If you operate a typical brick-and-mortar small business, the risk of being called upon to defend a lawsuit outside of your local area is very low. Customers all physically come to you; you don't advertise or do business outside of your home turf; everything is local. If you infringe someone's trademark, you do so only in your county. If you sell a defective product, you sell it in your county. Even if you defame someone, you probably do so only in your county. You advertise only in the local media, seeking local customers. Under those scenarios, if someone wants to sue you, you have the privilege of defending the action in your own county or district (district courts often have jurisdiction over more than one county). While perhaps mechanically somewhat different, these rules generally apply whether in state or federal court. If someone comes into your business, regardless from where, any legal complaint about it generally must be brought in your county or district.
This applies with equal weight to the unthinkable: criminal prosecutions. If someone brings a criminal charge against your business, it is improbable that it could be brought outside the business's local county or district. The rules for criminal cases actually are not too much different than those that apply to civil ones. If someone comes in from out of town and purchases a product, a criminal complaint of fraud or an unlawful business practice must be brought on your home turf.
Obscenity prosecutions raise all the more significant issues because you can violate one of those laws having no intention of doing so. However, a brick-and-mortar business at least has the ability to keep its finger on the pulse of what is acceptable and unacceptable locally - i.e., the community standards - and what the local prosecuting authorities might consider to be obscene.
The fact that you are reading this, however, means that you are online, which, in turn, means your content can be found everywhere. You may not choose to do business everywhere, but you stand to be brought into court anywhere that you do.
For you technicians, the legal concepts involved here are jurisdiction over the person and venue. Jurisdiction over the person basically amounts to whether a court has the power to order you around. Venue means which branch of a court system should hear your case - which county or which district.
If a customer from Miami is on vacation in New Orleans and makes a purchase from a retail merchant, the customer cannot bring a lawsuit in Miami claiming that the product is defective. After all, the customer chose to come to Louisiana and engage in commerce there; and the merchant never went to Florida. One exception, however, is found where the merchant has a presence in Florida. A national company stands to be sued pretty much anywhere it does business.
Even if the customer could figure out some legal angle to bring a suit in Florida, and hale the merchant into court in Miami, the merchant could completely prevent that by including in the sale contract that any legal action about the transaction must be brought in New Orleans. This is called a "choice of forum clause" of a contract, and courts generally enforce them if they are reasonable.
Because of the general support for choice of forum clauses, the merchant of New Orleans can avoid being sued by his Miami customer that way, even if the product is shipped to Miami in the mail. For a Webmaster, properly written terms and conditions not only can include a choice of forum term, but also a choice of law provision - designating local law as applicable - and an arbitration provision, so that the seller can avoid expensive and dicey jury trials. Of course, if you do this wrong, you could be worse off than you were to begin with.
These contractual clauses, however, only work when the parties to the dispute have agreed to them. Accordingly, such provisions are worthless against a claim of copyright infringement, trademark infringement, invasion of privacy, defamation, or some other claim when it is brought by some third party with which you have no direct relationship.
If a brick-and-mortar business sells an adult DVD to a customer, a criminal prosecution for some kind of fraudulent activity outside the county or district where the business is located is virtually a legal impossibility. And an obscenity prosecution in some far-flung location to which the customer took the DVD after purchasing it is unheard of.
Mail-order businesses present the next level of difficulty concerning the specter of being haled into an out-of-town courtroom. This is where a contractual forum-selection clause becomes vital. If you sell something to a customer across the country without including a forum-selection clause in the sale agreement, the customer generally has the right to sue you in his county because, after all, you did business there.
Such a mail-order vendor also would be subject to criminal prosecution in the customer's jurisdiction for basically the same reason. And this is the beginning of the perplexing problem facing mail-order merchants of adult media. It is difficult enough to know the ill-defined standards of one's own community; knowing the standards of every community where there might be a customer is impossible.
In the 1980s, when the Meese-driven Reagan administration began its assault on erotic media, the first salvo was Operation Post Porn, an announced attempt to put a complete end to mail-order pornography - which obviously did not succeed. Postal inspectors posing as customers in Washington, Minnesota, Salt Lake City, Louisville, and elsewhere ordered adult materials from what they viewed as the larger mail-order suppliers of adult media. Federal obscenity indictments were brought against all of the shippers, in many instances in two or three jurisdictions at once. This was a deliberate and coordinated effort by the Department of Justice calculated to indict the companies and their owners to death. One of the more resourceful adult mail-order companies sued the Department of Justice over its multiple-prosecution strategy, ultimately succeeding in bringing about a change in the United States Attorneys' Manual, eliminating a provision encouraging this practice. PHE, Inc. v. United States Department of Justice, 743 F.Supp. 15 (D.D.C. 1990). The DOJ followed that with Operation Woodworm, an effort to put all of the Los Angeles adult video manufacturers out of business. Prosecutions were brought in the likes of Tallahassee, Oklahoma City, and Memphis, along with some less ominous-sounding places like Flagstaff, AZ and, believe it or not, a couple in Las Vegas. The one Las Vegas case that went to trial, incidentally, resulted in a quick verdict of not guilty.
As an aside, perhaps the most outrageous obscenity prosecutions ever were in the 1970s, the first when the federal government prosecuted in Memphis the producers and distributors of Deep Throat, and included as one of the defendants Harry Reems. His only involvement was to appear as an actor in its New York/Florida production. See United States v. Marcks, 520 F.2d 913 (6th Cir. 1975). The second was Operation MiPorn -note the FBI's love affair with calling these things "operations," like it is some invasion. Anyway, what happened was that they set up a sting operation in Miami, garnering shipments from all of the major adult distributors from around the country, although primarily from Los Angeles and New York. Then, predicated upon the theory that, because all of the distributors attended the adult component of the Consumer Electronics Show every year (still true, although it now is the separately-operated Adult Entertainment Expo, along with Internext), the DOJ claimed that the shipments were all part of one, giant, national conspiracy to distribute obscene material. Accordingly, all of the defendants were indicted in one, giant indictment. Estimates of the length of the trial of the case averaged something over a year! However, the judge would have nothing to do with a trial of that magnitude, or the government's preposterous mega-conspiracy theory, dividing the case into its component parts. See United States v. DeFalco, 509 F.Supp. 127 (S.D. Fla. 1981).
Operations MiPorn, PostPorn, and Woodworm confounded the adult media distributors because they had no clue where the government might strike next nor any handle on community standards of the hundreds of places to which their products were being shipped. In the 1980s and early 1990s, there existed a mythical "list of places you can't ship"; the author of this column periodically would receive calls requesting a copy of the non-existent list. In fact, there were many lists, but no universal one. Each manufacturer and distributor, gauging what risks were manageable, would make a decision as to which places were out-of-bounds. Oklahoma, Memphis, and Salt Lake City, for example, were on most everyone's list. In an effort to quantify this, a business called Know Censorship Inc. was born. What it did was to register freedom-of-information (some places known as open-records, public-records or sunshine-law) requests for information about what had been prosecuted where and the results, compiling a book including all of the data. That is the closest that anyone has ever come to quantifying community standards around the country in any meaningful way.
As difficult as it is to determine what is safe to distribute where, adult distributors and mail-order companies at least have the capability to control the locations of the recipients of their shipments, thereby minimizing - albeit not eliminating - the possibility of being prosecuted in an unfriendly place. The reason the risk cannot be totally eliminated is an aberration called United States v. Investment Enterprises, Inc. , 10 F.3d 263 (5th Cir. 1993). That decision, which is binding only on federal courts in Texas, Louisiana, and Mississippi, but persuasive authority elsewhere holds that the intent element of federal obscenity conspiracy is satisfied by an intent to introduce the materials into interstate commerce, the mails, common carrier or, by parody of reasoning, over the Internet. The defense theory in that case was a lack of intent to send anything to Dallas and accordingly, the prosecution could not be brought in Texas. The way the decision was reasoned, if someone sent erotic material by Federal Express from Los Angeles to Miami and Federal Express inadvertently misdirected the package to Dallas, the sender could be the object of a Dallas obscenity prosecution. The confluence of all of the factors required to bring about that result would have long odds, but it demonstrates the absurdity of the decision.
The Internet, of course, immeasurably multiplies the problem because you never can be sure where anything is going. If a Webmaster attempts to limit his exposure, his efforts would be stymied by the reasoning of the Investment Enterprises case. For example, installing a system of credit-card verification that verifies the zip code of the cardholder and blocks certain zip codes is not foolproof. After all, how do you know that the customer is not accessing your site from a laptop computer, thousands of miles from his house to which his bills are sent? Or from a hotel room? Or from someone else's computer?
Even more problematic is what appears in the uncontrolled area of a Website, the material that anyone on Earth can access. The Webmaster is knowingly distributing that material everywhere. The problem with applying community standards under those circumstances, of course, is that it reduces all Websites to the lowest common denominator, giving a conservative, rural community the power to censor the rest of the United States to standards to the liking of that community. That is what the courts have been wrestling with in the COPA litigation. Ashcroft v. American Civil Liberties Union, 535 U.S. 564 (2002), on remand, 322 F.3d 240 (3rd Cir. 2003).
The days when it made sense to define a "community" by political boundaries are long gone. Ironically, as communication and transportation were rapidly shrinking the country, the Supreme Court in its 1973 Miller decision jettisoned national standards in favor of local ones, claiming that residents of Maine or Mississippi should not be required to tolerate what was acceptable in Las Vegas or New York. Miller v. California, 413 U.S. 15 (1973). But as any adult Webmaster can attest, there are probably more potential customers per capita in Maine and Mississippi than in Las Vegas or New York.
The bottom line is that, so long as Miller is the law, that presents the greatest hazard of being dragged out of town to court.
Clyde DeWitt is a partner in the Los Angeles, CA-based, national law firm of Weston, Garrou & DeWitt. He can be reached through AVN Online's offices, at his office at 12121 Wilshire Boulevard, Suite 900, Los Angeles, CA 90025 or over the Internet at [email protected]. Readers are considered a valuable source of court decisions, legal gossip and information from around the country, all of which is received with interest. Books, pro and con, are encouraged to be submitted for review, but they will not be returned. This column does not constitute legal advice but, rather, serves to inform readers of legal news, developments in cases and editorial comment about legal developments and trends. Readers who believe anything reported in this column might impact them should contact their personal attorneys.
