Federal Court Rules against Chicago Sheriff in Backpage.com Advertising Lawsuit

A Chicago area sheriff was ordered to stop using the authority of his office to encourage credit card companies to block transactions between advertisers and Backpage.com.  A federal appeals court determined the sheriff engaged in a “campaign of suffocation” and “official bullying” which was unconstitutional because it violated the Frist Amendment Freedom of Speech.

Chicago Sheriff Challenges Backpage.com

Sheriff Thomas dale of Chicago and surrounding areas made headlines when he engaged in a campaign against Backpage.com, a classified advertisement website which endorses a variety of consumer goods, notably sex services such escorts, strip clubs, phone sex, and other adult themed jobs in the sex industry.  According to Sheriff Dale, Backpage.com’s adult advertising section blatantly advertised illegal sex transactions and needed to be shut down.  Dale did not target Backpage.com directly, but instead sent demand letters to Visa and MasterCard requesting the companies prohibit use of their credit cards to complete transactions on the website.

When the credit card companies capitulated to the pressure applied by Sheriff Dale and other officials and began refusing to process transactions associated with Backpage.com, the web-based company filed a lawsuit in federal court alleging the Chicago sheriff had gone too far with his campaign against the company’s business practices.  After a lower federal court refused to issue an injunction against Dale’s activities, the United States Court of Appeals for the Seventh Circuit agreed to hear the case.  This week the higher federal court rejected the lower court’s position and issued an injunction against Dale’s activities by holding the sheriff acted in violation of Backpage.com’s First Amendment rights.

Federal Appeals Court Rules against Chicago Sheriff

The 7th Circuit Court of Appeals issued a ruling early this week which put a stop to Chicago Sheriff Thomas Dale’s aggressive campaign to dismantle online ad website Backpage.com by forcing credit card companies to deny the company service.  While Judge Richard Posner wrote Dale was allowed to publically denounce the website’s practice of running illicit ads for sex services and other adult themed products, the Court ruled the sheriff had gone too far when he used the power of his office to demand Visa and MasterCard stop doing business with the company.

As part of his campaign against Backpage.com, Dale had made what the Court called “dire threats” including the possibility of prosecution against Visa and MasterCard in order to put a stop to Backpage.com’s business operations.  Dale argued he was not using his office to issue threats, but was simply using his authority as sheriff to express his disgust about the company’s advertising practices.  The Court found this argument unpersuasive, and determined the sheriff’s actions had crossed the line between permissible government speech and impermissible government action to restrict freedom of speech.

According to Judge Posner and the 7th Circuit Court of Appeals, Dale overstepped his bounds “by threatening credit card companies or other suppliers of payment services utilized by customers of Backpage, or other third parties, with legal or other coercive governmental action.”  Finding this, the Court issued the injunction from taking action, “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.”  Further, the sheriff was ordered to transmit letters to Visa and MasterCard informing the companies of the Court’s ruling.

Backpage.com Praises 7th Circuit Ruling

After the decision to prevent Sheriff Dale from engaging in further action threatening its business, Backpage.com’s attorney gave an interview with the press where he praised the court’s decision.  Saying the decision “reaffirms that the rule of law governs local law enforcement officials, no matter how convinced they are of their own rightness,” the Backpage.com attorney expressed gratitude that the sheriff’s reasoning “did not fool the court.”

While it remains to be seen if Sheriff Dale’s unconstitutional demands of Visa and MasterCard have the desired effect of forcing both companies to deny service to Backpage.com in an effort to avoid public scrutiny, the 7th Circuit’s ruling will put a stop to official pressure on credit card companies from ceasing operations with the controversial web advertising agency.

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