Court rules sheriff lied about Backpage, orders injunction in favor of website

30 Nov 2015

In a strongly worded opinion that accused Cook County (Illinois) Sheriff Thomas J. Dart of lying, and of intimidating Visa and MasterCard in a bid to put Backpage.com out of business, a federal appeals court today ruled that Dart violated the company’s First Amendment rights and ordered him to stop.

The 3-0 opinion written by Judge Richard Posner overturned a ruling by district Judge John J. Tharp Jr., and required Tharp to issue a permanent injunction against the sheriff. Dart will be required to “take no actions, formal or informal, to coerce or threaten credit card companies … with sanctions intended to ban credit card or other financial services from being provided to Backpage.com.”

“The Sheriff of Cook County, Tom Dart, has embarked on a campaign intended to crush Backpage’s adult section — crush Backpage, period, it seems — by demanding that firms such as Visa and MasterCard prohibit the use of their credit cards to purchase any ads on Backpage,” Posner wrote. “If all the sheriff were doing to crush Backpage was done in his capacity as a private citizen rather than as a government official (and a powerful government official at that), he would be within his rights. But he is using the power of his office to threaten legal sanctions against the credit-card companies for facilitating future speech, and by doing so he is violating the First Amendment … .”

Backpage is known as the leading site in the U.S. for “adult services” ads, which are often fronts for prostitution.

The ruling stemmed from a letter Dart sent in June to Visa and MasterCard urging them to stop processing payments for Backpage, and threatening them with potential criminal liability if they did not. Within days, both companies stopped handling payments for Backpage, which shortly afterward sued Dart. The company still has a claim for damages pending against Dart.

Posner said Visa and MasterCard were “victims of government coercion” when they stopped handling Backpage fees, adding “it is unclear that Backpage is engaged in illegal activity, and if it is not then the credit card companies cannot be accomplices and should not be threatened as accomplices by the sheriff and his staff.”

The ruling also noted that an internal email at Visa said Dart was engaging in “blackmail” by threatening the company with exposure at a news conference if it did not stop processing payments for Backpage.

The ruling, which could be appealed to a full 29-judge panel of the appeals court or to the U.S. Supreme Court, noted that Dart sued Craigslist in 2009 and lost.

“The suit against Craigslist having failed, the sheriff decided to proceed against Backpage not by litigation but instead by suffocation, depriving the company of ad revenues by scaring off its payments-service providers. The analogy is to killing a person by cutting off his oxygen supply rather than by shooting him,” Posner wrote.

“In his public capacity as a sheriff of a major county … Sheriff Dart is not permitted to issue and publicize dire threats against credit card companies that process payments made through Backpage’s website, including threats of prosecution … in an effort to throttle Backpage. … For where would such official bullying end, were it permitted to begin?”

In a statement after the ruling, Dart’s spokeswoman said his office was “not surprised by this opinion” but was disappointed. “We look forward to proceeding with this litigation and to doing all we can to protect victims from the horrors of human trafficking,” Dart’s office said.

The opinion is a great read, and generally devoid of legal-speak. It’s worth clicking through here.

Links to some of our earlier coverage:

https://aimgroup.com/2015/07/09/sheriffs-backpage-credit-cutoff-backfires-site-drops-charges-for-adult-services-ads/

https://aimgroup.com/2015/07/24/backpage-wins-round-1-against-sheriff/

https://aimgroup.com/2015/07/21/backpage-com-sues-sheriff-over-credit-card-flap/

https://aimgroup.com/2015/07/22/backpage-sues-cook-cty-sheriff/

 

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Peter M. Zollman

Peter M. Zollman brings more than 35 years of media experience to his role as founding principal of the AIM Group / Classified Intelligence Report. He has worked with a wide range of media companies, dot-coms, technology providers and start-ups to develop and expand successful interactive-media services. He is based in Altamonte Springs, Fla., near Orlando.