It's already taken thousands of hours and millions of dollars, but David Boies is determined to hold Backpage.com accountable for sex trafficking children.

“This is one reason I became a lawyer,” Boies in an interview said of his firm's commitment to large-scale pro bono—and his willingness to donate his time (he reportedly charges $2,000 an hour) to the cause.

In early April, the feds seized the Backpage website and brought a 93-count indictment against the company, two of its founders, and five other shareholders and employees for charges including the promotion of prostitution and money laundering.

But Boies Schiller Flexner was there first, waging war against Backpage for the past two years. On Monday, Boies and firm lawyers including partners Karen Dyer and Karen Chesley and co-counsel from nonprofit Legal Momentum filed a 73-page amended complaint in U.S. District Court for the Middle District of Florida.   

The feds have already accomplished his top goal: Shut Backpage down. But Boies believes civil litigation has an important role in compensating victims and discouraging new websites from filling the void.

“Now what we're trying to do is to establish the principle that when an individual or company engages in this kind of conduct, they're going to be held responsible,” he said.

Many before have tried and failed to hold Backpage liable in civil suits. Courts in California, Washington, Tennessee, New Jersey and Missouri have struck down attempts to censor the website, which has allegedly earned more than $500 million in prostitution-related revenue since its creation in 2004, according to the indictment.

The company and its lawyers from Davis Wright Tremaine have argued that Backpage is simply a publisher of third-party created ads, and its core activity is protected by the First Amendment

But Boies—who will personally handle any courtroom arguments—is confident his case will be different.

The initial complaint was dismissed by U.S. District Judge John Antoon II on March 31, but the judge nonetheless held that Backpage's attempt to claim immunity under the Communications Decency Act could not be resolved on a 12 (b)(6) motion to dismiss for failure to state a claim.

The amended complaint addresses the shortcomings Antoon flagged. Namely, it adds a second Jane Doe, a 15-year-old girl, who over the course of two weeks in 2016 was allegedly sold and raped multiple times as the result of an ad placed on Backpage.com. The suit also adds her mother, who in a novel move claims loss of consortium, which Florida law recognizes between a parent and child.

In addition, the suit adds RICO and 13th Amendment claims—another newl strategy against Backpage.

The plaintiffs also still include Florida Abolitionist, an anti-trafficking organization based in Orlando, and Jane Doe, who said she was sold and raped five times in 12 hours after being advertised on Backpage.com. Antoon previously held both had standing to sue.

“We've always believed that properly litigated, Backpage could be held accountable,” Boies said. After scrutinizing prior holdings in other jurisdictions, “We believed we could bring a case that fit the more restrictive criteria those court opinions identified,” he said. Moreover, he aims to “convince courts that these very restrictive opinions do not reflect the existing statutes.”

They'll get help from a brand-new law, known as FOSTA-SESTA, which was signed into law on April 11. The Allow States and Victims to Fight Online Sex Trafficking Act amends Section 230 of the Communications Decency Act to limit its safe harbor provision for web publishers that knowingly assist or support sex trafficking.

The firm's complaint details damning instances of how Backpage reviewed—and sometimes edited—ads prior to publication.

“Traffickers were coached to use deliberately misspelled code words such as 'high schl' and 'brly legal' rather than words that would explicitly state that a child being trafficked is under 18. As defendants knew and intended, traffickers and their clientele understood that 'high schl' and 'brly legal' were code words for a child under 18,” the complaint states.

The result was ads that looked like this: “3 juicy wet kitties ready to be played with as we rotate around we please you with warming attitudes and open minded decisions were everything you been looking for.”

For Boies, it is the trafficking of children that is especially heartbreaking.

“This is something that destroys lives and families,” he said. “Sex trafficking is not just a problem in foreign countries. It's a problem here in the U.S., where hundreds of thousands of children every year are sex trafficked. … One of the most important areas from our perspective is how we need to protect the most vulnerable members of our society.”

 

Judge Halts 'Massively Conflicted' Xerox/ Fuji Merger

Lawyers from King & Spalding scored a huge win on Friday when a New York judge took the rare step of enjoining the pending merger between Xerox Corp. and Fujifilm Holding Corp., as well as forcing the company to waive its advance notice rules for electing new board members.

“This transaction was largely negotiated by a massively conflicted CEO in breach of his fiduciary duties to further his self-interest, and approved by a board, more than half of whom were perpetuating themselves in office without properly supervising Xerox's conflicted CEO,” wrote Manhattan State Supreme Court Justice Barry Ostrager, pulling no punches.

King & Spalding's Israel Dahan, Richard Marooney Jr., Peter Isajiw and Robert Meadows represent Xerox's third-largest shareholder, Darwin Deason, who has a $600 million investment in the company. Xerox's largest shareholder, Carl Icahn, is sharing the cost of litigating the case. Certain pension funds shareholders are also on their side.

Xerox is represented by Paul, Weiss, Rifkind, Wharton & Garrison litigators Jay Cohen, Claudia Hammerman and Jaren Janghorbani.

I wrote about the case a few weeks ago. In a 746-page submission, the King & Spalding team attacked the deal as thoroughly rotten—bolstered by an evaluation of the merger by legal giant John Coffee, a professor at Columbia Law School, who called the transaction “strange and irregular” with terms that are “virtually unknown.”

A key problem: The Xerox board in the summer of 2017 decided Xerox CEO Jeff Jacobson “was not the right person to lead Xerox into the future.” They even chose his replacement, Giovanni “John” Visentin, a former IBM and HP executive, who was supposed to start work in December.

But shortly before that happened, Jacobson, with the apparent blessing of Xerox Chairman Robert Keegan, negotiated a deal where Fuji would acquire a 50.1 percent controlling interest in Xerox—without any payment to Xerox shareholders. Jacobson would get to stay on as CEO of the new company, and five Xerox board members would keep their seats as well.

“The lynchpin of this court's decision turns on the conduct of Xerox CEO Jeff Jacobson in the time frame preceding the board's approval of a transaction that granted control of an iconic American company to Fuji without any cash payment by Fuji to Xerox shareholders, and the board's acquiescence in Jacobson's conduct,” Ostrager wrote. “It is simply counter-intuitive and not credible to the court that Jacobson was not conflicted with respect to his dealings with Fuji on behalf of Xerox.”

The judge also found claims that board members breached their fiduciary duties and that Fuji aided and abetted this breach are also likely to succeed on the merits.

Ostrager gave Deason 30 days to propose a new slate of directors, calling it “a fair and logical way to provide Xerox shareholders with choices relating to the proposed transaction.”

 

Judd v. Weinstein

A team from Gibson, Dunn & Crutcher led by Ted Boutrous sued Harvey Weinstein in Los Angeles Superior Court on Monday on behalf of actress Ashley Judd, alleging defamation, sexual harassment, interference with prospective economic advantage, and violations of California's Unfair Competition Law.

Read the complaint here.

 

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