A California federal lawsuit attracting national attention could arguably become a template for anti-abortion groups seeking to hold civilly and criminally liable Texas businesses that provide health care benefits for employees seeking medical care across state lines. Serena Fleites v. MindGeek S.A.R.L., et al. (Case No. CV-21-04920-CJC(ADSx); U.S. District Court, Central District of California) alleges numerous private causes of action against MindGeek, the owner of Pornhub, the largest distributor of online pornography in the country, and MindGeek’s payment processor, Visa. Plaintiff’s claims arise under both federal and California sex-trafficking statutes.
The facts are disturbing, but at least a brief recitation is necessary to understand the possible implications of the case. In 2014, Serena Fleitas was coerced into making a sex tape by her ex-boyfriend. The video was uploaded to Pornhub and had 400,000 views before Plaintiff discovered it. MindGeek, the parent company of Pornhub and several other pornography sites, reuploaded the footage to those sites, thereby earning advertisement revenue from each view. Fleitas impersonated her mother and contacted MindGeek to inform them that the video qualified as child pornography. MindGeek acknowledged the message, but it took a few weeks for the company to remove the video. In the meantime, the video was downloaded by several users and re-uploaded several times. One reupload had 2.7 million views. MindGeek earned ad revenue from each reupload onto one of their sites. The plaintiff again asked MindGeek to remove the videos, but the company demanded that Fleitas “provide photographic proof that she was the child depicted in the video before removing the videos.”
As a result of the videos, Fleites was harassed and bullied in school to such a degree that she began skipping school and finally dropped out entirely to pursue online courses. After her relationship with her mother became strained, Fleites moved in with her sister. A year later, she moved back in with her mother, where she attempted to hang herself. She was stopped by her younger sister and her mother’s boyfriend (additional suicide attempts ensued). After this attempt, she moved in with a friend. At her friend’s house, an older man introduced her to heroin. She became addicted and created sexually explicit videos at the older man’s behest in exchange for drugs (she was still a minor at this time). The older man sold the videos on Craigslist and some of them were uploaded to Pornhub. MindGeek was still earning ad revenue from each of the videos, some of which were still available as recently as June 2020.
Plaintiff alleges that MindGeek has continuously failed to police its flagship website PornHub and related sites. Even when forced to take down certain videos, the company reuploaded the videos using made-up accounts that masked its true identity. According to Plaintiff, “MindGeek has repeatedly stated publicly that it kept every video ever uploaded on its servers even when they were disabled from its sites,” thus maintaining MindGeek’s position as the top result when people search the web for porn. When MindGeek removes a video, it keeps the video’s webpage with its title, description, tags, and comments. That way, when a user attempts to find a previously removed video on Google, Pornhub will still come up, and when a user clicks the deleted video’s link, he (almost always a he) would be taken to PornHub’s home page.
This is where Visa enters the picture. Plaintiff alleges that “Visa recognized MindGeek as an authorized merchant and processed payments to its websites including but not limited to Pornhub.” She further alleges that Visa was aware of the child porn being uploaded to MindGeek’s sites and that “Visa and its agent banks explicitly agreed with MindGeek to continue to process transactions without restrictions on all MindGeek sites provided MindGeek maintained a pretextual window addressing claims that it had the technology, or process and policies in place to prevent child pornography.” In 2019, Paypal terminated its relationship with MindGeek, stating they were aware of child porn on the site and did not want to be involved. Visa responded by maintaining that they only support “the sale of lawful products or services.” In December 2020 the New York Times published an article entitled “Children of Pornhub,” which detailed the very scenario of this case. Visa responded by suspending business with MindGeek pending an investigation into the allegations of the article. MindGeek then took down over 10 million unverified videos from its sites consititutiing over 80 percent of its content. In the end, Visa restored its services to MindGeek. Plaintiff filed this lawsuit shortly thereafter.
Plaintiff’s claims rely primarily on 18 U.S.C. § 1594, which authorizes a private cause of action for direct sex trafficking and benefiting from direct sex trafficking pursuant to §§ 1591(a)(1) and (2). Visa filed a motion to dismiss on the basis that Plaintiff lacks Article III standing and that even if she had standing, she failed to state a claim under FRCP 12(b)(6). Visa focused its standing argument on the traceability element, asserting that Plaintiff’s injuries “depend entirely on the independent actions of parties other than Visa,” including, among others, Plaintiff’s ex-boyfriend, the man who hooked her on heroin, Pornhub, and, of course, MindGeek.
In an opinion by Judge Cormac J. Carney, the Court did not buy it. “It is simple,” the Court summarized. “Visa made the decision to continue to recognize MindGeek as a merchant, despite its alleged knowledge that MindGeek monetized child porn., MindGeek made the decision to continue monetizing child porn, and there are enough facts pled to suggest that the latter decision depended on the former, at least judging from the fallout from the New York Times piece. . . . When the court couples MindGeek’s expansive content removal with allegations that former MindGeek employees have reported a general anxiety at the company that Visa might pull the plug, it does strike the Court as fatally speculative to say that Visa—with knowledge of what was being monetized and authority to withhold the means of monetization—bears direct responsibility (along with MindGeek) for MindGeek’s monetization of child porn, and in turn the monetization of Plaintiff’s videos.”
With respect to the Rule 12(b)(6) motion, the Court found that Plaintiff had “stated a conspiracy claim against Visa pursuant to Section 1594(c) but fail[ed] to state a claim against Visa for beneficiary liability pursuant to section 1591(c)(2), though as a co-conspirator, Visa might be held liable for MindGeek’s alleged violation of section 1594(a)(2).” While Visa had nothing to do with the Plaintiff’s video, or any videos, Plaintiff “adequately alleged that Visa knew that MindGeek’s websites were teeming with monetized child porn from its own due diligence and discussions and negotiations with MindGeek, PayPal’s decision to cease doing business with MindGeek, communications with advocates with which Visa interacted, and from the New York Times article.” Despite this knowledge, the Court went on, Visa is still processing ad payments on MindGeek’s sites. Plaintiff’s harm, like the potential harm to thousands of other minors who are trafficked on MindGeek’s sites, “were natural consequences of Visa’s alleged knowing decision to provide the means through which MindGeek could monetize child porn videos, like those featuring Plaintiff.”
Plaintiff has also pleaded RICO, California statutory claims for unlawful or fraudulent business practices, and common law conspiracy against Visa. At this stage in the litigation, the Court permitted most of them to go forward. Interestingly, the Court took the time to respond specifically to an amicus curiae brief filed on Visa’s behalf by the International Center for Law and Economics. ICLE argued that Visa should not be held responsible for “doing business” with MindGeek when the majority of the content on its sites is legal porn. The Court responded pointedly that “doing business” does not mean “criminal enterprise,” in which Visa is alleged to have conspired. “Suffice to say,” the Court concluded, “law abiding businesses should avoid doing business with criminal enterprises, even when those criminal enterprises have been smart enough to diversity their activities.”
Needless to say, this case presents a nightmare scenario for Visa. The company has serious exposure to criminal and civil liability. The whole horrible thing is a public relations disaster of the first water. No doubt Visa shareholders are wondering who is minding the store and how the company could possibly have let any of this happen. The fact that PayPal had the same information Visa had and prudently decided to bail out of MindGeek seems particularly damning. No one in the industry is likely to come to Visa’s aid, and the ICLE brief fell stillborn from the judge’s file. The best course of action would seem to be to get out of the case as quickly as possible, drop MindGeek as merchant partner, and cashier anybody who had anything to do with the decision to keep servicing a child porn site. Now that a federal district judge has meticulously aired all of this in public, we’ll see what happens next.
Is there any lesson to be learned from this case that could bear on proposals such as the National Right to Life Committee’s model legislation to create criminal and civil liability for businesses who provide reproductive health care benefits? On one level, probably not. Doing business with a child porn peddler is just about the worst thing a legitimate business can do. But the Visa case also involves statutory and common law claims that do not rely on federal law and may provide independent bases for liability. Suppose, for example, that an NRLC-type statute was enacted in Texas as an adjunct to SB 8. We already know that SB 8 creates a private cause of action against any person who aids and abets an abortion, thus exposing Texas businesses to civil liability. We also know that the Attorney General and a large group of legislators insist that the old Penal Code provision criminalizing aiding or abetting an abortion has come back to life. If so (SCOTX may have to tell us this), there is also a basis for holding businesses criminally responsible for an employee’s abortion. So the risk is already present.
If the NRLC approach was added to current law, however, it could potentially open the door to Visa-like lawsuits and criminal prosecution for “trafficking” women, specifically including minors, for abortions. Suppose for example, a business employs a person with a minor child. The employer’s health care plan covers reproductive services. The employee’s minor is a dependent on the policy. If the minor becomes pregnant, and the employee parent takes her to another state to obtain an abortion (and the health plan covers it), what has just happened? Has the employer, by providing insurance, “conspired” with the covered employee to “traffic” a minor across state lines for an abortion? The NRLC model likewise attempts to create a RICO-type offense targeting women’s health clinics. In the scenario just described, could the employer and the employee be criminally prosecuted and subject to civil suit for conspiring with a “criminal enterprise,” i.e., an abortion clinic? In the Visa case, there is no requirement that Visa had actual knowledge of Plaintiff’s video, only that it had general knowledge that MindGeek’s sites contained child porn. An employer is never going to have actual knowledge of an employee’s health care (but the health plan will), but could it not be argued that merely providing coverage for reproductive services confers enough knowledge that employees and their dependents might get an abortion to subject them to suit? Remember too, that unlike in the Visa case, where an Article III standing objection was available to Visa, SB 8 had no such requirement.
If it is beyond question that the ship is sinking, blood is in the water, and there may not be enough lifeboats for everyone.
* George E. Christian, TCJL’s research assistant, prepared the case brief and participated in drafting this article.
