Where Angels Fear to Tread – The Dangers of Asserting Unfair Competition Claims Involving 2257 Compliance

September 6, 2011

“Those who live in glass houses should not throw stones.” Although trite, this saying is particularly applicable to participants in the contemporary adult entertainment industry.  Invoking criminal laws designed to break the backs of adult business entrepreneurs as a basis for gaining legal leverage in intra-industry commercial disputes can be dangerous business.  This concern arose recently in the lawsuit filed by Ventura Content, Ltd. (i.e. Pink Visual) against Motherless.com, a “tube” site.[2]  Ventura further claims that consumers are lured to the motherless.com site because of its (false) claims of 2257 compliance, and because its content is free.[4]

Those of us who have been involved with the adult industry since the 1980’s can attest that the industry has consistently been fighting the validity and enforcement of Section 2257 for decades.  Countless hours of manpower, brain power, volunteerism, and legal work, have gone into multiple lawsuits and lobbying efforts, all designed to rid the world of the unfair and unconstitutional burdens imposed by Section 2257.  This law costs both content producers and webmasters millions of dollars in compliance efforts and legal advice on a yearly basis.  Drafted by Congress as a knee-jerk reaction to the Traci Lords scandal of the early 90’s, Section 2257, even if fully complied with,[6]  This article is not designed to outline the many constitutional defects with Section 2257 – that has been done time and time again, in numerous, well-written complaints and legal briefs filed by industry representatives.  Nor is this article designed to cast aspersions upon Ventura as a company.  In fact, this author has pointed out in the past that Pink Visual, in particular, is remarkably visionary in its approach to adult content delivery.[8]  Unless the FSC happens to catch a break in its appeal to the Third Circuit, few barriers to ultimate enforcement of the statute now exist.  Politically, we could be headed for an ultra-conservative new GOP President, House and Senate – all with the adult industry squarely in its sights.  While it has been years since any 2257 inspections have occurred, the statute could be enforced with a vengeance given the slightest shift in political winds.  The Department of Justice can go back several years in determining whether a producer or distributor was in compliance, and is thus not limited to investigating the current compliance regime in place by a potential target.  Therefore, even if companies are in compliance today, they remain at legal risk if their compliance methods fell short in the past few years.

Despite this precarious environment, Ventura initiated a lawsuit against motherless.com which provides implicit validity to Section 2257, and which can be misused by the opponents of the adult industry.  Moreover, Ventura seeks to enlist the help of the federal court in enforcing Section 2257 against the website defendant and shutting it down for its alleged failure to fully comply with the records keeping and labeling requirements.  Again, such claims pre-suppose the validity of 2257, which (as noted above) the industry has been fighting for decades.  Ventura already claims to have recorded numerous instances of copyright infringement against motherless.com, so the additional benefit of including this delicate and potentially dangerous “unfair competition” claim, under California law, seems – at a minimum – questionable.   The author fully acknowledges that content producers have the right to fight piracy, and lawyers have the right to use all legal tools at their disposal to vindicate their client’s interests.  But, from the perspective of a First Amendment lawyer, signing a complaint that seeks to force any party to comply with Section 2257 – under the pain of court-imposed censorship, would present a significant quandary.  That’s a little too close to the DOJ’s job for comfort, in this author’s view.  Moreover, if Ventura wins, any such ruling could create substantial vulnerability for other online service provider websites that rely on the same statutory 2257 exemptions as tube sites for their operations – such as adult dating sites, online escort sites, adult forums, and adult review sites.  Ventura could win its battle against motherless.com, yet help lose the 2257 war for the industry.  There could also be a domino effect on related protections from civil liability afforded to online service providers, such as those found in Section 230,[10]  Notably, the 2257 exemptions at issue in this case are directly tied to Section 230’s immunity concept.  See, 28 C.F.R. § 75.1(4)(v).  In this author’s opinion, the risks for other service providers, and even for other content producers, is just too high to justify the limited additional leverage that inclusion of this claim accomplishes.  However, there is admittedly room for disagreement on this issue.  Given the problems that content producers have encountered with getting piracy under control, there is no perfect answer here.

While many content producers maintain a little-publicized, symbiotic relationship with tube sites, whereby the sites are allowed to seed certain levels of content for promotional purposes; there is no indication that such was the case between Ventura and motherless.com.  Accordingly, if Ventura was truly the victim of online piracy by motherless.com, as alleged in the Complaint, its outrage and demand for legal justice is understandable.  But converting the desire to enforce one’s intellectual property rights into a demand that an adult website be shut down by a federal court for failure to comply with Section 2257 is what generates the discomfort.   My recommendation, for what it’s worth; go after the pirates for intellectual property infringement until the cows come home, but leave Section 2257 enforcement to the  Department of Justice; it has already accepted the job of making life difficult for the adult industry.