Case Summary and Outcome

Backpage.com, a classified advertisement website contains an adult section, offering various sexual services, some possibly illegal. The Sheriff of Cook County, Illinois, in an attempt to shut down the website’s adult section sent a letter to Visa and MasterCard, demanding the companies to “immediately cease and desist from allowing credit cards to be used to place ads on websites like Backpage.com.”

Visa and MasterCard complied with the Sheriff’s demand and refused to process credit card transactions to purchase any ads on the website, including those for legal services. Backpage then filed a preliminary injunction against the Sheriff, but it was denied by the Northern District Court of Illinois. On appeal, the U.S. Seventh Circuit Court of Appeals found the Sheriff in violation of the website’s First Amendment right through “threatened imposition of government power or sanction” in an attempt to stifle protected forms of speech.

Facts

Backpage.com is an online advertisement platform, offering eleven different types of services, including adult services, some of which may include illegal activities, such as prostitution. Thomas Dart, the Sheriff of Cook County, Illinois, in an attempt to remove the website’s adult section, sent a letter to Visa and MasterCard, demanding the companies to “immediately cease and desist from allowing . . . credit cards to be used to place ads on websites like Backpage.com.” The letter said: “[I]t has become increasingly indefensible for any corporation to continue to willfully play a central role in an industry that reaps its cash from the victimization of women and girls across the world.” It further cited the federal money-laundering statute, 18 U.S.C. § 1956, implicating that credit card companies could be prosecuted for processing payments used to purchase illegal sexual activities, such as prostitution.

Despite the letter’s official tone, the Sheriff claimed that the letter was not aimed to threaten or force the credit cards companies into action, but that he was simply exercising his free speech and his negative opinion with Backpage as a private citizen.

Upon receipt of the letter, Visa and MasterCard complied with the Sheriff’s demand and refused to process credit transactions to purchase any ads on the website, including those for legal services. Backpage sought a preliminary injunction before the Northern District Court of Illinois to lift the ban. The court denied the injunction.

Backpage then appealed the decision to the U.S. Seventh Circuit Court of Appeals, alleging violation of its First Amendment right to free speech.

Decision Overview

Circuit Judge Posner delivered the Court’s opinion.

The main issue before the Court was whether the Sheriff’s demand to cease credit card transactions to purchase any ads on Backpage.com violated the website’s First Amendment right to free speech.

As a general rule, the Court first held that “[a] public-official defendant who threatens to employ coercive state power to stifle protected speech violates a plaintiff’s First Amendment rights, regardless of whether the threatened punishment comes in the form of the use (or, misuse) of the defendant’s direct regulatory or decision-making authority over the plaintiff, or in some less-direct form.” [p. 3]

The Sheriff argued that he merely attempted to convince the credit card companies. The Court disagreed. It first noted that the Sheriff had sued and lost a case against Craigslist.com to remove an adult section from its website, implying that the Sheriff knew that a legal action against Backpage was out of question. Indeed, he resorted to alternative means of forcing it to remove its adult section.

To show that the Sheriff acted in his official capacity, rather than as a private citizen, the Court reviewed the letter from the Sheriff’s office to MasterCard. The letter had an official tone, included a citation to a federal statute, and it was signed off as “Thomas Dart, Cook County Sheriff.” [p. 6]

To show that the letter aimed to coerce or threaten, the Court cited a memo from the Sheriff’s Office, suggesting that a letter to credit card companies should be drafted with threats in the form of reminders of the potential liability for suspected illegal transactions. Additionally, after the credit card companies complied with the Sheriff’s demand, his office published a press release titled “Sheriff Dart’s Demand to Defund Sex Trafficking Compels Visa and MasterCard to Sever Ties with Backpage.” The Court found the use of the words “demand” and “compel” to signify coercion. [p. 7]

Moreover, the Court was of the opinion that not every service offered on the website’s adult section was criminal, violent or exploitative. For instance, the Court referred to the category “dom & fetish” advertised by professional dominatrix, noting that it is “not obvious that such conduct endangers women or children or violates any laws, including laws against prostitution.” [p. 10]

Accordingly, the Court concluded that the district court erred in denying the motion for preliminary injunction. It reversed and remanded the case with the direction of issuing the following injunction: “Sheriff Dart, his office, and all employees, agents, or others who are acting or have acted for or on behalf of him, shall take no actions, formal or informal, to coerce or threaten credit card companies, processors, financial institutions, or other third parties with sanctions intended to ban credit card or other financial services from being provided to Backpage.com.” [p. 19]