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`Case 2:18-cr-00422-SMB Document 793 Filed 10/24/19 Page 1 of 23
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`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF ARIZONA
`
`United States of America,
`
`
`Plaintiff,
`
`
`v.
`
`Michael Lacey, et al.,
`
`
`Defendants.
`
`No. CR-18-00422-001-PHX-SMB
`
`ORDER
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`
`
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`
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`
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`The issue before the Court is Defendants Michael Lacey, James Larkin, Scott Spear,
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`and John Brunst’s Motion to Dismiss Indictment. (Doc. 561, “Mot.”). Codefendants
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`Andrew Padilla and Joye Vaught joined the Motion. (Docs. 615, 617). The Government
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`filed a Response. (Doc. 649, “Resp.”). Lacey, Larkin, and Spear filed a reply. (Doc. 697).
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`Brunst separately filed a reply. (Doc. 700). Various groups also motioned for leave to file
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`amici curiae briefs, which the Court granted.1
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`I.
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`BACKGROUND
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`On July 25, 2018, a federal grand jury returned a 100-count superseding indictment
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`against Defendants alleging they engaged in criminal acts while operating the website
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`Backpage.com (“Backpage”). The charges include conspiracy, violations of the Travel
`
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`1 The DKT Liberty Project, Cato Institute, and Reason Foundation submitted a brief in
`support of the motion to dismiss the indictment. (Doc. 624). The ACLU of Arizona
`submitted an Amicus Curiae Brief Regarding First Amendment Considerations. (Doc.
`625). Equality Now, Legal Momentum, Sanctuary for Families, United Abolitionists, Inc.,
`and National Coalition against Domestic Violence submitted a brief in support of the
`Government. (Doc. 641).
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`Case 2:18-cr-00422-SMB Document 793 Filed 10/24/19 Page 2 of 23
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`Act, and money laundering. (Doc. 230, the “SI”). This is one of multiple cases involving
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`Backpage. In another case before this Court, Backpage itself (the corporate entity) and
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`related entities have pleaded guilty to Money Laundering Conspiracy, 18 U.S.C. § 1956(h).
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`(CR-18-465-PHX-SMB, Docs. 8, 10, 20). In still another, the CEO of Backpage, Carl
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`Ferrer has pleaded guilty to Conspiracy, 18 U.S.C. § 371. (CR-18-464-PHX-SMB, Docs.
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`7, 12, 20). Both of those cases are awaiting sentencing and forfeiture proceedings.
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`The first count in the SI is conspiracy, 18 U.S.C. § 371, to commit a violation of the
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`Travel Act, 18 U.S.C. § 1952(a)(3)(A), against all defendants. (SI ¶¶ 195–99). Counts 2–
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`51 are violations of the Travel Act, 18 U.S.C. § 1952(a)(3)(A), against all defendants. (SI
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`¶¶ 200–01). Count 52 is conspiracy to commit money laundering, 18 U.S.C. § 1956(h),
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`against Lacey, Larkin, Spear, Brunst, and Hyer. (SI ¶¶ 202–03). Counts 53–62 are charges
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`for concealment money laundering, 18 U.S.C. § 1956(a)(1)(B)(i), against Lacey, Larkin,
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`Spear, Brunst, and Hyer. (SI ¶¶ 204–05). Counts 63–68 are charges of international money
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`laundering, 18 U.S.C. § 1956(a)(2)(A), against Lacey, Larkin, Spear, Brunst, and Hyer.
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`(SI ¶¶ 206–07). Counts 69–99 are charges of transactional money laundering, 18 U.S.C. §
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`1957(a).2 (SI ¶¶ 208–09). Finally, Count 100 is a charge of international concealment
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`money laundering, 19 U.S.C. § 1956(a)(2)(B)(i), against Lacey. (SI ¶¶ 210–11). One
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`defendant in this case, Dan Hyer, has pleaded guilty to Count 1 and awaits sentencing.
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`(Docs. 270, 284, 520).
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`1. The Alleged Facts
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`
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`At this stage of the proceedings, the Court must “accept the truth of the allegations
`
`in the indictment in analyzing whether a cognizable offense has been charged.” United
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`States v. Boren, 278 F.3d 911, 914 (9th Cir. 2002). The Court does “not consider evidence
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`not appearing on the face of the indictment.” United States v. Jensen, 93 F.3d 667, 669 (9th
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`Cir. 1996) (quoting United States v. Marra, 481 F.2d 1196, 1199 (6th Cir. 1973)). Further,
`
`
`2 The defendants for each count of transactional money laundering are designated by a table
`in the SI that includes the transaction at issue and which defendant or defendants are
`charged in connection to that transaction. Lacey, Larkin, Brunst, and Spear all appear as
`defendants in the table.
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`Case 2:18-cr-00422-SMB Document 793 Filed 10/24/19 Page 3 of 23
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`Defendants “may not properly challenge an indictment, sufficient on its face, on the ground
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`that the allegations are not supported by adequate evidence.” Id. (quoting United States v.
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`Mann, 517 F.2d 259, 267 (5th Cir. 1975)). The proper forum for challenging whether there
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`is adequate evidence is at trial. See id. (“By basing its decision on evidence that should
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`only have been presented at trial, the district court in effect granted summary judgment for
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`the defendants. This it may not do.”); see also United States v. Critzer, 951 F.2d 306, 307
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`(11th Cir. 1992) (“Nor do the [criminal] rules provide for a pre-trial determination of
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`sufficiency of the evidence.”). Accordingly, the below summary of relevant facts is
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`assumed as true for the purpose of this motion.
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`The SI contains a lengthy summary of the alleged facts. Lacey, Larkin, and a third
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`individual known as “C.F” created Backpage in 2004. (SI ¶ 2). Spear and Brunst had
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`executive positions at Backpage or related entities and held ownership interests. (SI ¶¶ 3–
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`4). Padilla and Vaught were employees of Backpage, with Padilla serving as operations
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`manager and Vaught as assistant operations manager. (SI ¶¶ 6–7). Lacey, Larkin, Spear,
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`and Brunst “purportedly” sold their interests in Backpage in 2015, but retained “significant
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`control” afterward. (SI ¶¶ 2, 29). They sold their interests in Backpage to Dutch entities
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`controlled by C.F., who “borrowed” most of the purchase price from Lacey, Larkin, Spear,
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`and Brunst. (SI ¶ 30). Even after the sale, Lacey, Larkin, Spear, and Brunst retained
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`significant control over Backpage, including its finances, and required C.F. to provide them
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`with an annual accounting of his personal assets. (SI ¶ 31).
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`Lacey and Larkin are the founders of the Phoenix New Times newspaper and owned
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`several other newspapers, including the Village Voice. (SI ¶ 18). They created Backpage
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`as an online classified ad site that competed with the likes of craigslist.com (“Craigslist”).
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`(SI ¶¶ 20–21). When Craigslist shut down its “adult” section in 2010, Backpage began
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`implementing strategies to capture Craigslist’s share of the market. (SI ¶ 24). Larkin noted
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`in one internal document that Craigslist folding could mean “a deluge of adult content ads
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`for backpage.com.” (Id.). Financially, Backpage was very successful. In its own words,
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`it was experiencing “explosive growth” by “capitalizing on displaced Craigslist ad
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`Case 2:18-cr-00422-SMB Document 793 Filed 10/24/19 Page 4 of 23
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`volume.” (SI ¶ 25). Backpage profits grew annually: $26 million in 2010, over $52 million
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`in 2011, over $78 million in 2012, over $112 million in 2013, and over $134 million in
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`2014. (SI ¶¶ 25, 28).
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`The SI alleges that all defendants “were aware that the overwhelming majority of
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`the website’s ‘adult’ and ‘escort’ ads were actually ads for prostitution.” (SI ¶ 34). The SI
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`points to three strategies Backpage used to attract more prostitution ads. (Id.). It refers to
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`them as content aggregation, reciprocal link and affiliate programs, and moderating ads to
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`“sanitiz[e]” them. (SI ¶ 34).
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`The SI describes Defendants’ aggregation efforts in paragraphs 35–44. It alleges
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`Spear encouraged Hyer and C.F. to create a plan to move prostitution ads onto Backpage.
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`The plan was to “identify prostitutes advertising other websites,” contact the prostitutes,
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`and create free trial ads for them if they were not already using Backpage. First tested in
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`Dallas, Texas, this strategy became known as the “Dallas aggregation” plan soon spread to
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`other locations. Spear, Hyer, Larkin, C.F., and Brunst are alleged to have been aware of
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`this strategy through emails, email attachments, other documents, and meetings where the
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`plan was on the agenda.
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`The SI describes the “reciprocal link and affiliate programs” strategy in paragraphs
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`45–67.
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` It alleges Defendants sought
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`to create a business relationship with
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`TheEroticReview.com (“TER”), a “prostitution website” where “johns” could rate escorts.
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`Backpage paid TER for banner ads, and Hyer and C.F. saw TER as essential to business
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`growth. Google Analytics reports provided to Defendants also showed TER was the
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`number one source of outside referrals to Backpage. The “affiliate programs” alleged in
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`the SI involve partnerships with “organizations and individuals who were known to be
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`involved in the prostitution industry.” One such individual went by the name “Dollar Bill.”
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`Dollar Bill was described as a “super affiliate,” and Backpage once deleted over 4,000 ads
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`that he posted. Padilla helped him restore those ads. Emails show that Dollar Bill was
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`aware of Backpage’s moderation practices and C.F. coached him how to avoid deletion by
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`Backpage moderators.
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`The SI describes Backpage’s moderation practices in paragraphs 68–70, 72–73, 75,
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`77–96, 98–104, 108, 110, 112, 116–26, 128–30, 132–34, 136, 139, 143, 145, and 148. C.F.
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`explained the strategy: “We do not intend to be a craig[slist] here, just get out the most
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`egregious stuff.” Padilla emailed Hyer and C.F. that posters who repeatedly violated
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`Backpage’s posting rule would have their ads deleted and banned, though the bans were
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`only temporary and aimed at the “worst apples.” Another Padilla email cc’d Vaught and
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`threatened to fire any Backpage employee who acknowledged in writing that a customer
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`was a prostitute. Attachments to an October 16, 2010 email from Padilla to a large group
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`of Backpage employees, including Hyer and Vaught, explained how to moderate ads. The
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`instructions allowed nude and partially-nude photographs, some of which depicted graphic
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`sex acts. The other attachment identified fifty terms that should be “stripped” from ads
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`before publication. In another email, C.F. told Padilla to “lighten up on the images
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`moderation. Spear tells me it’s the text that is the problem.” In January 2011, Lacey and
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`Larkin met with representatives from the National Center for Missing and Exploited
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`Children (“NCMEC”) where Lacey told them “adult prostitution is none of your business.”
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`According to the SI, these moderation efforts were made not to stop the underlying
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`illegal activity, but to create a “veneer of deniability” and evade detection. (SI ¶ 13).
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`Defendants stripped coded terms they allegedly knew indicated prostitution or underage
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`prostitution—such as “GFE/Girlfriend Experience,” “Lolita,” and “New in Town”—from
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`ads but still posted them with their underlying message unchanged. The moderation
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`practices also allowed identification numbers from TER to be used and permitted pictures
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`with “nude rear shots” and “transparent wet panties.” A PowerPoint presentation created
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`by some defendants acknowledged the non-adult sections of Backpage existed to show
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`“plausible deniability” and make the website more palatable to “law enforcement.”
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`A large portion of the SI is dedicated to showing Defendants knew their efforts to
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`market to prostitution advertisers were successful. Spear received emails summarizing
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`these moderation practices. (SI ¶¶ 70, 73, 81). Larkin, Spear, Brunst, Hyer, and C.F.
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`received an email notifying them that Chase Bank would no longer process transactions
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`for Backpage because of Backpage’s “involvement in human trafficking.” (SI ¶ 135). C.F.
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`testified in a number of criminal trials of pimps who had used to Backpage to post
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`prostitution ads. (SI ¶¶ 71, 76, 92). C.F., Padilla, and Vaught helped one Backpage
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`customer, P.R., restore her prostitution ads after they were taken down. (SI ¶ 132). P.R.’s
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`ads included the phrase “50 Red Roses special.” “Roses” is a commonly-used in
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`prostitution to mean money. (SI ¶¶ 160–61). Lacey wrote a draft editorial claiming
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`Backpage had provided “the oldest profession in the world . . . transparency, record keeping
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`and safeguards” and acknowledging that Backpage used an automatic filter to remove
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`certain phrases from ads that indicated prostitution but still published the ads after editing.
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`(SI ¶ 107). Larkin forwarded the editorial to C.F. “cautioning against some of Lacey’s
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`statements ‘being made public’ because ‘we need to stay away from the very idea of editing
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`the posts.’” (SI ¶ 108).
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`The SI includes “victim summaries” of women who were sold for sex on Backpage.
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`(SI ¶¶ 160–176). Ads depicting Victims 5, 8, 10, 12, 11, 15, 17, 13, and 16 are among the
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`alleged ads in the indictment. (SI ¶ 201, Counts 2, 4–5, 12–17, 19–24). One ad by Victim
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`5 was rejected by Backpage because it listed her age as seventeen. It was accepted after it
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`was “simply resubmitted with a new (false) age of 19.” (SI ¶ 164). Victim 8 was fifteen
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`years old when her uncle and his friends posted ads on Backpage using terms indicative of
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`prostitution like “roses,” and “150 for 1/2 hour, 200 for full hour.” (SI ¶ 167). Victim 10
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`was seventeen years old when her pimp posted Backpage ads containing the phrase “NEW
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`IN TOWN” and pictures of her provocatively posed. (SI ¶ 169). Backpage occasionally
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`removed certain explicit photos from Victim 11’s ads but published the remaining text and
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`other provocative photos. (SI ¶ 170). Victim 12’s advertisements contained phrases such
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`as “New In Town” and “Sexy Dark Asian Bombshell with a Nice & Tight {Booty}.” (SI ¶
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`171). Victim 13 was a juvenile when she and her trafficker posted Backpage ads, which
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`falsely represented she was nineteen years old. At least once, a Backpage representative
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`contacted her with instructions on how to fix an ad so it could be published. (SI ¶ 172).
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`Victim 15 was sold for sex using phrases such as “Thick Glass of Chocolate Milk Looking
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`for a GoodTime!!!” and “sexy certified freak.” After her trafficker attempted to take her to
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`Texas against her will, she jumped out of the vehicle and was killed after being hit by
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`several vehicles on Interstate 10. (SI ¶ 174). Victim 16 was murdered by a customer after
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`she posted Backpage ads containing the phrases “outcalls only,” “Juicy Caramel Lady on
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`Duty,” and including provocative pictures. (SI ¶ 175). Victim 17 was sold for sex,
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`averaged ten customers a day, and was forced to turn over all of her prostitution earnings
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`to her pimp. An associate of her pimp took pictures of her and drafted Backpage ads with
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`the phrases “IN/CALLS ONLY,” “I’m here to make your wildest fantasies come true,” and
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`“Sorry, but NO BLACK MEN.” The ads included pictures of Victim 17’s buttocks and
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`face. (SI ¶176).
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`The SI’s factual allegations regarding money laundering appear in paragraphs 177–
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`194. They detail that most of Backpages’ earnings came from pimping and prostitution,
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`and that banks, credit card companies, and other financial institutions refused to do
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`business with Backpage because of its connection to prostitution. (SI ¶ 177–78, 182). C.F.,
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`Larkin, Spear, and Brunst discussed creating shell companies to fool credit card companies.
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`(SI ¶ 179). They utilized entities such as Posting Solutions LLC, Website Technologies
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`LLC, and Cereus Properties LLC. (SI ¶¶ 184–85, 187–92). They also used
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`cryptocurrencies. (SI ¶¶ 193–94).
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`The SI identifies fifty specific ads by date and description in paragraph 201. Fifteen
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`of the ads depict specific victims found in the victim summaries. Ten of the ads were
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`posted by P.R, the prostitute who had extensive communications with C.F. (SI ¶ 201,
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`Counts 3, 6–11, 18, 25–26). In the remaining twenty-five examples, Backpage published
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`ads containing “GFE.” (SI ¶ 201, Counts 27–51).
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`II.
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`LEGAL STANDARD
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`The Fifth Amendment demands that “no person be held to answer for “a capital, or
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`otherwise infamous crime” unless indicted by a Grand Jury. U.S. Const., amend. V. This
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`indictment “must be a plain, concise, and definite written statement of the essential facts
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`constituting the offense charged.” Fed. R. Crim. P. 7(c)(1). It is considered sufficient if it
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`“contains the elements of the offense charged and fairly informs a defendant of the charge
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`against which he must defend” and “enables him to plead an acquittal or conviction in bar
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`of future prosecutions for the same offense.” Hamling v. United States, 418 U.S. 87, 116
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`(1974). An indictment “should be read in its entirety, construed according to common
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`sense, and interpreted to include facts which are necessarily implied.” United States v.
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`Berger, 473 F.3d 1080, 1103 (9th Cir. 2007) (quoting United States v. King, 200 F.3d 1207,
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`1217 (9th Cir. 1999). Language of a statute may be used to describe the accused defense,
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`but it must be accompanied with enough “facts and circumstances” to “inform the accused
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`of the specific offence . . . with which he is charged.” Hamling, 418 U.S. at 117–18
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`(quoting United States v. Hess, 124 U.S. 483, 487 (1888)). “On a motion to dismiss an
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`indictment for failure to state an offense, the court must accept the truth of the allegations
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`in the indictment in analyzing whether a cognizable offense has been charged.” Boren,
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`278 F.3d at 914. An indictment cannot be challenged “on the ground that the allegations
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`are not supported by adequate evidence.” Jensen, 93 F.3d at 669 (quoting United States v.
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`Mann, 517 F.2d at 267).
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`The First Amendment provides additional protections in prosecutions based on
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`speech. See Ashcroft v. Free Speech Coalition, 535 U.S. 234, 244 (2002). But these
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`protections are not unlimited. “Congress is allowed to restrict certain types of speech,
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`including obscenity, defamation, fraud, incitement, and speech integral to criminal
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`conduct.” United States of America v. Sinneneng-Smith, 910 F.3d 461, 480 (9th Cir. 2018)
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`(citing United States v. Stevens, 559 U.S. 460, 468 (2010)). The government carries the
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`burden to show that the speech is unprotected. See Ashcroft, 535 U.S. at 255.
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`III. DISCUSSION
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`Defendants repeatedly argue that the government is pursuing a theory of vicarious
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`liability for merely hosting third party content. That argument is not supported by the SI,
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`which goes through a long and fact-specific description of the Defendants participation in
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`a conspiracy to facilitate and promote prostitution. The SI sufficiently explains why
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`defendants in this case are not just merely hosting third party content. Defendants also
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`Case 2:18-cr-00422-SMB Document 793 Filed 10/24/19 Page 9 of 23
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`argue that the SI is based entirely on the assumption that the advertisements are for illegal
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`activity. Again, Defendants ignore the specific facts alleged in the SI. While the SI does
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`contain some language that could support that accusation, it is replete with specific facts
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`that support finding that the conspirators knew the ads were for prostitution.
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`Defendants argue the SI should be dismissed for three reasons. First, they argue the
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`SI is deficient because it presumes the ads in the indictment are illegal, merely repeats
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`others’ accusations, attacks protected publisher functions, and attacks legal business
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`practices. Second, they argue SI fails to allege specific intent, which Defendants argue is
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`the required mens rea. Third, they argue the Travel Act is unconstitutional as applied in
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`the SI because the allegations are based on “generalized crimes” and conflict with the First
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`Amendment. The Court is unpersuaded by these arguments and will deny Defendants’
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`motion to dismiss the indictment.
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`1. The SI is not deficient.
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`a. The SI does not presume ads are illegal nor does it merely repeat others’
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`accusations.
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`Defendants first argue that the SI impermissibly presumes the alleged offending ads
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`are unlawful. “The Government may not suppress lawful speech as the means to suppress
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`unlawful speech.” Ashcroft, 535 U.S. at 255. In their view, Backpage was “an avenue of
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`expression of ideas and opinions” with First Amendment protections. (Mot. at 17) (quoting
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`Backpage.com v. Dart, 807 F.3d 229, 230 (7th Cir. 2015)). That is, because Backpage
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`contained at least some ads that were not for prostitution, the Government’s prosecution of
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`these defendants necessarily attacks protected speech unless it shows the speech at issue
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`was unlawful. See Dart, 807 F.3d at 234. The Government “bears the burden of proving
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`the constitutionality of its actions” when it restricts speech. United States v. Playboy Entm’t
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`Grp., Inc., 529 U.S. 803, 816 (2000); see Bd. of Trustees v. State Univ. of N.J., 492 U.S.
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`469, 480 (1989) (“[T]he State bears the burden of justifying its restrictions[.]”).
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`Here, taking the allegations in the SI as true, as the Court must, the Government has
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`met its burden of showing the fifty ads in the SI are for prostitution. Counts 3, 6–11, 18,
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`and 25–26 concern ads posted by P.R. The SI lays out P.R.’s history of working with C.F.
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`in detail. (SI ¶ 132). C.F. knew P.R.’s posts advertised prostitution, repeatedly allowed
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`P.R. to post those ads, and advised P.R. on how to meet Backpage’s publications standards.
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`P.R.’s ads contained a phrase indicative of prostitution, “50 red roses special,” and
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`Backpage moderators sometimes deleted her nude pictures. In emails to C.F., P.R.
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`complained that other ads had more nudity than her own. Vaught and Padilla also received
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`emails from P.R. They instructed another Backpage employee to “dig into” her difficulty
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`posting such pictures. P.R. posted ads through November 2015. Construing the SI in its
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`entirety according to common sense, the alleged facts sufficiently show that the ads posted
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`by P.R. were for prostitution.
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`The ads in Counts 27–51 contain the phrase “GFE.” The SI explains in multiple
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`paragraphs that GFE, short for “girlfriend experience,” is a “coded term for prostitution.”
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`At one point, GFE was temporarily banned from use in Backpage ads. Defendants Spear,
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`Hyer, Padilla, C.F., and Vaught exchanged emails discussing its use as a “code word” or a
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`“solid sex for money term[].” (SI ¶ 149). Dollar Bill once complained that Backpage
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`refused one of his ads even though “IT NEVER SAID GFE” while other, more obvious
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`prostitution ads had been published despite “saying GFE.” (SI ¶ 64). Backpage’s
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`moderators were instructed to stop removing ads containing “GFE” in or around January
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`2016, a decision Padilla and a moderator discussed and communicated to Vaught. (SI ¶
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`148). Again, taking the allegations in the SI as true, which the Court must, the SI’s alleged
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`facts sufficiently show the GFE ads were for prostitution.
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`Counts 2, 4–5, 12–17, and 19–24 depict ads of Victims 5, 8, 10, 11, 12, 13, 15, 16,
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`and 17. Victims 5, 8, 10 were “sold for sex, through the use of Backpage ads.” (SI ¶¶ 164,
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`167, 169–72, 174–76). Each of these ads, construed according to common sense, and
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`interpreted to include facts necessarily implied, and read in context of the entire SI, are ads
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`for prostitution. The ad in Count 2 depicted Victim 5 and was titled “Get freaky Tuesday.
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`. . Come spend ur day with us–19” and had accompanying text saying “Doin incalls and
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`outcalls.” Victim 8 was depicted in the ad for Count 4, titled “Puerto Rican mami in
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`Case 2:18-cr-00422-SMB Document 793 Filed 10/24/19 Page 11 of 23
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`Walpole area INCALLS—19.” A similar ad depicting her makes up Count 5. The ads
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`depicting Victims 10 and 12 (Counts 12–15) contained the phrase “New In Town,” a
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`“coded phrase used by pimps who shuttle children to locations where they do not know
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`anyone and cannot get help.” (SI ¶ 13). Victim 11 was featured in ads titled “Upscale
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`Independent BRUNETTE BOMBSHELL 5-Star Fantasy—26” and “Alexis Foxx the
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`HOTTEST in town!!!!!—26” (Counts 16–17). Victim 15 and 17’s ads, among other
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`suggestive text, included a disclaimer that by contacting them, prospective customers
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`agreed they were not affiliated with law enforcement (Counts 19–21). Victim 17 offered
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`in/calls only (Counts 21–22). Victim 13’s ad included prices for particular services: “I do
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`half hour sessions that vary in donation prices, 80 for head, 120 for hooking up without
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`head and 150 for hooking up with head” (Count 23). Victim 16’s ad offered “Outcalls
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`Now Freaky Curvy Caramel Lady OUTCALLS NOW—23.”
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`Again, at this point of the proceeding, the Court must take the SI at its face. The
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`Government may eventually fail to prove the facts alleged in the SI, but, at this stage of the
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`proceeding, the Court cannot consider the adequacy of the evidence; that job is reserved
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`for the fact finder. The Court is convinced the factual allegations in the SI are sufficient to
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`show the ads were for prostitution.
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`Additionally, Defendants argue the SI’s use of government officials’ and others’
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`“accusations” against Backpage are improper. (Mot. at 18–19); see, e.g., (SI ¶ 74 (2010
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`letter from state AGs); SI ¶ 109 (letter from Seattle mayor); SI ¶ 111 (letter from National
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`Association of Attorneys General); SI ¶ 140 (amicus brief filed by NCMEC); SI ¶ 131
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`(ASU publication)). Defendants cite two previous cases Backpage was involved in for the
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`proposition that Courts have “rejected such ‘evidence’” in the past. (Mot. at 19); see
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`Backpage.com, LLC v. Cooper, 939 F. Supp. 2d 805 (M.D. Tenn. 2013); Backpage.com,
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`LLC v. McKenna, 881 F. Supp. 2d 1262 (W.D. Wash. 2012). Neither case stands for such
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`a proposition;3 even if they did, the SI contains enough factual information outside of these
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`3 In the portions of McKenna cited by Defendants, the district court analyzed a state statute
`under vagueness and overbreadth doctrines. 881 F. Supp. 2d at 1280–83. The Cooper court
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`Case 2:18-cr-00422-SMB Document 793 Filed 10/24/19 Page 12 of 23
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`“condemnations” to be sufficient.
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`b. The SI does not attack protected editorial functions or protected business
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`advertising practices.
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`Defendants argue the SI attacks Backpage’s protected editorial judgment and
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`business advertising practices. The First Amendment protects “editorial control and
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`judgment.” Miami Herald Publ’g Co. v. Tornillo, 418 U.S. 241, 258 (1974). The First
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`Amendment also protects speech on the Internet. Reno v. ACLU, 521 U.S. 844, 870 (1997).
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`Defendants, however, are unable to overcome the alleged facts in the SI.4
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`The SI alleges Defendants participated in moderation not merely to edit, but to
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`“conceal the true nature of the ads being posted on its website.” (SI ¶ 11). When a post
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`advertised child prostitution, their “official policy” was to delete particular words in the ad
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`that indicated the child’s age and publish the revised version. (SI ¶ 13). This “only created
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`a veneer of deniability and helped Backpage’s customers (i.e., pimps trafficking children)
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`evade detection.” (SI ¶¶ 13, 78). Backpage permitted users to include TER ID numbers,
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`“just no live links.” (SI ¶ 85). In February 2011, Padilla responded to a request for
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`Backpage’s list of banned adult terms. Padilla then provided an Excel spreadsheet that
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`identified over “660 words or phrases that are indicative of prostitution, including an array
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`of terms that are suggestive of child prostitution (e.g., ‘Lolita,’ ‘fresh,’ ‘high school,’
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`‘tight,’ ‘young’). The spreadsheet explained that most such terms were simply to be
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`‘filtered’ from the ads in which they appeared.” (SI ¶ 95). The SI also alleges the “non-
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`adult sections” were simply intended to provide “plausible deniability” and to make the
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`website “defensible” and more palatable to law enforcement. (SI ¶ 112). A Backpage
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`discusses the September 2010 letter from state AGs, but held a state statute similar to the
`one in McKenna was likely unconstitutional under the overbreadth doctrine. 939 F. Supp.
`2d at 815–16, 831–32. Neither considered the sufficiency or use of the contested
`statements.
`4 Defendants also argue the SI’s allegations are not supported by underlying documents.
`Again, per Boren and Jensen, supra, the Court takes the allegations on their face and does
`not consider the adequacy of the evidence when reviewing whether an indictment is
`sufficient.
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`Case 2:18-cr-00422-SMB Document 793 Filed 10/24/19 Page 13 of 23
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`training document specifically instructed Backpage moderators not to remove photographs
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`of a person who looks like a minor, unless the ad also contained a banned term. (SI ¶ 143).
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`The training manual instructed moderators to allow phrases like “99% CUM BACK FOR
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`MORE,” “car service,” and “lollipop special.” (SI ¶ 143). Backpage also taught customers
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`how to word their ads to avoid moderator restrictions. (SI ¶ 59–67).
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`The cases Defendants rely on do not persuade the Court that the above practices
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`alleged in the SI were merely traditional, editorial functions. First, many of the cases were
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`decided under the Communications Decency Act (“CDA”), which grants immunity from
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`civil liability to “interactive computer service” providers when information on its service
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`originates from “another information content provider.” 47 U.S.C. § 230(c); see Barnes v.
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`Yahoo!, Inc., 570 F.3d 1096, 1105 (9th Cir. 2009) (“To summarize, we hold that section
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`230(c)(1) bars Barnes’ claim, under Oregon law, for negligent provision of services that
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`Yahoo undertook to provide”); Green v. Am. Online (AOL), 318 F.3d 465, 469–71 (3d Cir.
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`2003); Zeran v. America Online, Inc., 129 F.3d 327, 330 (4th Cir. 1997) (“By its plain
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`language, § 230 creates a federal immunity to any cause of action that would make service
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`providers liable for information originating with a third-party user of the service.”); Jones
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`v. Dirty World Entm’t Recordings LLC, 755 F.3d 398, 407 (6th Cir. 2014); Batzel v. Smith,
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`333 F.3d 1018, 1026–30 (9th Cir. 2003) superseded by statute on other ground as
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`recognized in Breazeale v. Victim Serv., Inc., 878 F.3d 759 (9th Cir. 2017); Doe v.
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`Backpage.com, LLC, 104 F. Supp. 3d 14