Posts Tagged ‘Section 2257

25
Mar
14

Keeping Your Records Clean: Segregating 2257 Records under Federal Law

Performer ID’s? Check. 2257 form? Check. Model release? Check. Throw them all into a file or load them into a database and your legal tail is covered, right? Unfortunately, XXX law is never that simple, particularly when discussing compliance with federal regulations as applied to a highly regulated industry like adult entertainment.

 One of the most common mistakes our firm has seen over the years with section 2257 compliance is the inclusion of extraneous records in the 2257 file or database. The biggest offender always seems to be the model release, which is often kept alongside the 2257 form related to an individual performer. Logic would dictate that this is the proper procedure, and that all legal documentation associated with a performer should be maintained in the same place, at the risk of getting lost if separated. But alas, logic does not always inform obligations imposed by a federal statute. The applicable statutory provision appears in 28 C.F.R. § 75.2(e) which states: 

Records required to be maintained under this part shall be segregated from all other records, shall not contain other records, and shall not be contained within any other records.  

Seems pretty clear, right? But even well-known adult entertainment lawyers have become confused on occasion, and recommend including information or other evidence in a performer’s 2257 file beyond the specific categories of material required by the statute (e.g. “dress size, phone number,” handwriting sample, etc.). The specific items that should be contained in any producer’s 2257 files and/or database, is beyond the scope of this article, and more importantly, the subject of retained legal advice. However, given the clear dictates of federal law, commonly obtained documents such as model releases, payment/compensation information, or evidence of sobriety have no place in a 2257 file. Such information could certainly be kept separately to help defend against later claims by models seeking to remove their content, but never included in a 2257 record. But any recommendation regarding keeping such information in a 2257 file is simply dangerous.

Why would the Department of Justice require this segregation of 2257 records from other performer records? Was that provision included just to make compliance more difficult and catch producers in technical violations? Although, one’s inner conspiracy theorist cannot immediately dismiss such questions – particularly when a controversial issue such as adult entertainment is the subject of the regulation- the real answer is probably less incendiary and much more practical. The fact of the matter is that FBI inspectors simply do not want to sift through mounds of irrelevant business documentation to find the federally mandated information that is pertinent to their investigation. The 2257 inspections that have occurred thus far, typically involved the use of a device to copy the relevant files and/or database in order to facilitate the inspection process and avoid unnecessary governmental review of proprietary business information. Segregating the records into a single physical or electronic file allows for easy copying and examination by authorized federal agents, without permitting review of extraneous and possibly confidential business information.

Section 2257 is not the only federal statute that requires some form of records segregation. For example, federal drug regulations mandate that medical professionals and researchers authorized to handle controlled substances, must keep separate records pertaining to such substances. Various portions of HIPAA, specifically those pertaining to the privacy regulations of the Americans with Disabilities Act and the Family & Medical Leave Act, require that employers maintain employee medical records in separate files as well. Similarly, even psychotherapy notes and such related information must be segregated from other records under HIPAA privacy rules.

Some of the separation requirements are based on privacy concerns, such as those applicable to medical records, while others are focused on easing the burdens on inspectors (i.e., § 2257 and the controlled substances regulations).    Whatever the justification, it is clear that section 2257 requires that only the specific items required by the statute be included in the 2257 file/database. Unfortunately, before the adoption of this particular regulation in 2008 (effective in 2009), many 2257 forms circulated by XXX lawyers were included in, or comprised the first page of, the performer’s model release. Often, only one signature was obtained for both the model release and 2257 form. While this practice was certainly easier on the content producers and helped prevent inadvertent loss or misplacement of portions of a model’s legal documentation, this procedure is no longer permissible.

Unlike certain “grandfathering” provisions found in section 2257, such as those exempting content (created prior to March 18, 2009) depicting the “lascivious exhibition of the genitals or pubic area” of a person, the record segregation provision was effective immediately upon adoption. As a practical matter, that means content producers who were accustomed to maintaining extraneous documents (such as model releases) in their 2257 files were immediately obligated to clean out those files and separate any 2257 material from all other business records pertaining to the performer. Often this meant manually creating a new 2257 form or database from the data in the combined forms circulating prior to the adoption of 28 C.F.R. § 75.2(e). While this may sound unnecessary, particularly in an era when section 2257 is not being actively enforced, violations of this regulation still carry a potential five year federal prison sentence. Certainly this would be harsh punishment for content producers who happen to mix some extraneous performer information in their 2257 file. Notably, physicians have been carried away in handcuffs for failing to properly maintain controlled substances records in the proper format; this stands to reason that practically speaking, there is no difference between the two.

The good news is that segregating your business records from your 2257 records actually benefits the producer. A federal agent has no authority – and frankly no business – poring over documents containing proprietary business information, such as compensation details, exclusivity obligations, non-compete provisions, STD test results, or any other category of information not specifically authorized for review without a warrant under section 2257. Remember, FBI agents can enter a producer’s place of business without notice and demand to inspect 2257 records under penalty of federal prosecution. Producers of erotic content need not expose their entire business files to review by federal agents without a warrant, when such is not required by section 2257. Attempting to segregate 2257 records from other documents while the federal agents are waiting to conduct an inspection is not practical, and could arouse suspicion in the minds of the investigators.

An argument can also be made that producers have an affirmative obligation to protect the performer’s privacy rights, thus triggering the need to weed out sensitive performer documents from such files. In an age where privacy rights are dwindling at a rapid pace, every effort should be undertaken by producers of erotic content to demonstrate what is known in the law as a “reasonable expectation of privacy.” Failing to keep 2257 files clean and separate from all other business documentation could result in a waiver of important constitutional rights to privacy if produced to federal agents during a 2257 inspection. Without a warrant, the government’s prying eyes must be limited to only those minimal categories of information that producers are obligated to make available under federal law.

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28
Feb
14

2257 Abuse

Title 18, U.S.C. Section 2257 (“2257”) has long been a thorn in the side of content producers and webmasters in the adult industry, but now, the controversial statute is being utilized in ways never intended by the drafters of the legislation.  Purportedly created as an effort designed to prevent the proliferation of child pornography, 2257 has historically been used by the federal government as a tool to enforce producer compliance with its onerous record-keeping and labeling obligations designed to verify the age of models appearing in sexually-explicit imagery. Some records inspections have occurred by the Attorney General’s office, although actual prosecutions under the law have been essentially non-existent.  Recently, however, the statute is being adopted by litigants, industry participants, and governmental agencies as a sword wielded against adult businesses, instead of the protective shield it was meant to be.

A little over two years ago, the industry witnessed the first use of 2257 in a copyright battle between two adult businesses in federal court. In a lawsuit filed by Ventura Content, Ltd. (a.k.a. Pink Visual) against the tube site Motherless.com, the former alleged, among other claims, that Motherless failed to maintain performer records as dictated by 2257 and failed to post the mandated disclosure statement on its website. The requested relief? Ventura asked the court to shut down the tube site based, in part, on its failure to comply with 2257.

Although the ability to protect against copyright infringement is an essential goal in the adult industry, insiders using 2257 as a weapon to battle each other in court sets a dangerous and unsettling precedent. The DOJ’s enforcement of 2257 is intimidating enough, but the thought of a litigation strategy designed to shut down adult media for violations of the statute would add a layer of credibility to 2257 that threatens the industry’s challenges to the statute, and is ultimately self-defeating.

Much more recently, in November of 2013, a John Doe defendant asked a court to examine Malibu Media’s 2257 records in order to, essentially, invalidate their copyright infringement claims against him. Doe was accused of illegally torrenting 19 of Malibu Media’s copyright films and in turn, made the claim that if a film is not accompanied by adequate 2257 records, then it may not be validly protected under copyright. The case is currently still pending.

Although Doe’s attorney’s strategy may have been a bit of a long shot (as it would be impossible to know the status of plaintiff’s 2257 records short of inspecting them himself), the point is not necessarily whether these 2257 abuse tactics are working, the concern is that they are being employed at all. While these instances of using 2257 to buttress industry infighting are the most prominent, there have been others and the trend is disturbing.

The abuse of 2257 unfortunately doesn’t stop with adult industry participants and John Doe defendants, however. Recently, unconfirmed reports indicated that Cal/OSHA has been subpoenaing 2257 records for various adult content producers with an insidious and ulterior motive: busting the companies for violating the LA County ordinance colloquially known as Measure B, requiring condom usage in adults scenes shot within the county limits. According to these reports, Cal/OSHA obtained the 2257 records in order to ascertain dates and times of shoots – information that would necessarily be contained in the 2257 records.  Thus, the County would be able to confirm whether the producers are complying with Measure B and pulling the required permits. If it finds out they are not, Cal/OSHA can impose heavy fines. CAL/OSHA records do confirm that the companies are being investigated.   

It seems as though instead of simply maintaining records to ensure age verification, adult industry producers now need to worry about a slew of ancillary legal concerns relating to their 2257 compliance.  Any problems with a producer’s compliance regime could prevent them from enforcing their copyrights or result in an unfair competition claim by a ‘holier than thou’ company who claims perfect compliance.  The problem is: there is no perfect compliance.  The byzantine regulatory scheme created by Congress and the DOJ poses risks of technical violations for even the most diligent producer.  Any effort to give credence to an ill-conceived law like 2257 is, at a minimum, bad karma, and at most a tacit admission of the validity of the law.  My humble recommendation; leave 2257 out of the industry infighting, and adopt a cohesive position regarding the unconstitutionality of the burdensome federal statutory abortion we know as 2257. 

07
May
13

Dangerous Intersections

Can a webcam model also be a paid escort and an active member of a “hookup” dating site?  Naturally, the answer is “yes,” but at what costs?  Blurring the lines between these adult-themed user categories creates an uncharted hybrid of legal exposure for both the individual model/escort and those operating the associated websites.  However, more and more frequently we’re seeing this sort of crossover in the live webcam, escort, and casual dating industries.  Historically, escort sites have operated on the legal assumption that their advertisers do not engage in sexual activity for hire, but simply offer paid companionship services.  Live webcam operators routinely engage in sexual activity on cam, but are typically prohibited from any “real world” meetings with users, so as to avoid concerns with prostitution and solicitation.  Finally, adult dating sites have avoided prostitution-related issues based on the fact that they merely serve as a forum for social interaction, and should any sexual activity occur between users, it is not in exchange for money or anything of value. However, when the same individual acts as a webcam performer, an escort, and a hookup site user, these important legal distinctions and assumptions can start to break down.

Importantly, no law prohibits an escort from having a normal, romantic dating life, complete with sexual activity.  Similarly, live webcam models are not legally prohibited from offering companionship escort services, or submitting profiles to casual dating sites in search of an occasional tryst.  The legal danger arises in the not-so-rare scenario, linking all of these activities together in some way. For example, escorts who provide sexually explicit performances via webcam must be careful to separate any discussion of escort activities or reference to online escort profiles, to avoid sending the wrong message to users.  Without clearly distinguishing between webcam and escorting activities, the government will likely argue that any explicit webcam activity is indicative of the services the model might provide when acting as a paid escort.  Whether such argument would be successful in a court of law is another matter, but the risk exists.  Escorts should be similarly cautious when linking to any dating site profiles that reference sexual activity, so as to avoid conveying any misconception regarding the limited, non-sexual nature of the activities that the escort is willing to engage in during a paid session.

While compelling legal arguments can be made in support of the legality of live webcam sites, escort sites, and hookup sites, those legal arguments can be negatively impacted by linking such activities together in some manner. In a perfect world, escorts would never engage in sexual activity, webcam models would never meet users offline, and adult dating site participants would never be compensated for anything having to do with erotic interaction.  Unfortunately, however, reality is messy.  Escorts and webcam models do have social lives, and are entitled to engage in healthy sex lives, just like anyone else.  But as the escort, webcam, and adult dating business models become more popular and profitable, site operators will be forced to make difficult but important decisions regarding the extent to which any co-mingling of activity will be permitted or referenced on the site.

In the immortal words of The Offspring: “You gotta keep ’em separated.”  But with many operators permitting posting of user generated content with limited or no pre-publication review, along with real-time social network feeds, the ability of a site operator to control the intersection of these three areas of online adult entertainment can be challenging.  That said, pre-publication review of user posts/profiles creates its own set of complications, and may negatively impact the legal protections afforded to online service providers under federal statutes like Section 230, the DMCA, and Section 2257.  Thus, actively attempting to control linkage of these various activities could impact the site operator’s legal defenses to claims arising from the publication of this third-party content. Coherent operating policies should be adopted in connection with the publication of any such material, taking into consideration all of the factors.  However, given the serious legal consequences attached to the promotion of sexual activity for hire in the United States, site operators, escorts, and performers should be forewarned regarding these dangerous intersections. 

Update: The passage of FOSTA in April, 2018 has significantly impacted the legal issues addressed in this post.




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