "does not certify the accuracy of these numbers and invites comment on the assumptions outlined above.") "Based on the Department's assumption that producers of 90% of these depictions would qualify for the statutory exemption from these requirements, the requirements would only impose a burden of 30,000 hours. Assuming further that the record keeping requirements will cost $6.00 per hour to complete and $0.05 for each image of a verifiable form of identification, the total annual  cost for the 10% of entities not qualifying for the statutory exemption would be $181,500."

It's almost impossible to estimate how much it would cost the (non-exempt) adult industry to keep such records, but considering that there were approximately 13,000 hardcore movies released in 2006, the last year for which such statistics are available, and figuring that the roughly 5,000 original productions would each have an average of five scenes of sexually explicit conduct, while the roughly 8,000 comps would each have an average of 15 such scenes, that's a total of 145,000 scenes for that year for which 2257 records had to be kept.

But of course, that's hardly all. That figure doesn't take into account the still photos that make up the packaging and some of the content of the DVDs, the stills and scenes produced originally for millions of adult Websites (at this point, the best estimate is that more than 50% of adult sites produce their own original content), and the photos that appear in hardcore magazines. Moreover, each adult production company must designate a custodian of records, and for the larger companies, that could easily be a full-time job requiring the hiring of two or more recordkeepers at a cost of tens of thousands of dollars per person. Suffice to say, the total is easily much more than the government's paltry $181,500 estimate.

"It will be very interesting to take their estimates and apply it to us and to assess whether their estimates take into account the safe harbor provision and what difference that makes, because we know it makes a huge difference," Lee said.

So is there any good news here?

"The irony of it is, in terms of a challenge to section 2257, [the 2257A regs] kind of resolve the question of whether the challenge gets strict scrutiny or intermediate scrutiny," Lee opined, "because the Supreme Court has been clear that discrimination on the basis of content or discrimination on the basis of the speaker involved, gets strict scrutiny. Now you could have said, as Judge Buckley did lo those many years ago [in American Library Ass'n. v. Reno, the seminal 2257 case] - I think he was wrong then, but you could have said, 'Well, because this is aiming at something other than expression, maybe it gets intermediate scrutiny.' But now that there's a content- or speaker-based distinction, it's very, very difficult to see how a court can avoid strict scrutiny, and the real new thing that comes with strict scrutiny is the final part of the analysis, that a challenged statute falls if there's any less restrictive alternative that can accomplish the government's objectives. So the irony of the Adam Walsh Act is that Congress in one fell swoop has cemented the case for strict scrutiny, and also handed the courts a tailor-made less-restrictive alternative that is less restrictive than Section 2257: The exemption certificates."

Lee also pointed out a number of problems with the new regulations, especially in the interaction between "primary" and "secondary" producers. For instance, if the primary producer is no longer required to keep identification records because it's filed an exemption certificate with the Attorney General, what happens if a secondary producer, which is not exempt, needs those records?

"There are a number of those that Congress just did not think through," Lee summarized, "and they did not think it through because they did not want to stop and they didn't want to hold hearings and they didn't want to listen to the input of those [First Amendment attorneys] who had actually given 2257 some thought by the time the summer of 2006 rolled around, and who were there trying to get a word in edgewise."

But for Lee, it all comes down to essential fairness.

"You know, the whole thing is, there's kind of an equal treatment component to the First Amendment," Lee reflected, "which is why a mayor can't say, 'You can have a parade in my city if you're Republicans supporting Republicans but you can't have a parade if you're Democrats supporting Democrats,' or 'You can have a parade in support of the war but not one against the war.' It's that kind of content or speaker discrimination that is most prohibited by the First Amendment."

"And there's really a very powerful point to that," he continued, "and that is that what it says to legislators is, what you do to your enemies, you gotta do to your friends, and what you do for your friends, you've got to do for your enemies. There's a really powerful force to that kind of equality concept and it's shot through constitutional law; it's in the equal protection clause in the Fourteenth Amendment, but it's also an important part of the First Amendment. And throughout Congress's encounter with 2257, this recordkeeping provision, it's tried to avoid that, because all along it knew that if it imposed on Hollywood the burden that it wanted to impose on pornographers, it either couldn't get it passed or there'd be a challenge immediately that would strike it down, or whatever; there'd be insurmountable problems. And so it tried to focus on the people they really wanted to burden, and that's precisely what the First Amendment doesn't allow them to do. And now, with the Adam Walsh Act, that's out in the open. It could not be clearer."