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United States v. Lacey

United States District Court, D. Arizona

January 7, 2020

United States of America, Plaintiff,
Michael Lacey, et al., Defendants.


          Honorable Susan M. Brnovich United States District Judge

         Pending before the Court is Defendants Motion to Dismiss Indictment Based on Section 230 of the Communications Decency Act or, Alternatively, as Void for Vagueness. (Doc. 783, “Motion”.) The Government responded, (Doc. 809, “Resp.”), and Defendants replied (Doc. 830, “Reply”). The Court has considered the pleadings and enters the following Order.

         I. BACKGROUND

         Defendants are former officers, executives, and employees of, a classified advertisement website specializing in “adult” services largely used as forums for soliciting prostitution.[1] (See generally Doc. 230, “SI”.) On July 25, 2018, a federal grand jury returned a 100-count Superseding Indictment against Defendants. (Id.) The Superseding Indictment alleges Defendants engaged in numerous criminal acts- conspiracy, violations of the Travel Act, and money laundering-while operating the website (“Backpage”).[2] Count 1 alleges Defendants “knowingly and intentionally” entered into a conspiracy, 18 U.S.C. § 371, to commit violations of the Travel Act, 18 U.S.C § 1952 (a)(3)(A), against all defendants. (SI ¶¶ 195-99.) Counts 2-51 allege Defendants:

“used the mail and any facility in interstate and foreign commerce with intent to otherwise promote, manage, establish, carry on, and facilitate the promotion, management, establishment, and carrying on of an unlawful activity, to wit: prostitution offenses in violation of the laws of the State in which they are committed and of the United States, including but not limited to [A.R.S.] Section 13-3214, and thereafter performed and attempted to perform, manage, establish, carry on, and facilitate the promotion, management, establishment, and carrying on of unlawful activity.”

(SI ¶ 201.) The fifty advertisements supporting Counts 2-51 market the sale of women or minors using coded-terms common to prostitution. (Id.) The ads specifically depict a range of prostitution-related business activities and transactions. Some of the ads depict specific victims, (Counts 2, 4-5, 12-17, 19-24), whose services were offered in multiple ads. (SI ¶¶ 160-76.) The Superseding Indictment alleges Defendants employed three distinct strategies to attract ads they knew were for prostitution. (SI ¶ 34.) Particularly relevant here, Backpage also created prostitution ads by copying content from other prostitution websites and then soliciting pimps and prostitutes by offering free trials. (SI ¶¶ 35-44.) Defendants created a business relationship with (“TER”), a “prostitution website” where clients, known as “johns”, could rate escorts. (SI ¶¶ 45-67.) Further, the Superseding Indictment outlines detailed moderation practices Backpage used to evade detection by law enforcement and create a “veneer of deniability.” (SI ¶ 13.) Among other techniques, Defendants stripped known prostitution terms from advertisements but allowed ads to be posted with the underlying message unchanged. Defendants, at various points, assisted known pimps and prostitutes in changing ads to avoid deletion by Backpage moderators. (SI ¶¶ 45-67.)

         Defendants previously argued this alleged conduct was consistent with traditional editorial functions protected by the First Amendment. (See generally Doc. 583.) Applying Section 230 of the Communications Decency Act (“CDA” or “§ 230”), 47 U.S.C. § 230, to the Superseding Indictment, Defendants now make a similar argument. That is, because § 230 immunizes publishers like Backpage from prosecution under all state criminal law, the Superseding Indictment fails to state an offense and should be dismissed pursuant to Federal Rule of Criminal Procedure 12(b)(3)(B)(v). (Mot. at 4-11.) Alternatively, Defendants claim the Travel Act, as applied by the Superseding Indictment, fails to give adequate notice of criminality, meriting dismissal of all counts as void for vagueness. (Id. at 11-13.)


         “An indictment is sufficient if it, first, contains the essential elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and, second, enables him to plead acquittal or conviction in bar of future prosecutions for the same offense.” Hamling v. United States, 418 U.S. 87, 117 (1974). Since federal crimes are “solely creatures of statute, ” Dowling v. United States, 473 U.S. 207, 213, 105 S.Ct. 3127, 87 L.Ed.2d 152 (1985) (internal quotation marks omitted), a federal indictment can be challenged on the ground that it fails to allege a crime within the terms of the applicable statute. United States v. Pirro, 212 F.3d 86, 91-92 (2d Cir. 2000). Accordingly, Federal Rule of Criminal Procedure 12 allows a defendant to file a pretrial motion to dismiss for failure to state a defense if the motion “can be determined without a trial on the merits.” Fed. R. Crim. P. 12(b)(3)(B)(v). Such a motion “is generally capable of determination before trial if it involves questions of law rather than fact.” United States v. Kelly, 874 F.3d 1037, 1046 (9th Cir. 2017) (quoting United States v. Nukida, 8 F.3d 665, 669 (9th Cir. 1993). An indictment must “set forth all the elements necessary to constitute the offense intended to be punished.” Hamling v. United States, 418 U.S. 87, 117 (1974) (quoting United States v. Carll, 105 U.S. 611, 612 (1882)). Therefore, when a count charged by an indictment fails to recite an essential element of the offense, that count is facially defective and must be dismissed. United States v. Pernillo-Fuentes, 252 F.3d 1030, 1032 (9th Cir. 2001). In determining whether an indictment charges a cognizable offense, courts are bound by the four corners of the indictment, must accept the truth of the allegations in the indictment, and cannot consider evidence that does not appear on the face of the indictment. United States v. Lyle, 742 F.3d 434, 436 (9th Cir. 2014); United States v. Boren, 278 F.3d 911, 914 (9th Cir. 2002); United States v. Jensen, 93 F.3d 667, 669 (9th Cir. 1996).

         Defendants Motion implicates two federal statutes-the CDA and Travel Act. Statutory construction “must begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose.” United States v. Albertini, 472 U.S. 675, 680, 105 S.Ct. 2897, 86 L.Ed.2d 536 (1985) (quoting Park ‘N Fly, Inc., v. Dollar Park & Fly, Inc., 469 U.S. 189, 194, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985)). “Due respect for the prerogatives of Congress in defining federal crimes prompts restraint in this area, where we typically find a narrow interpretation appropriate.” Dowling, 473 U.S. at 213, 105 S.Ct. 3127 (internal quotation marks omitted).


         Defendants claim immunity from prosecution in the manner charged by the Superseding Indictment. That is, § 230 of the CDA grants publishers of third-party content, like Defendants here, immunity from violations of state criminal laws. (Mot. at 4) Specifically, § 230 grants immunity to interactive computer services for liability based on publishing third-party content or for failing to remove any such content, regardless of whether the website knew or should have known that third parties were posting illegal content. (Id.) Defendants argument is straightforward: Section 230 preempts all state criminal laws; the instant Travel Act charge is based on violation of underlying state criminal laws prohibiting prostitution; Thus, § 230 precludes prosecution in the manner charged. (Id.) Even if not precluded by § 230, Defendants contend the Travel Act charges are impermissibly vague and merit dismissal on that basis alone. (Mot. at 11.) Both arguments fail.

         a. Does the CDA preclude Travel Act charges?

         i. Section 230 of the ...

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