Backpage.com and its Executives Named in Four New Lawsuits in Washington, California, Texas, and Alabama

The lawsuits are believed to be the first cases in the country where the company’s CEO and owners are named as defendants.

Four new lawsuits were filed today against the owners and operators of www.backpage.com, including the company’s CEO, Carl Ferrer, and two of the website’s long-time owners, James Larkin and Michael Lacey.

KEY DOCUMENTS

• Washington complaint:  R.O. v. Medalist Holdings, L.L.C., et. al, filed on January 25, 2017
• California complaint:  Jane Doe v. Medalist Holdings, L.L.C., et. al, filed on January 25, 2017
• Texas complaint:  Jane Doe v. Medalist Holdings, L.L.C., et. al, filed on January 25, 2017
• Alabama Complaint: K.R. v. Medalist Holdings, L.L.C., et. al, filed on January 25, 2017
• Watch:  Backpage.com Executives Plead Fifth Amendment in Response to Senate Questions (January 10, 2017)
• United State Senate Report, “Backpage.com’s Knowing Facilitation of Online Sex Trafficking,” published January 9, 2017
• Appendix to U.S. Senate Report (contains evidence cited by the Report), published on January 9, 2017
• Washington Supreme Court Decision Rejecting Backpage.com’s CDA Argument, published September 3, 2015
• Testimony from Former Backpage.com Employee Saying His Job Was to Sanitize Sex Ads, taken on August 2, 2016
• October 2010 Email from Carl Ferrer Stating Removing Sex Ads ‘Too Harsh’
• Backpage.com CEO Carl Ferrer Helps ‘Urban Pimp’ Post His Sex Ads (email sent on November 9, 2007)

The plaintiffs in each lawsuit allege they were teenager girls when they were sold for sex on the website by sex traffickers.  Two plaintiffs jointly filed suit in Washington, one plaintiff filed suit in California, one plaintiff filed suit in Texas, and one plaintiff filed suit in Alabama.

Jason P. Amala, a Seattle attorney who jointly represents four of the five girls, believes the four lawsuits are the first civil claims to be filed against Ferrer, Larkin and Lacey.  In the lawsuits, the girls allege that Ferrer, Larkin, and Lacey are liable because they knew they were profiting from illegal sex trafficking. On Tuesday, the three men appeared in court in California in response to 39 criminal counts for allegedly facilitating prostitution and sex trafficking.

Amala believes the lawsuits are the first cases to be filed since January 9, 2017, when the company purported to shut down the “escort” section of its website due to “censorship” by the United States government.  The “escort” section was shuttered within hours after the United States Senate issued a scathing report about the company’s alleged role in online sex trafficking.

The next day, Ferrer, Larkin, and Lacey appeared before a panel of U.S. Senators and refused to answer any questions.  Instead, each invoked their Fifth Amendment right against self-incrimination.  The men were joined by the website’s Chief Operating Officer, Andrew Padilla, and corporate counsel, Elizabeth McDougal, who also refused to testify and invoked the Fifth Amendment.

The defendants named in the lawsuits include a number of U.S. and foreign companies that were allegedly involved in running the website or were used to conceal its profits.  Some of the lawsuits allege the companies are liable because they profited from the website “even though [they] knew those profits were derived from illegal conduct.”

In response to prior lawsuits, the website has asserted it is immune from suit under a federal law known as the Communications Decency Act (“CDA”).  The CDA provides websites immunity from suit for content posted by third parties so long as the website does not help create or develop the content.  Websites also have immunity if they edit content, but only if the content is edited in good faith.

According to Amala, the four lawsuits are being filed now because of the Senate report:  “For years the website has publicly claimed they were trying to remove sex ads.  That was the company line, but the Senate report shows that was not true.  The report details how the website, at the direction of its top executives, was systematically editing sex ads to make it less obvious that they were for sex.  They then posted the sanitized sex ad for a fee and kept the profits.”

Some of the complaints cite internal company emails that the plaintiffs claim support their allegations.  In one, Ferrer said it would be “too harsh” to ban advertisements that contained words or images that indicated the ad was for sex.  Instead, Ferrer said it was “[b]etter to edit by removing bad text or removing bad language” so that users could “adjust.”

The complaints also quote from deposition testimony that Amala obtained from a former employee of backpage.com.  In his deposition, the former employee agreed that his job was “to basically sanitize ads for prostitution.”  The complaints allege that the employee “would then post the sanitized ad, even though he knew the ad was a person who was trying to sell sex for money.”

The plaintiffs allege they were advertised on the website at various times between 2013 and late 2015.  According to the Senate report, www.backpage.com generated $135 million in revenue in 2014, and the vast majority of that revenue was from sex ads.

Washington:  The Washington lawsuit was filed on behalf of two teenage girls who are identified as R.O. and K.M.  R.O. alleges she was 14 to 15 years old, and K.M. alleges she was 16 years old, when they were sold for sex on the website.  Each girls alleges she was sold for sex in the greater Seattle area.  R.O. alleges her ads appeared on the website from October 2014 until December 2015.  K.M. alleges her ads appeared in early 2015.  Both girls allege they were repeatedly sexually abused as a result of being advertised for sex on the website.

California:  The California lawsuit was filed on behalf of a teenage girl who the complaint identifies as “Jane Doe.”  Jane Doe alleges she was 15 years old when she was sold for sex on the website.  Jane Doe alleges she was sold for sex in Riverside County, California.  Jane Doe alleges her ads appeared on the website for weeks in August 2015.  Jane Doe alleges she was repeatedly sexually abused as a result of being advertised for sex on the website.

Texas:  The Texas lawsuit was filed on behalf of a teenage girl who identified as “J.M.”  In her complaint, J.M. alleges she was 15 to 16 years old when she was sold for sex on the website.  J.M. alleges she was sold for sex in Hawaii, but filed suit in Texas because Dallas, Texas, was the principal place of business for the website during the time she was abused.  In October 2016, authorities raided the Dallas offices of the website after its CEO, Carl Ferrer, was arrested.  J.M. alleges her ads appeared on the website from March 2015 through September 2015.  J.M. alleges she was repeatedly sexually abused as a result of being advertised for sex on the website.

Alabama:  The Alabama lawsuit was filed on behalf of a woman identified as “K.R.”  In her complaint, K.R. alleges she was 17 years old when she was sold for sex on the website.  K.R. alleges she was sold for sex in Houston County, Alabama.  K.R. alleges her ads appeared on the website between May 2013 and August 2013.  K.R. alleges she was repeatedly sexually abused as a result of being advertised on the website.

The four lawsuits are not the first lawsuits to be filed against the website.  In 2012, Amala and his law firm, in conjunction with Tacoma lawyer Erik Bauer, filed a separate lawsuit in Washington on behalf of three minor girls who allege they were sold for sex on the website in 2010.  The website moved to dismiss the case, citing the CDA, but the trial court denied the motion.  In October 2015, the Washington Supreme Court upheld the trial court’s decision and concluded the plaintiffs should be allowed to move forward with their case so they could try to prove their allegations that the website was actively involved in editing their ads.  That case is currently scheduled to begin trial in Pierce County, Washington, in May 2017.

Amala believes these are important test cases regarding the CDA:  “I am proud of our clients for standing up for themselves and for thousands of other women and children who were trafficked for sex through this website.  The website has gone to great lengths to conceal its involvement in sex trafficking, but the truth is finally coming out.  Congress did not intend to give immunity to a website that created an online marketplace for sex trafficking, let alone a website that actively sanitized sex ads under the cover of trying to prevent sex trafficking.”