Feds Lose Stagliano Obscenity Case—First in Over 30 Years

Pictured: Allan Gelbard, Lou Sirkin, John Stagliano, Paul Cambria and Robert Corn-Revere. Photograph taken by Joey Silvera on his cell phone.

WASHINGTON, D.C.—All it needed was a shot of little Stewie Griffin running down the aisle of Courtroom 19, shouting "Victory is mine!"

But even without that, Friday, July 16, 2010, was a banner day not only for defendant John Stagliano, but for the adult entertainment industry in general. That was the day U.S. District Judge Richard J. Leon, pursuant to a number of "Rule 29" motions filed by Stagliano's attorneys, dismissed what was left of the Obscenity Prosecution Task Force's seven-count indictment against Stagliano individually, John Stagliano, Inc. and Evil Angel Productions, Inc..

At 4:15 Friday afternoon, Judge Leon reentered the courtroom approximately an hour after having finished hearing the motions for dismissal by prominent First Amendment attorneys Paul Cambria, H. Louis Sirkin and Allan Gelbard, at which point he told all attorneys present not to go very far, because he'd be back with his decision in a few minutes.

And what a decision it was! Apologizing because he hadn't had enough time to add "flowery words" to what he was about to read, he almost inaudibly launched into what amounted to a wholesale condemnation of the case the Task Force had spent 18 months preparing, and which prosecutors Pamela Stever Satterfield and Bonnie Hannan had spent the better part of three days presenting to the jury.

As to Counts One and Two, he said, although the government had certainly proved that John Stagliano, Inc. was a corporation under California law, it had failed to prove that the company had had anything to do with shipping the DVDs Milk Nymphos and Storm Squirters 2: Target Practice to the FBI's undercover mailbox in the District of Columbia, nor "us[ing] an express company or other common carrier" to do so, as charged in Counts Four and Five, nor "knowingly possess[ing] with intent to distribute obscene motion picture films"—the aforementioned pair—as charged in Count Six. (Counts Three, Seven and one part of Six had previously been dismissed, since all related to the trailer for Fetish Fanatic Chapter 5, which the court had previously ruled was inadmissible, since the government's exhibit of it—both the CD onto which it had allegedly been copied by FBI Special Agent Daniel Bradley, and the back-up copy that had been made—had proved to have too many glitches to be relied upon by the jury.)

The next defendant considered, Evil Angel Productions, Inc., was, Judge Leon said, a "tougher call," but he nonetheless stated that there had not been sufficient evidence presented, circumstantial or otherwise, by the prosecution that this corporation, which had been suspended from doing business in California in 2005, had also had anything to do with shipping the two DVDs, nor with using a common carrier to do so. Although he admitted that the name "E.A. Video" had appeared as the return address on the label of the package which the government had said contained the two charged DVDs, and despite the fact that the prosecution had flown a Los Angeles Vice Squad detective all the way to the District of Columbia to produce photos he had taken of the Evil Angel booth at the 2007 Erotica LA and the 2008 Adult Entertainment Expo, Judge Leon ruled that that circumstantial evidence was "not sufficient to enable this jury ... to prove that Evil Angel Productions, Inc., as a corporate entity," performed the actions or had the knowledge and intent "beyond a reasonable doubt" as charged in Counts One, Two, Four, Five and Six of the indictment.

Finally, the judge turned to the charges against Stagliano himself. The evidence against Stagliano, direct or circumstantial, was "woefully insufficient"—a phrase that cropped up several times in the judge's ruling—even giving the government's evidence every benefit of the doubt, to allow a jury to find, beyond a reasonable doubt, that Stagliano had personally had anything to do with the shipping, by common carrier or otherwise, of the two charged DVDs, nor of knowingly possessing the disks with the intent to distribute them. Again, all counts dismissed.

Stagliano could have been imprisoned for 32 years if he had been convicted on all counts of the indictment, and the government could have seized his company, his websites and many of his personal possessions as well.

"I trust the government will learn a lesson from its experience in this case," Judge Leon continued, adding later, "Hopefully, the courts and Congress will greater guidance to the judges in whose courtrooms these cases will be tried" since there were "difficult, challenging and novel questions" raised ... and there are constitutional interests at stake here."

As the final dismissals were being read, this reporter could feel John's wife, who was sitting next to him, begin to tense up, and when it was clear that all charges had been dismissed against all defendants, there were tears in her eyes.

"I heard it but I just couldn't quite believe it," she said later. "All the hard work, the long hours we put into this defense, everything we did has been vindicated."

Later, the Staglianos, the defense team (which included Robert Corn-Revere as local counsel) and a group of supporters who had attended the trial gathered in front of the statue of William Blackstone, the 18th-century British jurist who is considered the father of the common law, whose statue sits in front of the federal courthouse where the case was tried—and who Cambria was convinced had been watching over the trial—for press interviews, including a video segment posted on Reason.tv.

"It's been a very interesting experience," Cambria deadpanned. "We had rulings that we weren't pleased with, but they were fact-specific. What we have here is not just John's victory, but a victory in the name of Reuben Sturman, Russ Hampshire and all true devotees of the First Amendment."

"It was my personal pleasure to represent John," he continued. "I loved working with the team and Bob Corn-Revere, who brought to us critical legal briefs that helped turn the tide; they made it happen. John is as individual as they come, and I wish there were many more like him."

"We really balanced each other's strengths," agreed Sirkin. "It was a great combination, Al and Paul and me; it's like when Jennifer [Kinsley, Sirkin's partner] and I try cases together; it's that sort of meshing of talents. It's like when Michael Murray and I and Paul did the Vivid case together. We were a real team, and I only wish we'd had Michael on this one too."

"We're just ecstatic," Gelbard said breathlessly. "It's an honor and a privilege to work for John. I mean, I'm the baby lawyer here, and I'm in awe of Lou and Paul and working with them and watching them work. This [case] is why I went to law school. ... It's a good day for the First Amendment and for an independent judiciary. The judge was independent and courageously strong in defending our constitutional principles."

But even in his moment of victory, Stagliano himself managed to joke about the outcome.

"I'm disappointed," he said faux seriously. "They didn't put up much of a fight ... I want to tell the Justice Department, it's karma. My lawyers were passionate, they were passionate about this case, while theirs were sloppy and not passionate. They thought they didn't have to do the work they needed to do, and that's why they failed miserably."

The Background:

Despite its ending, Friday had started contentiously—more so than any previous day of the trial.

As AVN readers will recall, late Thursday afternoon, after a "sidebar" conference out of the hearing of press and spectators, Judge Leon told the attorneys that there was an important matter that he had to deal with, which was Agent Bradley's statement earlier that day, in response to a question from Cambria, that he had most recently watched the charged movies on July 7, and that he had done so at the request of the court.

Upon hearing the statement, Judge Leon was livid, because he knew he had neither told the agent himself, nor had he told lead prosecutor Satterfield to tell the agent anything about how to prepare for his testimony, let alone to watch the movies again. So since none of the attorneys had brought it up, the judge took it upon himself to get the situation rectified, because he didn't want it on his record that someone had essentially accused him of tampering with a witness in one of his trials.

No one doubted that the judge had in fact not issued any order to the witness, so that left the prosecution in a dilemma: Either Satterfield had given Bradley inaccurate information, or the witness himself had lied on the witness stand—or perhaps it was simply a misunderstanding. In any case, it would look bad for the prosecution—and worse, Sirkin had asked the judge if he could call Satterfield to the witness stand to straighten it all out, which would have meant that the government's lead prosecutor would have had to recuse herself from all further prosecution of the case!

But if Satterfield didn't testify, then the jury would be left with the impression that Bradley had lied, and that would also mean that the defense attorneys could argue that if Bradley had lied about this detail, maybe he had lied about other facts as well.

In an effort to defuse the situation, Judge Leon suggested that perhaps Satterfield could simply sign an affidavit affirming that the judge had not told her to tell the FBI agent to do anything—but that wouldn't help either Satterfield herself, the witness or the government's case in general. But that's how the matter was left as court adjourned on Thursday.

When court reconvened at 10 a.m., Judge Leon returned to the matter of Agent Bradley's testimony, and Satterfield quickly expressed worry that whatever happened might leave the jury with the impression that the agent had lied, where Satterfield herself was of the belief that he simply misspoke on the witness stand. The judge and the prosecutor argued for a few minutes about the wording Bradley had used, with Satterfield finally stating that whatever language the witness had used, "It's inartful but he's not lying."

But Judge Leon was less interested in how the witness looked to the jury than how he himself looked, stating that he would not allow the jury to be left with the "misimpression" that the judge had given any such order to either Satterfield or Bradley.

But Satterfield balked at taking the witness stand herself, claiming that anything she said about her conversation with Bradley would be, at least in part, hearsay.

But Judge Leon, fully aware of the consequences of the action, was not interested in having Satterfield take the stand, so he again suggested that she file an affidavit, keeping it "simple." And although she had expressed concern earlier that the defense might argue that the witness had lied, Judge Leon suggested that Satterfield could counter-argue that the witness had simply been confused in his original testimony.

In any case, Satterfield stated that she would not recuse herself from the case, and when Sirkin requested that the judge strike Bradley's testimony from the court record, the judge replied, "I think that's disproportionate. ... To strike his testimony would be a disproportionate response." He went on to opine that the jury has common sense and would understand that there might have been confusion—and he refused to allow the government to testify regarding the "confusion," which left the proposed affidavit as the only solution.

"The jury can't have a doubt in its mind that the court was involved in the government's case," Judge Leon insisted, adding that he could understand that the witness was "not as cautious, not as careful as he should be in testifying."

The defense team at that point requested a read-back of Agent Bradley's testimony that gave rise to the problem, but Judge Leon pointed out that the court reporter who took down the testimony had only been filling in for his regular court reporter, and the substitute was not available to read the testimony back. The judge then returned to the issue of the affidavit.

"How long would it take you to prepare one?" he asked.

"Five minutes, Your Honor," Satterfield replied.

Ninety minutes later, court reconvened, and although Satterfield had prepared a multi-paragraph affidavit, the defense objected to its introduction into evidence, noting that according to their reading of it, it contained testimony from Satterfield and, because it was in affidavit form, the defense could not cross-examine her regarding its content. Cambria stated that he was fine with the document's first paragraph, since it was a restatement of what Judge Leon had said earlier, but that the rest of it was testimony, and he argued that Satterfield couldn't be both the government's attorney and a witness in the case.

The judge apparently agreed with Cambria's analysis, and put the question to Satterfield: "Which do you prefer less: An affidavit, or testifying yourself?"

"Neither," she replied.

"You need to choose one: Affidavit or testimony?" the judge insisted. "Which do you prefer less?"

At that point, Satterfield argued that under the attorneys' rules of ethics, she has an obligation to make truthful statements, and that an affidavit that contained only the statement that was acceptable to the judge and the defense would be "incomplete."

"Forcing me to do an affidavit is a very serious issue," Satterfield stated.

"Do the affidavit," the judge insisted.

"No," she replied.

"Then you're a witness," the judge announced.

Satterfield requested an opportunity to file a brief on the issue, but the judge refused, saying that the jury had been kept waiting for several hours in their small jury room, and there was no time for yet another postponement of the trial.

After a bit more discussion, Satterfield sat down and Hannan stepped in to argue that the government was willing to do an affidavit, but "it must be accurate and complete."

The affidavit was "a solution to a very difficult problem," the judge stated. "There's a very targeted, specific issue here," adding that the only alternative would be for Satterfield to take the witness stand.

The discussion continued of several more minutes, with Cambria making the point that, "The government caused this problem," and that Satterfield had a duty to correct it. Hannan, however, insisted that the only affidavit the prosecution could agree to was the one Satterfield had already prepared, but the court agreed with defense counsel that the affidavit contained testimony by Satterfield that was unacceptable, and he insisted that she just needed to correct her witness's misstatement.

"There are 14 jurors sitting back there cooling their heels for hours," he finally said. "Get it done."

Several minutes later, the judge had a new, shorter affidavit in his hand, which he read to the jury before sending them out for their luncheon recess, thus ending the problem—and allowing the government finally to rest its case.

When court reconvened at 2:30, Judge Leon asked the defense attorneys to begin arguing their "Rule 29" dismissal motions.

Gelbard argued first because, he said, his client, Evil Angel Productions, Inc., was the easiest to deal with. Gelbard stated that, as to Count One, the government had presented no evidence that his client had done anything, and that the only documents the government had introduced were ones reflecting the corporation's formation in 2002 and its suspension in 2005. He noted that the government had never found any employees of the corporation, no bank accounts, nothing to connect it to this case. In response to a question from the court, Gelbard argued that "Evil Angel" and "Evil Angel Productions" were simply trademarks used by John Stagliano, Inc., and as such had no place as a defendant in the case.

"They have no idea what these entities are," Gelbard charged. "They can't just speculate what it is."

The judge raised the issue of several instances where exhibits had contained references to or logos of "Evil Angel" or "E.A. Productions," or "E.A. Video," but Gelbard dismissed all of them as simply variations of Stagliano, Inc.'s trademarks.

Satterfield responded that the use of the variations of "Evil Angel Productions" were actually references to the allegedly now-defunct corporation, that the DVD logos and references to "© Evil Angel Productions" were references to the corporation, or at least that the jury could infer that they were, and that therefore, the government had charged the proper party.

Judge Leon responded that the burden was on the government to demonstrate who owns the logo, and that if the logo were owned by John Stagliano, Inc, it would be improper to impute its ownership to Evil Angel Productions, Inc.

"It's all Evil Angel," Satterfield responded.

"We're trying to ... parse this out a little more," the judge explained.

The discussion continued for several more minutes, during which Gelbard described the government's "inferences" about the nature of the logo as "rank speculation," and Satterfield called attention to the records of domain registrar Go Daddy that reflected ownership of Evil Angel's websites by "Evil Angel Productions, Inc. and John Stagliano," the photos Det. Ozaki had taken of the "Evil Angel" booth at conventions, and the fact that the DVDs shipped from the same address where John Stagliano, Inc. had its offices.

When it came Sirkin's turn to argue for his client, John Stagliano, Inc., he noted that the government had not produced a single document, besides the original incorporation records, that named his client as having had anything to do with the creation, shipping or receiving payment for the charged DVDs—and that in fact, Agent Bradley's testimony had been that "Evil Angel" did everything.

When Judge Leon questioned him further, Sirkin pointed out that Agent Bradley had sent his money order to btmmailorder.com, not to John Stagliano, Inc., and that there was no evidence that his client had ever received any payment for the charged DVDs. He further noted that there was nothing on any package that said "John Stagliano, Inc."—and argued that the government's position was somewhat frightening, in that if culpability could be tied to a company whose name never appeared on any product, it would chill any content producer from selling any sexually explicit product.

"You're creating the most massive prior restraint ever possible," he opined.

Sirkin further argued, as AVN had noted in its previous reportage, that there was no connection of the charged DVDs with the District of Columbia—and moreover, he wasn't sure that the package had ever even entered that jurisdiction. Sirkin speculated that since testimony had established that the FBI had offices in Virginia, possibly the United Parcel Service, which had delivered the package, knew that the post office box in D.C. was a phony, and may have taken the package directly to the FBI's Virginia satellite office—and that after all, the government had never called as a witness the FBI agent who allegedly picked up the package from D.C. and brought it, unopened, to Agent Bradley in Virginia.

"You can't just stack inferences on inferences on inferences, and that's what you'd have to do here," Sirkin concluded.

After a short recess, Cambria came to the podium to discuss his client, John Stagliano.

"There's no connection between Mr. Stagliano and this transaction," Cambria pointed out, noting that the government had not produced any witness or document that indicated that Stagliano himself had ever had any personal contact with the DVD shipment ordered from btmmailorder.com and eventually delivered to Agent Bradley.

"All we have is, in 2000, my client was listed as an officer of Evil Angel Productions, Inc.," Cambria stated.

When Judge Leon asked if the government had produced anything that indicated that Stagliano himself was aware of the "character and content" of the charged DVDs, Cambria stated that they hadn't, and that for the jury to infer that he had simply because he owned the company would be a license the company's "presumptively protected expression.

Cambria argued that the government had presented no evidence that anybody connected with Stagliano had done anything at any level to do with the charged disks, arguing that the mere existence of the package was not evidence of that. He also noted that the government had not indicted Komar, the owner of btmmailorder.com, as a co-conspirator, and that the photos of Stagliano at the Evil Angel booth at conventions, and his listing as president of Evil Angel Productions, Inc. in 2000, and as still the owner when the corporation was suspended in 2005 still created no connection to the indictment.

"Nowhere is he part of this transaction," Cambria stated, adding that the government could have had an employee of Komar or of Evil Angel testify to such a connection, but never did.

Satterfield countered that Agent Bradley had testified that Komar was originally out of stock of the DVDs he'd ordered, and that Komar contacted Evil Angel to drop-ship the disks—and that Stagliano himself, in his "President's Message" on the home page of the Evil Angel website, affirmed that he owned the company.

When Judge Leon asked how the government had shown Stagliano's personal knowledge of the character and content of the charged material, Satterfield pointed to the 2257 notice on each DVD, indicating that Stagliano was the custodian of records for the disks, so the jury could infer from that that Stagliano knew what the disks' contents were—as well as artwork on one DVD's label, "Hand-Picked By Buttman."

The judge, however, asked, "How do we know who in the company has the authority to put these markings on the DVDs?", adding that no evidence had been presented that the company even had any employees.

However, when Satterfield pointed to one of Det. Ozaki's photos, which featured a woman the detective had identified as an employee of the company, the judge pointed out that Gelbard had asked the detective if he had ever seen that woman's paycheck, which the witness said he hadn't.

Satterfield argued that the jury could draw the inference that the woman worked there, but the judge disagreed, stating that it was not good enough for a "beyond a reasonable doubt conclusion."

The argument lasted a few more minutes before Judge Leon announced that he would soon render his decision on the "Rule 29" motions, which brings us back to the beginning of this article—except to note that reporter Amanda Hess of the Washington City Paper spoke with five jurors—four women and one man—after they'd been excused from further duty, and each told her that there was "no way" they would have convicted Stagliano from the evidence presented by the prosecution.

As we said: A banner day for free sexual speech.