Government Angry Over Stagliano Piracy Win?

WASHINGTON, D.C.—Friday was the final day that the attorneys in the John Stagliano/Evil Angel obscenity case could file pre-trial motions, and the defense has come up with some doozies—not the least of which is the charge that the government only targeted Stagliano, easily the most high-profile and most mainstream producer yet to come under Justice Department scrutiny, after he won an $11.2 million verdict against a DVD pirate.

"Review of the discovery materials provided by the government show that defendants in this case were not under investigation until after John Stagliano, Inc. sued in federal court to protect its copyright, trademark, and other interests in sexually explicit expression that it produced and licensed," the defense Motion to Dismiss Indictment on the Grounds That the Prosecution Is Vindictive, Retaliatory, and Improper reads. "In fact, the earliest activity by federal agents appears to be the ordering of two videos on or about April 6, 2007 ... after picking up samples of Evil Angel Productions content at a Las Vegas exposition in January, 2007 ... well after John Stagliano, Inc. filed its very public lawsuit."

"Further, it is clear that the government was following developments in the lawsuit given the December 3, 2007, FBI report of Special Agent Bradley Daniel [sic] stating that, 'On 11/29/07, writer received information that the above captioned subject was awarded a multi-million dollar judgement (sic) by the United States 9th District Court of California'," the Motion continues. "Thereafter, within less than a month, the investigating agents determined which of defendants' films were going to be prosecuted and made the purchases in dispute on December 19, 2007. ... Accordingly, within three months of John Stagliano, Inc. successfully defending its intellectual property rights and winning a multi-million dollar judgment in its favor, federal agents had finalized the film purchases necessary to the pending Indictment."

What may conceivably have caught Agent Daniel's eye was a statement made by Sean Macias, attorney for Stagliano's fellow plaintiff, producer Jules Jordan, who won about half the amount that the jury awarded to Stagliano: "Even Disney doesn't get this amount of recovery. We're really happy that the jury sent a message and that justice prevailed, and that [Jules] can go back to his business feeling vindicated that the adult market wasn't a deterrent but that they saw that [Jules'] rights, not only as to his copyright but as to his right of publicity, were violated, and the jury focused on the facts and on the law, and not on who the plaintiffs or who the defendants were. It was nice."

But according to the Motion, "[T]his prosecution is not just generally vindictive in the sense that it chills the exercise of constitutional and statutory rights of any number of people considering whether to risk copyrighting sexually explicit expression. Rather, defendants contend that the instant Indictment is also a direct attack of John Stagliano's right to petition his government for redress to prevent the theft of his intellectual property rights."

"Let me make it as simple as I can," Stagliano’s attorney, Allan Gelbard, summarized. "A guy that's involved in pornography goes to trial in front of a very hostile judge [S. James Otero] who was appointed by guess who [George W. Bush], who does everything he can to make us lose and we still win, and he gets a huge award, which means that you now can protect adult materials under copyright, and you want to smack that guy around a little bit."

Stagliano is also the best-capitalized defendant that the Justice Department has yet targeted in the wave of obscenity prosecutions that began in 2003 with Extreme Associates, and it is possible that the DOJ sees as one benefit of the current prosecution that, if convicted, Stagliano and his companies, in part because of his piracy win, could conceivably be fined enough to pay the government's expenses in bringing the case in the first place—something the government has not been able to require any other obscenity defendant to do.

In support of its Motion, the defense team cites the multi-jurisdictional prosecution scheme of mail-order giant PHE, Inc. (Adam & Eve) hatched by former U.S. Attorney for the District of Utah, Brent Ward, and recounted at length in PHE owner Phil Harvey's book The Government vs. Erotica. One of the outcomes of the court battle against that prosecution strategy was PHE's successful attempt to vacate the DOJ's final effort to convict the company on obscenity charges in Utah.

As AVN readers will recall, the current head of the Justice Department's Obscenity Prosecution Task Force is former U.S. Attorney Brent Ward.

Readers will also recall that one of the issues previously raised by the defendants in an earlier Motion to Dismiss was the fact that if the government succeeds in convicting Stagliano in the District of Columbia, the conviction would have a chilling effect on all adult producers who wish to protect the copyrights of their works, since it would mean that anyone sending a copy of a sexually explicit work to the U.S. Copyright Office might be held liable under federal law for interstate transportation of obscene material. Hence, a Stagliano conviction could conceivably affect every content producer in the country and even foreigners who wished to obtain U.S. copyrights on their material.

The copyright rights implications of the government's prosecution likely played a part in another just-filed defense motion: to change the venue (location) of the trial from Washington, D.C., to Los Angeles.

After quoting from the United States Attorneys' Manual, the defendants state, "Clearly, even the Department of Justice recognizes that, where a distributor makes numerous mailings into a variety of districts, the preferred venue location is the jurisdiction from which the allegedly obscene materials were shipped. Moreover, the Department of Justice specifically advises that obscenity prosecutions based on test purchases by postal inspectors may be brought in the district of receipt if the inspectors have information showing prior mailings of such material into the receiving district. Finally, in cases where the obscenity offense was committed via computer, venue should lie in the district in which the target and his computer are located. ... In the instant case, defendants contend that there are insufficient contacts with the District of Columbia to properly venue this prosecution here."

The Motion goes on to note that there have been no complaints about any movies or internet content from any person in the District of Columbia—a jurisdiction where, it might be noted, several high-ranking government officials have admitted to extramarital affairs, and where there is currently an investigation into the workplace porn-viewing habits of employees of the National Science Foundation—and that the government's first contact with the charged videos—Milk Nymphos, Storm Squirters 2 and Fetish Fanatic 5—was at the 2007 Adult Entertainment Expo. In fact, the only contact those three videos have had with the District of Columbia was when an FBI agent placed an order for the movies to be sent to D.C..

The defense Motion references the case of U.S. v. Barry Goldman, whose attorney, Federal Public Defender Lisa Mack, has moved to dismiss the obscenity charges against Goldman based on the fact that the government first tried to prosecute Goldman in the comparatively conservative District of Montana based on, again, a single mailing of the allegedly obscene material to that state, on an order placed by FBI agent Dan Bradley.

"It deserves reiteration at the outset that these movies were only ever allegedly mailed from New Jersey and that the government knew from day one that Mr. Goldman lived in New Jersey," Mack wrote in her Motion to Dismiss. "Yet New Jersey was given absolutely no consideration until the government had seemingly exhausted all other possibilities and was on the brink of facing a lack of jurisdiction. ... Despite conducting perhaps one of the simplest of all federal investigations—order movies, receive movies, watch movies—the government has taken three years to conclude its investigation, set up a sting operation, and ultimately end up right back in New Jersey."

"Similarly, in the case at bar," the Stagliano defense Motion reads, "the only events tied to the District of Columbia are that it is where the investigating FBI agents from Virginia designated the videos they ordered to be delivered (indeed, one would assume that if the FBI had stuck with the initial determination that this case was to be prosecuted in the Northern District of Alabama, then FBI agents would have ordered videos to be prosecuted sent to Alabama), and it is where Special Agent Bradley downloaded the disputed movie trailers. Defendants contend that this is simply not sufficient to justify maintaining a prosecution on [sic] Washington, D.C.."

The Motion goes on to note that Stagliano's residence and the location of incorporation of his businesses are all in Los Angeles, and that all defense witnesses currently identified, including all performers in the charged videos, are also located in California, as are all the records and documents to be used by the defense in the case.

"In sum, the only factor tying this case to the District of Columbia is the decision of the FBI and supervising prosecutors to designate this District as the place of receipt for the films charged in the Indictment and the location where the charged movie trailers would be downloaded," the Motion concludes. "Defendants respectfully submit that, under the circumstances, the appropriate course of action is to grant the Rule 21(b) motion, especially given the lack of any significant association of the defendants with this District."

The third defense Motion filed in recent days is a Motion in Limine, whose purpose is to exclude from the obscenity trial the "Pleadings and Joint Motion in Limine Number 6 of 10" which Stagliano and Jules Jordan filed in their piracy case against Kaytel Video Distribution.

"The litigation was highly contentious," the Motion notes. "As the trial approached, defendants' counsel advised plaintiffs' counsel that they intended to argue that because the works were pornographic, they were not entitled to copyright protection, or in the alternative, that the jury should consider the content of the productions in any damages determination it may find."

"They want to use the Motion in Limine that we filed to prevent Kaytel's lawyer from arguing that the works, because they're pornographic, were obscene and therefore not protected under copyright, and it's a Motion in Limine that says that's not the law; you can't even bring it up," Gelbard told AVN. "In fact, we very specifically said, 'We don't believe these are obscene but they shouldn't even be able to raise the issue because it confuses the jury,' and the judge agreed and granted the motion. And so they [prosecutors] want to say, 'Well, you know, he knows this stuff is obscene because he's filing these motions,' but it doesn't even apply to the same movies. Besides, there's no admission of anything there; it's argument of counsel. That's not evidence."

But Gelbard's pleadings went even further.

"The evident purpose of the Government's attempt to offer the pleadings in the copyright case and the Motion in Limine is to prejudice the jury," the defense wrote. "Moreover, as counsel for plaintiff JSI [John Stagliano, Inc.] in the copyright case is counsel for defendant John Stagliano in this case, such presentation will further prejudice defendants by suggesting the inference that JSI's counsel thought its works were actually obscene, and/or undermine the credibility of defendant's counsel, as the jury may infer that counsel believed that the civil jury might find the works in that case (none of which are charged here) obscene. This would be both highly prejudicial and confusing."

Another part of the Motion in Limine would have the judge require prosecutors to play the charged works in their entirety. In at least two recent obscenity cases, including the Max Hardcore case in Tampa, the trial judge allowed prosecutors to play just selections from the charged material—a boon to the prosecution, because as prosecutor Edward McAndrew remarked in the Hardcore trial, "The issue is who the jury might blame for having to watch it." In that case, the prosecution was allowed to play excerpts, forcing the defense to play the remainder of the movies during its portion of the case.

Finally, the defense team has also filed a motion to exclude Count Seven of the indictment from the trial of the other six counts.

Count Seven reads, "On or about January 21, 2008, in the District of Columbia and elsewhere, defendants JOHN STAGLIANO, JOHN STAGLIANO, INC., and EVIL ANGELPRODUCTIONS, INC., aided and abetted by each other, knowingly used an interactive computer service to display an obscene image, that is, a motion-picture trailer identified as "FETISH FANATIC CHAPTER 5,"in a manner available to a person under 18 years of age in violation of Title 47, United States Code, Sections 223(d) and 2(a)."

There's just one problem: The impending trial is all about whether the trailer for Fetish Fanatic 5 is obscene, and the defendants take the position that 47 U.S.C. §§223(d) and 2(a) can't be applied to the defendants unless or until a jury finds the trailer actually to be obscene.

"47 U.S.C. §223 is the remnants of COPA," Gelbard explained. "The original Act was, you couldn't post things that were harmful to minors where minors could access them, and after the Supreme Court got done with it, it's become that you can't intentionally distribute obscene materials where minors can get it, but it's been limited to only obscene materials. And so what the government is trying to do here is to keep in front of the jury the idea that minors are going to somehow see this stuff, and that puts the cart before the horse. In order for the statute to be constitutional, the works have to be obscene in the first place, and under Pinkus [v. U.S.] and a couple of other Supreme Court cases, you can't use children in the determination of obscenity. So you've got to decide whether the works are obscene first. So I filed a motion to bifurcate the trial and try the 223 count afterwards if the trailer is found to be obscene in Count Three; then they can go back and try Count Seven the next day right then and there, but you can't let the government get up there and say, 'Well, you know, kids could have seen this!' Because that poisons the jury, it's inflammatory and prejudicial."

Gelbard noted that the charged trailer has always been behind a firewall that requires anyone accessing the trailer to affirm that he/she is at least 18 years of age.

"That's what the Supreme Court says we've got to do and that's what we did," Gelbard said.

Considering that Judge Richard J. Leon took more than a year to rule on preliminary motions filed by the parties to this case, it's unclear when he will rule on this most recent set of motions—but one thing is sure: It will happen before July 7, which is the date that Stagliano's obscenity trial is set to commence.