DC Circuit Blocks Judge's Order Against Backpage, CEO Was Arrested on Sex Trafficking
The U.S. Court of Appeals for the D.C. Circuit temporarily blocked a federal judge's order that would have required online classified advertiser Backpage.com to produce some documents Monday to the Senate Permanent Subcommittee on Investigations. PSI has been engaged in an 18-month inquiry into online sex trafficking. The three-judge panel said Friday it issued the administrative stay of U.S. District Court in Washington, D.C., Judge Rosemary Collyer's Sept. 16 ruling because it needs more time to review the dispute. The D.C. Circuit's order "should not be construed in any way as a ruling on the merits" of Collyer's decision, it said. The order comes a day after CEO Carl Ferrer was arrested on felony charges of sex trafficking in Texas.
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Ferrer, 55, was arrested in Houston after arriving on an international flight, said Texas Attorney General Ken Paxton in a news release Thursday. A joint investigation with the California attorney general's office, which issued the CEO's arrest warrant, found evidence that adult and child victims were forced into prostitution through Backpage escort ads, it said. California AG Kamala Harris said in a separate news release that Ferrer was arrested "on felony charges of pimping a minor, pimping, and conspiracy to commit pimping." She said two controlling shareholders of Backpage, Michael Lacey and James Larkin, also were charged with conspiracy to commit pimping. Lawyers for Backpage didn't comment.
PSI Chairman Rob Portman, R-Ohio, and ranking member Claire McCaskill, D-Mo., said in a joint statement Thursday that they will continue to move ahead with their probe. They said it was the "first to uncover Backpage’s practice of editing ads in manner that serves to conceal evidence of criminality," which includes hundreds of reported sex trafficking cases, including child exploitation. "We certainly wish that Backpage had willingly cooperated," they added.
Yiota Souras, general counsel with the National Center for Missing and Exploited Children, told us it's important that for the first time criminal charges have been filed against Backpage, which is also embroiled in two civil lawsuits and the congressional inquiry. “For all those cases that are saying criminality can’t be excused but we can’t prove the criminality, the opening of a criminal front is incredibly significant for the other actions," she said Friday. But she said she doesn't believe the arrest will have a direct impact on the company's fight against the Senate subcommittee. She said it wasn't surprising the D.C. Circuit “hit the pause button” as it considers and drafts a decision.
PSI has been wrangling with Backpage and Ferrer for more than a year to turn over documents for the panel's investigation, while the company argued the congressional subpoena endangers the First Amendment rights for all online publishers (see 1603170042 and 1608170007). Collyer ordered Backpage, which also went to the Supreme Court for stays but was rebuffed, to turn over the subcommittee's demanded documents by Monday. She said Ferrer can't assert attorney-client privilege in refusing to hand over documents because he repeatedly failed to raise that privilege and waived it. In Backpage's Thursday brief (in Pacer) seeking an emergency motion for a stay, its lawyers said Collyer's order "demeans the attorney-client privilege, the most fundamental of the common-law privileges, and would improperly force litigants to choose between preserving this privilege and asserting Constitutional claims of basic importance."