UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF PENNSYLVANIA

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AMERICAN CIVIL LIBERTIES UNION ANDROGYNY BOOKS, INC., et al Plaintiffs, vs. JANET RENO Defendant.

Civil Action 98-5591 November 19, 1998 9:50 a.m.

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TRANSCRIPT OF NON-JURY TRIAL
BEFORE THE HONORABLE LOWELL A. REED, JR.
UNITED STATES DISTRICT JUDGE

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APPEARANCES:

For the Plaintiffs:	CHRISTOPHER A. HANSEN, ESQ. ANN ELIZABETH BEESON, ESQ. American Civil Liberties Union 125 Broad Street New York, NY 10004 STEPHEN PRESSER, ESQ. American Civil Liberties Union 125 South Ninth Street, Suite 701 Philadelphia, PA 19107
For the Defendant:	KAREN STEWART, ESQ. THEODORE C. HIRT, ESQ. BENJAMIN M. LAWSKY, ESQ. U.S. Department of Justice 820, 901 E Street, NW Washington, D.C. 20530 RUPA BHATTACHARYYA, ESQ. P.O. Box 883, Ben Franklin Station Washington, D.C. 20044
Audio Operator:	CAROL SAMPSON
Transcribed by:	DIANA DOMAN TRANSCRIBING

Proceedings recorded by electronic sound recording; transcript produced by transcription service.

I N D E X

WITNESSES	DIRECT	CROSS	REDIRECT	RECROSS	COURT
FOR THE PLAINTIFF
Norman Laurila	9	61			59
David Talbot	67				65

EXHIBITS	IDENT.	EVID.
P-1 Printout to place order P-2 Home page on Web site P-3 New books, features P-4 Table of contents P-5 Reviews by employees P-6 Authors A through K section P-7 S&M and fetish section P-8 Gay or lesbian lives section P-9 Ability to search entire Web site P-10 Children's books section P-11 Searching word cunt in Web site P-12 Calling for submission section P-13 Words from the staff P-14 Poem from Emanuel Zavier P-15 Biography of John Orcutt P-16 Sunday at Seven P-17 Article on shame P-18 Samples on Web site P-19 Cover story November P-20 Copy of index to archives P-21 & P-22 Articles by Susie Bright P-23, P-24, P-25 Articles by Courtney Weaver P-26 Articles by Camille P-27 Excerpt of Table Talk P-31 Table of content for Starr Report P-Tab A Mr. Finan P-Tab B Mr. Glickman P-Tab C P-Tab D Mr. Johnson P-Tab E Patricia Speyer P-Tab F Mr. Steinflart P-Tab G Ms. Warren	114 114 114 114 114 114 114	44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 44 87 87 87 87 87 87 90 105 105 105 105 105 105 105

CLOSING BY: Ms. Beeson

CLOSING BY: Ms. Stewart

THE COURT: Decision

(Call to the Order of the Court)

THE COURT: Good morning, everybody.

ALL COUNSEL: Good morning, Your Honor.

THE COURT: You're welcomed to be seated. For the record, we're here for the request by the plaintiffs for a temporary restraining order in the matter of American Civil Liberties Union and others versus Reno, civil number 98-5591. Could counsel identify themself who will be presenting this morning?

MS. BEESON: Yes, Your Honor, I'm Ann Beeson, lead counsel for the plaintiffs. And Chris Hansen will also be presenting this morning.

THE COURT: Okay. Thank you. For the defense, who will be presenting today?

MS. STEWART: Your Honor, good morning, Karen Stewart with the U.S. Department of Justice for Defendant Reno.

THE COURT: Thank you. To the extent we need it in terms of time, we'll take a recess in the middle of the morning and then a midday recess depending on what's going on, but that's my present plan, to have a reasonably set up day. Just for general planning purposes, the plaintiff is presenting two witnesses?

MS. BEESON: Yes, Your Honor.

THE COURT: And I didn't get a witness list from the defense, so I assume they're not presenting any live testimony?

MS. STEWART: No, Your Honor, that's correct.

THE COURT: Okay. Do the parties have any stipulations to offer the Court at this time --

MS. BEESON: Your Honor, --

THE COURT: -- or do the plaintiffs want to offer in stipulations as part of their case?

MS. BEESON: Your Honor, we have been going back and forth with Ms. Stewart over a draft fax stipulation. We have -- we do not have anything ready at the moment for the Court but we do believe that if we had a little time over lunch we might be able to resolve a few last details and get you something.

Now just so that you know what these facts are, they are generally just the background facts about the nature of the Internet that are derived in part from the first 48 paragraphs in ACUL versus Reno-1. But if the Court believes those would be helpful, then Ms. Stewart and I have discussed it and could get you something before the -- by the end of the hearing or shortly thereafter.

THE COURT: Let me -- thank you. Let me explain what I'll do throughout these proceedings. In the absence of a stipulation of fact, I'm going to rely, with the permission of the parties, I think it's already constructively given, on the declarations that have been filed for purposes of this hearing only. There having been no time or effort to complete any discovery, we're talking about a threshold type of hearing and I'll rely on the declarations and exhibits provided by the parties in the absence of a stipulation.

So the things that I'm interested in factual aspects of this proceeding I have some notes on, but I don't think they're going to be in the type of stipulation you're talking about.

MS. BEESON: I think that's probably right, Your Honor.

THE COURT: They go to the effort to see if affirmative defenses technical problems connected with those types of things, and then they're not going to be in the -- the parties have quite a disagreement over those items, so there's not going to be a stipulation.

And other than the gentleman's declaration that went into that detail that the plaintiffs have submitted and that the defense has -- the report to what I call the Bliley Report, maybe they call it something else on the hill, but the HR105-775 or whatever that is. I have never found a proper name for it anywhere yet. So that's the type of declaration material I'm going to rely on if there's no stipulation of fact or no testimony. And I think that -- if anybody thinks that's wrong, they'd better tell me at some point today.

Ms. Beeson, you've -- I also want to compliment the parties for the reasonably comprehensive materials they've provided. And the reason for that compliment is more in the substance than in the superficials. I don't need any opening argument on these proceedings. As far as I'm concerned it's been made on paper and I've burned some midnight oil, and I'm sure you have as well, trying to keep up with the papers you've been filing.

So I've read them all. To say I've absorbed every fact that's in there, I guarantee you I haven't. So I'm ready to proceed with the testimony.

MS. BEESON: Thank you, Your Honor. Chris Hansen will be calling our first witness.

MR. HANSEN: Your Honor, plaintiffs call Norman Laurila.

THE COURT: Right up here, sir, be careful for the wires. Just come around the wall and up the steps. And if you could put your papers down, please, stand behind the chair, put your left hand on the Bible and take the oath.

NORMAN LAURILA, PLAINTIFF'S WITNESS, SWORN

COURT CLERK: Please be seated. Please state your name and spell your last name.

MR. LAURILA: My name is Norman Laurila, L-A-U-R-I-L-A.

THE COURT: Good morning, sir.

MR. LAURILA: Good morning, Your Honor.

THE COURT: Excuse me, counsel. You'll see me doing something kind of strange up here and I want to tell you what I'm doing. I'm constantly looking down, and you'll think I have some sort of a fixation on something over here. What's there is a video screen monitor which has the real time on it and I keep notes by real time so I can go back to the videotapes and find what I want.

So you may think I'm looking at the witness and I'm looking down at the monitor which I put down there purposely so it wouldn't interfere with the jury or something like that. So that's just a little tidbit you'll see me doing and that's the end of that subject. Go ahead, Mr. Hansen.

MR. HANSEN: Thank you, Your Honor.

DIRECT EXAMINATION

BY MR. HANSEN:

QMr. Laurila, what is your current occupation?

AI'm the founder and owner of A Different Light Bookstores.

QWould you describe your educational background, please?

AI have a BSC from the University of New York at Albany.

QAnd what is -- can you describe your employment history since college?

ADuring college I started work for a gay bookstore in Toronto and opened my first store in Los Angeles in 1979, so my entire adult working life has been for the bookstores.

QHave you actually stood behind the counter in a retail bookstore and sold books to people?

AYes, originally I was the only employee and we were so well received in LA that we actually had what people like to refer to themselves as dosens (phonetic). They actually volunteered to work in the store for the first couple of years.

QHow long have you been the owner of A Different Light Bookstore?

AI owned 50 percent from day one until May of this year when I inherited the other 50 percent.

QAnd the bookstore was founded when?

A1979.

QWould you briefly describe what A Different Light is?

AA Different Light is a gay and lesbian bookstore. We try and carry everything that's for, by and about gay men and lesbians, as well as being considered a community center of sorts. In our three stores we have upwards of 500 events a year, most of which are readings by authors who have new books out. But we also have events for parents and children. We have a video series. We have free bulletin boards. We give away a tremendous amount of free literature, flyers, newspapers, that sort of thing.

QThe books that you carry in the bookstore, are they limited to books that are gay themed?

ANot necessarily. We carry a lot of non gay material by gay authors. So, for instance, we have every novel of Truman Capote or Gore Vidal or Elizabeth Dowen or a variety of others. But as a general rule, we try and -- we hope that there's some gay content somewhere in the book itself.

QDo you also carry some books that might be of general interest but are also of interest to the gay community?

AYes, our stores very much cater to the community in which they are. So in Los Angeles we're across the street from the Pacific Design Center, so that store carries a lot of design books just because that's something that the community there wants. Also, you know, we carry a lot of celebrity biographies and that sort of thing, which are certainly peripheral titles, but which are of interest to our customers.

QDo you carry books on travel?

AYes, we do.

QWhy?

AWell because we think that a lot of our customers travel and we also carry a lot of books for what we think of as armchair travelers. So we have specific gay guides to various cities in the world or worldwide guides, but we also have just general guides to London, Paris, Rome, Florence, that sort of thing. One of our top selling travel books right now is Traveling with Your Pet, so that isn't specifically a gay or lesbian title, but it's obviously of something of great interest.

QDo you also have events in the store for people and their pets?

AWe have had, yes, we have. We've had Sunday morning events for owners with dogs and then owners with cats.

QIs A Different Light a for-profit entity?

AYes, it is.

QWhere is it located?

AWe have one store in West Hollywood, a second in New York City and the third is in San Francisco.

QDoes A Different Light maintain a Web site?

AYes, we do.

QFor how long have you maintained that Web site?

AThe Web site opened in 1995.

QWhy do you have a Web site?

AWe think of our customers as being fairly sophisticated, and, therefore, we like to try and keep up with them or stay ahead of them. And so we were very interested and anxious to be on the Web as quickly as we could. A lot of our customers we know use the Web and a lot of our customers we know use our Web site. That's a very economical way of getting in touch with them. It decreased by tens of thousands of dollars our postage costs in mailing out the flyers for the various events we have.

And it allows them to peruse our entire inventory on the Web to make lists or comments for things that they might want to come in and pick up or they may choose to order over the Web or use our 800 number to order over.

QWhen you say you have your entire inventory on the Web, how many titles do you carry?

AWe carry about 21,000 titles. Most of what's on the Web, however, is -- our entire inventory is not annotated on the Web at the moment. It's just author, title, price, publisher. There probably are six or 700 titles that are specifically annotated on the Web and discussed.

QWhat do you mean by annotated?

AIt means there is either a review of them, our general comments about why we carry it or why it's an important book. There may be an interview with the author, an excerpt. So it's just more than title, name and price.

QWhy do you put that additional information on about those titles?

AWell a great many of these titles are not widely reviewed, so it's one way for our customers to hear about the titles. And it obviously makes the Web site much more personal. If it was purely just data, I mean, it wouldn't keep anyone's attention for very long.

QSo you think --

AWe're in the business of selling books, so we're trying to entice people into considering buying what they're reading about.

QAnd you think the reviews and so on help you to that goal?

AAbsolutely.

QAre there other Web sites that link to A Different Light's Web site?

AThere are quite a number. For instance, we have an arrangement with the New York Times, so our site is linked to their site. If you're on the New York Times' site and you want to look up something in gay and lesbian literature, you'll find a link to our store. We also link to other gay and lesbian bookstores, the Web sites of their gay and lesbian magazines, anything that we think is of interest to our customers and/or the community.

QHow much business does A Different Light do over its Web site?

AWe do about three to $4,000 a month out of our San Francisco store which is roughly I would say 3 or 4 percent of its gross sales.

QWhat do you mean when you say you do it out of the San Francisco store since we're talking about the Web?

AThe Web is maintained by a woman who works for us in San Francisco and the serve we use is in Berkeley and the company that we use to -- you need a special server to put your actual database. So our inventory, which we have to update that once a month, which just -- which gives the title, author and the ability to search that is in Los Angeles.

THE COURT: Excuse me, do I get the impression that all of your Web site purchases go through the San Francisco store?

MR. LAURILA: Unless they use the 800 number. The 800 number is in New York, so if somebody chooses not to order via the Web or E-mail but to phone us directly, the regular phone numbers of the three bookstores are there as well as the 800 number, which is to New York.

THE COURT: And you accept orders obviously over the 800 number.

MR. LAURILA: That's what it was principally set up for.

THE COURT: And it happens that they, whoever does that for you, submits that order to the New York store.

MR. LAURILA: No, that line rings right in the New York store.

THE COURT: All right. Okay. I was assuming there might have been an intermediary, but I understand.

MR. LAURILA: No, no, in some respects we wish, because we have to go through all the trouble of packaging and mailing and everything else, but no, we do it directly in New York.

QDo you think there are customers who buy your books either at the bookstore itself or over the 800 number that learned about the information from your Web site?

AAbsolutely. Our customers rely very heavily on our recommendations, just as they would in any specialty store or any independent store. That's the difference between independent and a chain store. So that they're very interested in reading what we have to say about a title.

QYou said you had a contract with someone to host the server that carriers your inventory. Who has editorial control over A Different Light's Web site?

AWe have total editorial control over everything on the Web site.

QHow many people access A Different Light's Web site?

AIn the last month just a few short of 25,000 accessed the Web site.

QAnd is that -- what is that $25,000 -- 25,000 number, is that --

AThat's what referred to as hits.

QOkay.

AWhich means that 25,000 people somehow entered our home page.

THE COURT: Excuse me for interrupting. But the access to the home page was had 25,000 times. There might have been fewer number of people who did it more than once.

MR. LAURILA: Absolutely, yes.

AIn fact, there's another way of trying to figure out exactly how many people came in and that's to look at what's called the independent --

QLead hosts?

ARight, lead host. And that actually registers somebody's address coming in. Unfortunately, that means if you're with America Online, that registers once no matter if 50,000 America Online subscribers came into our site, it would only register once. But even with those single address entries, it's about 5300 a month.

QWhat percentage of the visitors to your site actually purchase something over the Web?

AWell we estimate around 1 or 2 percent. However, we think a tremendous number of people who access the site then either use the 800 number or come into the bookstore.

QWhy do people come to A Different Light's Web site?

AI think ease of information, anonymity to a greater extent. Since we do try and provide everything we possibly can on the subject and we -- our philosophy is not to censor, you can pretty much find anything to do with the subject that you might hope to find, and ultimately you do it in the privacy of your own home or wherever. And we have no knowledge of who you are or where you're coming from or anything else. So --

QWhy is that anonymity of value to the people who come your Web site?

AWell I think that's one of the benefits of the Web in general, but in terms of our stores, there are still so many social pressures, homophobic pressures against being gay or lesbian that unless you're entirely comfortable with your sexuality, you may not want people to know you're actually checking into a site. If you're exploring your sexuality or if you're confused or if you have a child who suddenly has come out to you or someone you know has AIDS or whatever, there are just a whole number of issues. Religious issues, we have a very large religion section. So if you're wrestling with your sexuality because of religious beliefs, you'll find hopefully helpful information on -- from the books that we carry.

QDo you also have on your Web site information about community events or events of interest to the gay and lesbian community?

AYes, we do. Mostly they're our own events unless we're co-sponsoring something. We do an actual writers and readers conference in San Francisco once a year, so that kind of spreads us around a bit. But a lot of that would be through links with other sites.

QDo you think people come to your Web site for just that resource information?

AThere's no doubt about it. When we look at which pages on our Web site are visited the most often, the events schedule page for the three stores is very high on the list.

QIs the material on your Web site offered for free?

AYes.

QWould you say that the Web has become an important way for A Different Light to communicate?

AI think it's an incredibly important way for us to communicate.

QAnd do you think it is likely to continue to be so?

AI suspect it will be more so. The estimates are that a much higher percentage of book purchases will migrate to the Web. And, therefore, in order to survive we have to be prepared to reach our customers and sell through our customers via the Web as well as via the stores.

QSo you said earlier that only a percentage of your inventory now has annotated information about the books, do you think that's going to change over time?

AIt will have to. If we're forced to put more and more emphasis on the Web site in order to survive, there's no question that we will need to have annotations on as many titles, if not all titles. And that's the way the book industry is going, including full jacket pictures, table of contents, all that sort of things. So eventually we may have an information that that's complete.

QOr even the first chapter of the book?

AExactly.

QAre minors an important audience for A Different Light's Web site?

AThey're an important audience for our Web site as well as our physical stores. Certainly one of the hardest things about being gay or lesbian is the coming out process. I think most people understand or even accept the fact that they may be gay or lesbian long before they're able to acknowledge that to anybody else. And as a general rule this is done in pretty much an isolation. And peer pressure and peer hostility, as well as parental or religious pressure or hostility makes it very difficult. And, in fact, the suicide rate amongst gay teens is much higher than the general population. So it's really important for young people to have access to the information without any fear of recrimination or exposure or anything else.

QYou said A Different Light only has three physical bookstores. Is it also important for teenagers who don't live in one of those three big cities to have access to the kind of information on your site?

AI think that's the principal benefit actually, is if you live in one of the three cities, if you the courage to come into one of the stores, that's a wonderful advantage because you're going to meet real people who can help you with whatever you're looking for. But if you live in a smaller community that doesn't have a gay bookstore or a community center or a sympathetic ear of some form or other, the Internet is the place that you're going to find that information and comfortably find it.

QAnd do you believe that you get people visiting your Web site from locations other than the three where you have physical stores?

AAbsolutely. I think the majority would be.

QDo your physical bookstores sell material to minors?

AYes.

QCould you talk about that a little?

AWe have a section on children's books, young adult titles, coming out, education, health, art books, et cetera. So there is a certain focus. We also have a fairly large section on parenting and on the coming out section has a lot of books for parents and teachers, et cetera, to help young people who might be coming out. And a lot of the books in the coming out section are actually written or edited by gay or lesbian youth, the arthrologies are.

QDo your physical bookstores carry books that are more sexually explicit than some that you've just been describing?

AAbsolutely. We carry everything, and so a lot of that is very sexually explicit.

QAnd do you also sell those to minors who come to your physical bookstores?

AIt depends on the circumstances. We don't have any hard and fast rule, but we certainly like to think we're responsible citizens. And, therefore, we practice discretion in what we would sell to anyone. So if an eight year old picks up a neurotic magazine, we would certainly question what they wanted it for or we would assume that child would probably be in the store with a parent to begin with. So, yeah, we would take a close look at it. And if we thought it was somehow appropriate for that child, we would sell it to them.

QHow about a 16 year old?

AI can't think of anything in our stores that we wouldn't sell a 16 year old.

QHave you had minor employees?

AYes, we have.

QCan you explain how that came about?

AThere is a gay and lesbian high school in New York City and we have had students from the high school work for us.

QDo you sell sexually explicit material to minors from your Web site?

AWe could. We have a spot on our order form which where you have to click a box that says that you're over 18 and can legally buy sexually explicit material, but we have no way of verifying that whether someone checks it or not.

QMr. Laurila, I'd like you to look at Exhibit number 2 that has already been supplied before you.

MR. HANSEN: Your Honor, there's a technical --

THE COURT: You'll have to direct me to where that is.

MR. HANSEN: It's -- we submitted to you two books of exhibits, one which was declarations and the exhibits attached to those and one was just exhibits. And it's in that book.

THE COURT: Andy, we don't have those books here, I'm going to have to get them. Could you go get them? Do you know which ones we're talking about?

COURT CLERK: Yes.

THE COURT: Thanks. Go ahead, I'll catch up. They're just sitting back there.

AI'm sorry, did you have some question about this exhibit?

QYeah, just one second.

AOkay.

MR. HANSEN: Your Honor, I'm not sure as a technical matter whether we need to move these exhibits into evidence or whether they're already in evidence since they've been --

THE COURT: I can't remember what it is, so I'll have to wait awhile.

MR. HANSEN: All right, fine.

THE COURT: I've read most of the material in that book and I mean literally read almost all of that material, but I didn't memorize whose names was on all of that material.

MR. HANSEN: This is the thinner -- it's probably the one on top, it's probably the thinner of the two books.

THE COURT: They're broken down by declarant.

MR. HANSEN: That's correct.

THE COURT: They're alphabetically A through I. What group is this in?

MR. HANSEN: This is I -- this is H.

THE COURT: Okay. I have it.

MR. HANSEN: Which are exhibits relevant to this particular witness.

THE COURT: I can tell that, sure.

BY MR. HANSEN:

QNow Mr. Laurila, looking at exhibit --

THE COURT: Number two in that group?

MR. HANSEN: Pardon me? One, number one, I'm sorry. I said two but I meant one.

QYou were just testifying about the order form on the A Different Light Bookstore Web site, is this the order form that you were talking about?

AYes, it is.

THE COURT: Excuse me for interrupting, but you have to be -- attempt to be as careful as you can about describing things. When you talk about an order form, it sounds like a piece of paper and that's not what this represents, so you'd better make clear what -- I don't think that's what this represents.

MR. HANSEN: No.

QWhat is Exhibit 1?

AExhibit 1 is a printout of what the screen on our Web would look like that someone would fill in to place their order.

QAnd the Web address of this Web site is in the upper right hand corner of the first page of this document?

AThat's the secure address which means if somebody goes -- wants to make a purchase and goes to the order form, they go into another service we have to contract with that makes sure that any information that they provide is encrypted so that no one else can have access to that information, particularly their credit card information.

QNow looking at the third page of Exhibit 1, is that the -- down near the bottom, is that the portion of this Web page that you were describing earlier?

AYes. That's the only place where we ask for verification of someone's age.

QIf I am on this Web page and filling in these blanks and I'm 15 years old and I check the first of these two little circles that says, I am of age, do you have any way of knowing whether that -- what my actual age is?

AAbsolutely not.

MR. HANSEN: Your Honor, I have no more questions about this particular exhibit. Do you want to -- do you want us to move each exhibit one by one? Do you want us to move the whole set?

THE COURT: I only want you to move the exhibits in when the witness is on the stand so we don't have a problem with having a gone witness and a problem with -- so I don't care when you do it, whether it's on a rolling basis or at the end.

MR. HANSEN: Okay, let me try it this way which might be the easiest way to do it.

THE COURT: Someone is going to have to keep a list if you don't do it as you go along, and I'm not going to do that.

QOkay, Mr. Laurila, have you reviewed Plaintiff's Exhibit 1 through 18 that appear after Tab H in the submissions that have been made to the Court?

AYes, I have.

QAnd as a group what do those exhibits represent?

AThese exhibits are all again hard copy printouts of our Web pages, so these -- if you were on the Web you would just see them on a screen.

QAnd are these accurate portrayals of what would appear on the screen if someone went to the Web site of A Different Light Bookstore?

AAbsolutely. I mean, right this moment in fact.

THE COURT: Excuse me for interrupting, but I precisely want to make clear. These, excuse the impression, were snapshots of the screen whenever they were taken. They may or may not be precisely the same if you're changing inventory, I don't know, or something like that.

MR. LAURILA: That's true, but the site hasn't been altered since these were taken. These are current enough so that this is what it still looks like pretty much.

THE COURT: Okay.

QAnd can we --

THE COURT: When were these taken from the site? Is there some way I can tell that or --

MR. HANSEN: You can tell by looking in the lower right hand --

THE COURT: Lower right hand corner.

MR. HANSEN: -- corner of each of the pages, the date when this was actually printed out.

THE COURT: So they were all it looks like in November of 1998. I'm just going quickly through them.

MR. LAURILA: Yes.

MR. HANSEN: I believe they were all November 12th. There may be -- oh no, I see the 11th.

THE COURT: There's some other date.

MR. HANSEN: Yeah.

THE COURT: Did you pick 1 through 18?

MR. HANSEN: Yes, that is what I picked, Your Honor.

THE COURT: And you did that on purpose because there are more.

MR. HANSEN: After 18 there's a Tab I and the exhibits after 18 will be with the second witness today.

THE COURT: Okay. Thanks.

BY MR. HANSEN:

QAre you familiar with -- will you look at Exhibit 2 of the exhibit book? What is this exhibit?

AThis is what is referred to as our home page. So if you come onto our site, this is where you begin. This is essentially a table of contents which directs you to other areas and also links to other sites.

QOkay. Are you familiar with the Act being challenged in this case?

AYes, I am.

QWhat do you know about it?

AWell I know that it's very frightening for us and for --

THE COURT: Excuse me for interrupting, but I think you're asking him what he knows about the substance of the Act. If you have another question, he's not answering your question.

QWhat, if anything, do you know about the --

THE COURT: Let me say this, I don't -- it's a non-jury proceeding so I feel somewhat allowed to interfere, but I'm not going to interfere in the tactics of the lawyers and I want to respect your natural human tendency to try to be helpful. That's what you do every day. But in the courtroom you can only be helpful in the way that the rules allow, so you have to respond to the question that's asked even though you think you know what he means, you have to respond to the very question that he asked. And I will try not to interrupt anymore, but that's the general plan.

AAll right. Well what I know of the Act is that anyone who has content on the Web that could be considered harmful to minors is subject to considerable fines and possible imprisonment.

QAre you able, having read the Act, to decide what material would be prohibited under it and what would not?

AIt's extremely difficult. However, I think the lynchpin for us is community standards. Whereas we might feel entirely safe with all of the content of our Web site in some communities, in others we think it would be very problematic. I mean there may well be small towns in the Midwest or the south or whatever that would consider the very idea of our site period to be harmful to minors.

QWhy is that?

AWell because there is such a fear of homosexuality and it is -- goes right to the heart of the matter, to the point where the Fundamentalist Christian movement actually uses homosexuality or the threat of homosexuality as one of their major fundraising efforts. And it strikes such a chord of fear in so many people that they're willing to contribute a lot of money to stop the advancement of homosexual ideas and their fear of what they think of as a choice that young people are very susceptible to.

QAre you familiar with attitudes that it's particularly disturbing to discuss homosexuality with minors?

MS. STEWART: Objection.

THE COURT: Grounds.

MS. STEWART: Your Honor, the --

THE COURT: If it's simply leading, then the objection is sustained. If you have some other grounds of relevance or something, that's more --

MS. STEWART: Yes, Your Honor, the objection is leading.

THE COURT: Sustained. It's easy to do it another way.

QAre there any other reasons why you're concerned about the nature of the speech that you have on your Web site?

AWell, again, by the very nature of being gay or lesbian it has to do with sexuality. And so it's -- it would be difficult for us to figure out what books on our site would be considered sexually explicit or harmful to minors because again it's opened to such wide interpretation.

QAre you familiar with examples of communities that have proposed censorship or had difficulties with discussions of gay or lesbian issues?

ACertainly I've read about them over the years. I can't cite any specific community, but we certainly read about communities that, for instance, there are a lot of librarians tend to be fairly progressive and they might carry books for children.

THE COURT: A lot of what, pardon me?

MR. LAURILA: Librarians.

THE COURT: Right.

QAnd so there's a book called Heather has Two Mommies and Why is my Family Different? and titles of that nature. And if the libraries are brave enough to carry them, what one publisher was finding is that the books were being taken out by people and destroyed, not returned. And at one point one publisher in particular, Allison, was actually donating copies of its children's books to libraries because they were being destroyed. So -- and, you know, just the general instance of censorship for books regarding young people whether, you know, it's Huck Finn or whatever it is, but certainly anything to do with sex, specifically gay or lesbian titles, people are very nervous about giving to their children.

QIs there -- is the gay or lesbian community having a problem with violence these days?

AIt's always a problem. It's just a question of how it surfaces based on the current climate. Certainly we all know of the deplorable murder in Montana. That's an extreme form of it, but gay men and lesbians are subjected to various forms of violence every day.

QHave national political figures discussed their concern about gay and lesbian issues?

APeriodically.

MS. STEWART: Objection.

AThe President discussed it on three occasions in New York.

THE COURT: Excuse me, are you objecting, Ms. Stewart?

MS. STEWART: Yes, Your Honor, on relevancy grounds.

THE COURT: I don't know what the relevance is either. What is the relevance of these questions? What is the relevance?

MR. HANSEN: The relevance, Your Honor, is to show that there is a significant segment of this country and there may be some communities in this country that would find simply the discussion of gay and lesbian people and the issues of interest to them by itself harmful to minors. We're trying to show that there is a widespread --

THE COURT: Well what in the statute suggests that it would be considered to be within the statute?

MR. HANSEN: Well part of the problem is that we don't know what the statute requires.

THE COURT: Well you know what it says.

MR. HANSEN: We do --

THE COURT: Is there any place that you can point to to cover this kind of concern?

MR. HANSEN: What it says is that according to local community standards, the speech that is being engaged in is patently offensive with respect to minors and lacks value with respects to minors. If, indeed, there is a significant segment of the community that believes that speech about homosexuality in and of itself is patently offensive and lacks value, then those communities may well seek to prosecute people for that kind of speech.

THE COURT: Okay. We have a non-jury proceeding. I'm going to overrule on relevance and if I find it useful, I'll consider it, if I don't, I won't. Overruled.

BY MR. HANSEN:

QAre there political figures who have discussed the issue of homosexuality, national political figures?

AThe President did in light of the murder in Montana three times in New York during the political campaign and he also talked about it in Washington at the press conference.

QWhat about the majority leader of the senate, Mr. Lott?

AUnfortunately Mr. Lott again, I'm not sure if he said homosexuality was a disease, but it wasn't -- it certainly was as extreme as that. I'm not sure what his exact words were, but --

QAll right, now I'd like to now refer to some of the exhibits that are printouts of material on the A Different Light's Web site, and going back again to Exhibit 2 which we've already looked at, what happens if I click on --

THE COURT: Which number are you looking at now, Mr. Hansen?

MR. HANSEN: I'm looking at Exhibit 2, Your Honor.

QAbout a third of the way down, Exhibit 2, there's the words, what's new, do you see those?

AI'm trying to find it, I should know it by heart, but yes, I do, sorry.

QRight next to the word -- or look at the word new.

AYes. It's right at the top of the listing.

QAnd are those links?

AThis is links to other sites on other -- other pages on our Web site so that somebody doesn't have to go through the entire Web site to find something. If they're interested in what's new, which in this case says new books, new features and other news, they would go just directly there.

QAll right. If I click on that link, would it take me to Exhibit 3?

AYes.

QAnd what is Exhibit 3?

AExhibit 3, we get new books every day and we usually like to feature the new books as quickly as we can in the Web site to let people know that they're finely in print or that they are now in print or that there's something that they might want to consider coming in and buying or buying over the Web.

QWhat is Exhibit 4, if you would look at it, please?

AExhibit 4 is what attaches to our full inventory and it's by section. So everything from aging to books in Chinese, family issues, men erotica, fiction, humor, religion and --

THE COURT: Sort of a table of contents for the inventory?

MR. LAURILA: Yes, it's like if you were in a bookstore, these are the section signs. These are the sections we actually have in the store.

QSome of these seem to be underlined and some do not seem to be underlined, what's the significance of that?

AIf they're underlined that means that we have had the opportunity to annotate those titles. So if you click onto one of the ones that's underlined, you will get more than just title, author, publisher and price.

QNow specifically you have a category named young adult fiction?

AYes, we do.

QAnd if I click on that will I get what is Exhibit 5?

AYes, you will.

QAnd would you describe Exhibit 5, please?

AExhibit 5 is where we feature reviews written by one of our employees for four titles that were written for young adults.

QWho is it that wrote the descriptions that are contained on this page?

AThis is the manager of our San Francisco store, Richard Labonte'.

QOkay. And this particular page is discussing books that might be of interest to young adults?

ACertainly of interest to young adults. I think the publisher has given -- if you look at who published them, FarrarStrauss, Gerald, Holt, HarperCollins, these are all in the top ten publishers in the US and so a lot of these are published for libraries to purchase, as well as for parents to purchase for their children or uncles to purchase for their nephews or whatever. I don't know how many young people will actually spend $16 on a hard cover book.

QWhat is Exhibit 6?

AExhibit 6 again if you clicked on coming out as a section, because it tends to be a fairly large section, you're going to first get the titles from authors A to K and that's what this is.

QWhat does that mean, coming out?

AComing out are books that have to do with the process of acknowledging your sexuality, first to yourself, then to your family and finally to the world at large. So a lot of these books are written to aid people in coming out. Some of them are from the perspective of cautionary tales of parents who reacted badly to their child coming out. For instance, in one case the son committing suicide. The books are for parents who are trying to understand what coming out is all about, but principally they are for men and women who are interested in getting a more balanced positive view of what it means to be gay or lesbian.

QWho wrote the synopsis that described what the book is about on Exhibit 6?

ASome of it would have come from initially from the dust jackets of the book, but these were written by Jim Breeden who is an employee at our San Francisco store.

QWhat is Exhibit 7?

AExhibit 7 is a -- would be clicking to another section, S&M and fetish, and these are reviews of a dozen titles.

QWhat is the subject matter of this section?

ASadomasochism and fetishism, so --

QCould you explain a little more what that means?

AWell this is dealing with an area of sexuality that's controversial or can be controversial to any age and that has to do with submission and dominance, acting out various fantasies. Fetishism, you could have a fetish about feet or who knows, whatever you choose to eroticize.

QAnd these are books -- these are referring to books that are available in your bookstores or over the Web?

AYes.

QThere's also a textual description on this page of these books, where is that -- who wrote that text?

AOtto Coca wrote that. He wrote these while he was an employee of the New York store. He no longer works for us.

QAnd what is Exhibit 8?

AExhibit 8 is called gay and lesbian lives. We separate -- because of carrying celebrity bios and that sort of thing, we separate biography into books that are biographies about gay and lesbian men and women and that's what this one happens to be. So this is new biographies of Truman Capote, Christopher Isherwood, Felice Picano, et cetera.

QAnd have A Different Light employees also written the text that described these books?

AYes, this was reviewed or was a compilation of three of our employees in San Francisco.

QNow looking at the second page of Exhibit 8, there's a photograph that appears on that page, what is that photograph?

AThat's a photograph of a cover of a book called Wonderbread and Ecstasy, the Life and Death of Joey Stefano.

QAnd who was Mr. Stefano?

AAccording to this he was a prolific -- had a prolific porn career, so he was a video porn star.

QWhat is Exhibit 9 represent?

AExhibit 9 is the ability to search our entire store by author, by the title of the book or what's commonly referred to as key word or a subject.

QI see on Exhibit 9 that there's a subject -- there's an entry in the subject list. If I first came to this Web site, would that be filled in the way it is here?

ANo, you would choose a subject that you'd be interested in by hitting the little arrow and the list of subjects would appear and you could click onto the one that you were interested in.

QAnd what is Exhibit 10 represent?

AIn this case it's as if somebody has clicked on children's books. And --

THE COURT: From P-9, from the prior exhibit.

AFrom the prior Exhibit 9 and then what you would get is what's found in Exhibit 10 and it indicates that it found 151 titles. And it lists them alphabetically. So the first page just lists the first dozen titles or so and it just goes from A to blank.

QWhat is Exhibit 11 represent?

AExhibit 11 is searching our site for any title that has the word cunt in it.

QAnd looking at the second page of Exhibit 11, what does that represent?

AIt found two titles, one called Cunt Coloring Book and one called Cunt, A Declaration of Independence, both of which have been around for over a decade.

QWould you look at Exhibit 12, please, and describe what that is?

AExhibit 12, because of our close relationship with authors in the community, as well as publishers and editors, very often editors and/or presses that are wanting to compile anthologies on a particular subject matter and are looking for people to contribute to that, will approach us about putting in what's called a call for submission. So it's essentially what the book is about, when they hope to go to press and what the guidelines might be for submitting a story for consideration.

QAnd after page one of Exhibit 12, what are the remaining pages of that exhibit?

AThese are actual examples of various book projects that somebody is working on that they are looking for people to submit short stories or personal reminisces or whatever of.

QWould you describe what's on the second page of Exhibit 12 that says at the top, "Call for submissions: brief tales?"

AAccording to the description it says that it's original short stories themed around men and underwear.

QAnd the last two pages of Exhibit 12, "Call for submissions: playing hard," would you describe what that is?

AThe title or subject, playing hard, erotic themed gay men sports stories.

QWould you describe what Exhibit 13 is, please?

AExhibit 13 is referred to as words from our staff. We encourage our staff to be seen as individuals by our customers, also people that visit the Web. So this is a way of employees to say something about themselves or have something that they've written published.

QNow why do you have that on your Web site?

ABecause it keeps our employees in contact with the site and interested in it and it gives them our personal flavor. It tells a lot more about who we are and the kind of individuals that make up our staff.

QDo you think this part of the Web site is significant in drawing traffic to your Web site?

AI wouldn't think it draws traffic. But I would think, for instance, after you've read a review by someone, if you're curious to know why they really like that book, you might see if, in fact, there was something about that person and their interest or whatever else about the site.

QWould you look at Exhibit 14 and describe what that is, please?

AExhibit 14 is, in fact, if you clicked on Emmanuel Zavier you would come to a site, a poem written by Emmanuel. He is an employee in our Los -- in our New York store. So this is a poem that he wrote and published in a little collection. So this is an excerpt from his book essentially.

QWould you look at Exhibit 15 and describe what that is, please?

AExhibit 15 is kind of a little biography of John Orcutt who moved from San Francisco to become our Los -- to become our New York manager. He's no longer the manager of the New York store. But he became quite well known with another San Francisco employee for writing what are referred to as, Betty and Pansy's Severe Queer Review. In this case what's sampled is New York, but they also did one for Washington, San Francisco, Los Angeles.

QAnd they're reviewing what?

AThis is just giving an idea of the kind of spice and flavor of how their reviews -- they're actually they're travel books in some respects, the kinds of things that they list as happening in various cities and locations and still with off colored humor.

QWell looking at page two of Exhibit 15, there's a heading Dicks and then there's a heading, Julies, what are those?

AThese are bars in New York City.

QAnd the text that appears after each of those headings, what is that?

AIt describes the bar, the environment, the clientele, the activity that might go on there, why you'd want to go there, why you'd want to stay away.

QWould you look at Exhibit 16, please? What is Exhibit 16?

AExhibit 16 is Sundays at Seven. When we had our original store in Silver Lake in Los Angeles we hosted a reading group that met for well over a year to encourage one another to improve their writing and that series became very popular and participants got to read from their work at the store to the point where two of the members of the group actually pulled together some of the pieces and sought out a publisher who published an anthology of the works from the series.

QAnd what are Exhibits 17 and 18?

ASeventeen and 18 are both samples on our Web site of contributions to this collection. So if you were to buy Sundays at Seven you would find these two short stories in the book.

QNow let's stop for just a second and talk about Exhibit 17, could you describe what it's about?

ASeventeen is called Shame on Me by Gavin Geoffrey Dillard. It's actually not a short story, it's a memoir. He was asked by a publisher of a periodical if he would write an article on shame. And he proceeded to do so thinking that shame is so intrinsically tied up with how most of us view sex and how he views sex, but the piece is on his sexual activity essentially.

QWould you look at page 2 of Exhibit 17, please? Now the portion of that, would you just read the first paragraph that appears after the five asterisks?

A"I remember watching my brother masturbate whenever our parents were out of town. I thought it was cool. Though I didn't really get the point, I finally tried it myself. When the fluid started to erupt from my inflamed cudgel, I went hauling for the toilet. I thought I might be peeing and the trail of tears dripped across the carpet from my bedroom through the hall to the bathroom made me ashamed."

QAnd is that consistent with some of the rest of the content that's contained in Exhibit 17?

AI'd say so, yes.

MR. HANSEN: Your Honor, I offer into evidence Exhibit 1 through 18.

THE COURT: Any objection?

MS. STEWART: No objection.

THE COURT: P-1 through 18 --

MR. HANSEN: Yes.

THE COURT: -- are received in evidence.

MR. HANSEN: Thank you, Your Honor.

QDoes A Different Light fear prosecution under this Act?

AWe do actually.

QWhy?

AWell again because of the notion of community standards and the idea of what might or might not be harmful to minors.

QDo you think in particular the paragraph I just had you read is the kind that might potentially subject you to liability?

AIt might, and from our perspective that would be one of the more innocent paragraphs that we might -- you know, if we were being careless or foolish would think, well it couldn't possibly mean something like that, but certainly a lot of what we carry is much more sexually explicit than this is.

QDo you also carry books that contain nude photographs?

AYes, we have a fairly large art and gift book section, many of which are photos of nude male or female figures.

THE COURT: Excuse me for interrupting, but you didn't suggest one way or another whether these photographs are on the Worldwide Web or not.

MR. HANSEN: About to ask that question, Your Honor.

QAre any of the photographs that contain nudes on the Web site?

ANot many at this point. Again, that has to do with the process of annotating, but certainly when we start to feature art books, it would be very difficult to sell what amounts to a picture book over the Web without showing some photographs from it.

QAnd do those books sometimes contain nude photographs on the cover?

AUsually they do, yes.

QAnd do you -- you do put book covers on your Web site, is that correct?

AYes.

QAnd do you anticipate increasing the number of book covers that appear on your Web site?

AAbsolutely.

QWhy is that?

AWell as I mentioned earlier, book selling is in a very difficult state right now. The climate is changing so rapidly and the margins are so slim that many of us are being driven out of business. And so one of the ways to try to compete with that, of course, is to try and keep our customers interested and that we think will take place, to some extent, over the Web, which means we'll have to provide more and more of what we sell on out Web site.

QWhat would be the effect if A Different Light were prosecuted under this Act?

AWell as I said, the shaky nature of book selling and even of our three stores, we would not have the financial resources for any kind of legal defense whatsoever. And one day of fines of $50,000 could literally put us out of business in a matter of weeks. It's that tough a business at this point.

QWhat will A Different Light do if the law is not -- if the law does go into effect?

AWell I would think that we'd have no choice but to close the Web site entirely. We think it's more important for us to continue to exist rather than to take the chance of some community somewhere finding something offensive about our Web site and putting up a challenge. Even if it was not a legitimate challenge, just the cost of defending that would bankrupt us.

QAnd do you think -- what effect, if any, do you think that would have on the gay and lesbian community?

AI think it would have a huge chilling effect. Again, it reinforces for young people that some -- of being gay or lesbian is shameful and disgusting and criminal. And it denies people access to information. We would have to resort to mailing again, and in order to mail to someone, they have to give you their name and address and a lot of people just prefer to remain more anonymous.

QIs there any technological means by which A Different Light could set up its Web site to insure that only adults had access to it?

MS. STEWART: Objection.

THE COURT: Lack of foundation or --

MS. STEWART: Right, Your Honor.

THE COURT: I don't know that he knows the answer to the question, or if he does, what the source of the information is. Sustained for lack of foundation.

QHave you investigated whether it would be possible for A Different Light to set up a system to verify the age of people who come to your Web site?

MS. STEWART: Objection.

AIn light of this pending law, yes, we have.

THE COURT: Pardon me? Excuse me. Ms. Stewart, you have to speak up. When you object, the witness has to know that and the witness has to stop talking, but he doesn't know what to do. So the rule is when someone objects, sir, you just stop talking and let us sort out what's going on.

MS. STEWART: Yes, Your Honor.

THE COURT: And your objection is based on what?

MS. STEWART: Based on it's eliciting hearsay and there's also a lack of foundation for that as well.

THE COURT: I'll let the testimony in to show not the proof of what's technically available or not available, but rather to prove what this witness did to find out that information and what either ease or frustrations he found, but not -- I won't receive it to prove that what somebody else told him is true, but just that what he went through. And I think the Court should know that, Ms. Stewart.

And I agree with your objection generally, but with the guidance that I've just given, I'll allow the subject matter to go forth. I don't remember the specific question on the table and we don't have a read back system, so you'll have to ask another question.

MR. HANSEN: Very well, Your Honor.

QDid you investigate whether it would be possible for A Different Light to set up an age verification system in order to comply with the Act?

AWe contacted --

THE COURT: Excuse me, sir, the answer to that question is yes or no.

AYes.

THE COURT: And then counsel will ask you another question.

QWhat did you find out?

THE COURT: Well that is, what did you find out, he could give a wonderful speech for awhile. I think you have to be a little more specific to find out what he did, what kind of folks he talked to, what efforts he made, that's what is really relevant to these proceedings since he's not an expert, nor did he -- he would be relying on hearsay which is okay for this sort of state of mind presentation.

QAre you aware that a law contains a defense if you accept a credit card?

AYes.

QDoes A Different Light currently accept credit card information over its Web site?

AYes, we do.

QCould A Different Light utilize that system as a surrogate for age verification for everyone who came to your Web site?

ANot for age verification but for, you know, whether some -- you can make, I suppose, the assumption that if somebody has a credit card number, that they are an adult. I don't know that children have credit cards. But the -- when we would ask our bank for verification that it's a legitimate credit card number, that's all they're giving us is that yes, it's a legitimate credit card number.

QDid you investigate what the nature of the expense of creating that kind of system would be?

AWe began to. I don't think we have a full story on it yet. But it would involve -- our bank told us that they couldn't verify credit card information with no financial transactions. So even if we put through a penny, that would do it. However, we can't imagine that our customers would like seeing any charge show up on their credit card statement.

QCould you elaborate on that a little bit? I'm not sure I fully understood.

AWell in order for our bank to tell us that yes, the credit card information submitted is accurate, they can't do it if somebody doesn't buy something essentially. So we can't just run the number through their system and them say yes, this is a real card. They're in the business of processing transactions and of making money off those transactions. They charge both us and the consumer.

So we would have to force through, even if it was a minimal transaction of a penny, in order for their system to verify it. However, and I don't know this, but I can't imagine they would let that stand for very long because they're not going to want to process something that is, you know, for one cent. So I would assume but I don't know that there would be charges involved if, in fact, they allowed us to do this.

THE COURT: Have you actually manipulated the direct access to the bank's little, I don't know what you call it, station, that's commonly at a cash register location or might be available to the 800 number folks who are taking an order over the phone? Have you actually manipulated that equipment yourself?

MR. LAURILA: Yes.

THE COURT: And is it -- I've used it and watched it being done but I've never stood there and done it myself. Isn't it correct that you -- one way to do is to swipe the card through to get the electronic information off the magnetic tape, and then punch in an amount of money telling the credit card supplier, whether bank or whoever is on the other end of the line, --

MR. LAURILA: Right.

THE COURT: -- what the size of the transaction, is that --

MR. LAURILA: That's correct. It doesn't actually process it. It doesn't send it out over the telephone lines until you actually put an amount in. And --

THE COURT: And something comes back that says what purchase is okay.

MR. LAURILA: That purchase is okay. I mean, it gives you an authorization number. However, that gives the merchant absolutely no protection whatsoever. Consumers are fully protected. But unless we actually have the credit card physically in our hands and can check the signature, even if we get an authorization back, if it proves that the card is stolen or anything, that money is immediately removed by the bank from our account.

THE COURT: My question is this, if someone is receiving a credit card over the Web or over an 800 number and checks the bank to see if the card is a proper one to be charged a $50 item, what happens if after that verification comes through the transaction is aborted? That is to say in retail sense if I were at the cash register, I say, oh, excuse me, I decided not to buy that book.

MR. LAURILA: We would -- if it was during the same processing period before they're all kind of batched together as a total, the card would be swiped again and a credit would be put through for the amount. If it happens within a specific period, then that cancels it out and it wouldn't appear on your statement. If, in fact, there was a 12 hour period, you would end up seeing the $50 and then the minus $50.

THE COURT: So you can't abort the -- as far as you know, and I know you have skill and ability from your point of view and you're not a credit card technician, but from your point of view you can't put through a $50 item and verify that it's a proper purchase for that card, charge for that card, and abort the process before it ever goes into the bank's records?

MR. LAURILA: No.

THE COURT: That was really what I was getting at, to see if there was any way to interdict the process and use it as a verification without actually making the charge.

MR. LAURILA: No, the banks are too smart to let you do that for free.

THE COURT: That's what I'm trying to find out, thank you.

BY MR. HANSEN:

QIs there also a cost to the seller when you take a credit card?

AYes, there is.

QAnd how does that work?

ADepending on the arrangement you have with your bank, it's always a percent, a certain percentage of the sale. In our case that would be from 2 to 3 and a half percent, as well as a per transaction charge of 35 to 50 cents.

QAnd if you were attempting to use a credit card system to verify age over the Web, those transaction fees or some other would be charged to you as the seller?

AYes, and if there was an amount being put through, it would be charged to the consumer as well, whatever that amount was.

QCould you absorb -- you testified earlier what percentage roughly of the people who come to your Web site actually purchase someone -- something and thus use a credit card?

AWe think 1 or 2 percent purchase something from our site.

QIf you had to absorb the cost of credit card verification for all 100 percent of the people who came to your Web site, could you do that?

AAbsolutely not.

QWhat would you do?

AWe'd have to close the Web site or find some other way of verifying age that didn't require that kind of expenditure.

THE COURT: Excuse me for interrupting. You say you can't absorb the cost, but I haven't heard you say that there was any way to establish verification at all other than buying an item and then crediting it back through. You're not aware, according to your testimony, that the bank would do a verification process and charge 50 cents or $1.00, are you?

MR. LAURILA: Well because our initial phone call with them, somebody there, and I don't believe they were as high up in the chain that we'd have to go to get the final answer, as I said earlier, said you could actually charge through a penny. But a bank even -- 3 percent of a penny is obviously, you know, there would be an outrage but we would still get charged the depending on if it's American Express or Visa, MasterCard, the 35 to 50 cents a transaction charge.

THE COURT: And theoretically if that were used for age verification for someone coming onto your site, it could be as high as 100 percent of the hits.

MR. LAURILA: Could be.

THE COURT: I gather that's what the plaintiff is trying to establish.

MR. HANSEN: That's correct, Your Honor.

MR. LAURILA: And it's not --

THE COURT: I'm not trying to help one way or another, I just --

MR. LAURILA: And it's not age verification, it's just that the credit card number is a real one. That's all it is.

THE COURT: I realize that there is some supposition in there that you haven't resolved and I understand it. Excuse me for interrupting, Mr. Hansen.

MR. HANSEN: Thank you, Your Honor.

BY MR. HANSEN:

QWould that system also present problems for you if people hostile to the subject matter of your bookstores came to your Web site?

MS. STEWART: Objection, leading.

AI would think so. I mean, it's a famous tactic that --

THE COURT: Wait a minute, there's an objection.

MS. STEWART: Objection.

THE COURT: Mr. Laurila, you have to stop talking when there's an objection, that's the problem.

MR. LAURILA: I'm sorry, Your Honor, I would if I knew there was one. I guess I'm looking at you and I need to be looking at --

THE COURT: Well you're also -- well you just have to listen.

MS. STEWART: I'll speak up.

THE COURT: There's probably a -- you can't see the witness and the two of you had better move the podium so that you can see. If she stands up --

MR. LAURILA: That actually would be helpful because I'm afraid she is behind it.

THE COURT: If counsel objects, she's going to -- probably better to go that way. Can you see her now?

MR. LAURILA: Yes, I can.

THE COURT: Thank you. The --

MR. HANSEN: The question, Your Honor, was whether the Web site would suffer if people -- if the procedure we just described went through and people who are hostile came to the Web site.

THE COURT: And the objection is based on what?

MS. STEWART: Based on leading, Your Honor.

THE COURT: Based on the plea, what does that mean?

MR. HANSEN: Leading she said, Your Honor.

THE COURT: Oh, I'm sorry?

MS. STEWART: I'm sorry.

MR. HANSEN: Leading, she objected that it was a leading question.

THE COURT: Oh leading, leading, okay. I'm sorry. All right, Mr. Hansen, you can straighten that out.

QWould there --

THE COURT: The question is withdrawn.

QAre there any other possible negative effects that would go -- that would occur to A Different Light Bookstore if you were required to set up a system of the kind we've been discussing?

AWell we've --

THE COURT: Let's talk about concerns.

MR. HANSEN: Fine.

THE COURT: He doesn't know what will happen.

ARight, well we --

THE COURT: It's the concern I'm interested in, what concern do you have.

AWe would fear that people who wanted to see us off the Web or to go out of business would go onto the site merely to trigger the charge that we would have to incur for them entering the site.

QDo you know of any other methods that A Different Light could use to set up an age verification system for visitors to its site?

AThere are a lot of services on the Web that are age verification for entry onto pornographic sites.

QCould A Different Light use those?

AWe could. However, we think that that would have a total chilling effect on the visitor to our Web site. I think the vast majority of people who go to our Web site are not interested in having to go to an adult site, register that they are an adult, be subjected to all of the pornographic teasers and advertising that comes in that site. And as far as I can see, you also have to pay a monthly fee to register and you get a PIN number, you get a personal identification number that then you can use on erotic sites for that site to release information to you. So given the wide spectrum of customers we have, whether it's a concerned parent or school teacher or your average citizen, they're not -- they don't want to have to identify with a site to get into pornographic areas. And to get into our site I don't think they'd bother.

QWhat do you think would be the effect on your Web site if you had to do that?

AWell I -- I mean it's pure speculation, but again, just given the nature of our site, I can't imagine that we can't be able to hold more than 3 or 4 percent of the people who currently go in, and that would be people who already have -- who happen to have those PIN numbers to go into other adult sites I assume.

QDo you think this would have a positive or a negative effect on your business?

AIt would have a very negative effect.

QCould you elaborate on that?

AWell again, it would force us to close the Web site. There would be little point in having the Web site only accessible to people who are willing to pay a monthly fee to be listed as an adult subscriber merely to browse our bookshelves and see what was there. And the whole point of aninimity, being able to do it without having to say who you are or where you're from or anything else would be impossible.

MS. STEWART: I have no more questions, Your Honor.

BY THE COURT:

QBefore we do any cross-examination, I have one question about your testimony of what you believe most users would -- how they would react to having to apply for and receive through your site or use another PIN number for another site, are you stating your opinion or have you based it on any sort of survey? I don't mean a colloquial survey ad hoc among a few friends, I'm talking about any attempt to contact people who are your customers to get some sort of a group of people to give you a response to this kind of a problem.

AWe haven't polled our customers directly, but I mean, again --

QI'd be surprised if you did.

AGiven that we've been in business for 20 years and, therefore, have had hundreds of thousands of customers, we have a pretty good sense of who our customers are and how they look at themselves and how they want others to look at them. And having to register on an adult site, some men might be willing to do it. I think very few lesbians would be willing to do it. And most wouldn't be willing to pay the money.

QI'm more interested in how you -- the methods for reaching that conclusion, that's all I'm interested in. And it's based on your own opinion over years of experience and contact with your customers?

AYes.

THE COURT: Okay, thank you. Cross-examine?

MS. STEWART: May I have a moment, Your Honor?

THE COURT: Surely. If you want to -- I can't tell whether your questions are going to be lengthy. If they're going to be more than five or ten minutes, we can take a recess now for the morning and come back and you can do it then. Or if they're going to be reasonably short, if you think, then we'll wait for the recess. I'm just trying to manage the --

MS. STEWART: I would just like a moment. I don't think that the questions are going to be --

THE COURT: Okay. Take a few moments and collect your thoughts.

(Pause)

THE COURT: Ms. Stewart, you go right ahead.

MS. STEWART: Thank you, Your Honor.

CROSS-EXAMINATION

BY MS. STEWART:

QCould you give me your pronouncement of your name again, please?

ALaurila.

QLaurila?

AYes.

QThank you. Now, Mr. Laurila, you testified that you felt that having to comply with this Act was going to produce negative consequences, such as perhaps your site having to even shut down, is that a fair --

AYes.

Q-- recharacterization of what you've testified to?

AYes.

QDid -- you've also indicated that for the reasons that you've added or you've alleged in the complaint that A Different Light would not self censor itself or its Web site in any way because of the Act, is that true?

AEssentially yes.

QCan you explain how that would be consistent then, what would cause you to have to shut down?

AWell we don't think there is -- if that's the issue, personally we don't think there is anything on our Web site that is harmful to minors. That's our political philosophy. But obviously it is just ours and there are bound to be a great many others who may differ with that opinion. And, therefore, it's kind of all or nothing. Either we get to say who and what we are and we get to present everything that we sell because that's the right of free speech and we don't feel threatened in that, or we have to very seriously consider closing down the whole site because economically we could not support -- we couldn't sustain any kind of challenge.

QBut at this point you've decided that you would go on the side of keeping your Web site and not self censoring, is that right?

AWell it depends on the decision today. If the law goes into effect tomorrow, we'll have to do some burning midnight oil trying to figure out whether to close it down immediately or what to do around it, but it would be a real dilemma for us.

QYou've indicated that you have the ability to use age verification other than the credit card, is that right?

AYes, through the adult services.

QThrough the adult services. What is the basis of your testimony that or that that is something that you wouldn't do then, couldn't do?

AWell again it's the cost involved to our customers and potentially to us as well. I don't actually know what the cost to us would be because we haven't taken it that far in discussing it with these providers, but they were all set up by the pornography industry to limit access to their sites. And so that means anyone, if that's the route we were going, anyone -- for anyone to get onto our site, they would have to go to one of these registration sites, register and be -- I would think be subjected to the stigma of, you know, registering on a site to look at pornography.

Either then they're going to view our site as somehow pornographic if they need that kind of authorization to get there, and perhaps without going there, getting into it or perhaps with doing it they're just not going to want to make that kind of commitment in terms of the monthly fee it costs and in terms of, I think, signing up for that kind of service when all they want to do is get onto a bookstore site.

QIs it fair to say then that you would not want your bookstore to be associated with pornographers? You don't consider your bookstore to be in that category?

AWell again it's all relative. We carry a lot of erotic material. And, you know, what's erotic, what's pornographic? So I don't -- we wouldn't -- you know, our argument saying we weren't pornographic wouldn't hold much weight really if somebody went through every item we sell. I mean, we carry all the mens magazines. And, you know, are they the gay equivalence of Playboy or Hustler or are they pornographic? Well to a lot of people they are, if not to most people.

ABut your problem in terms of using the other age verification system is you're concerned about being associated with pornographers? Is that what's causing in terms of your concern that there would be a chilling effect?

AThat is one concern. As I said, I think very few women and certainly very few non-gay or lesbian potential Web site visitors are going to do that to see our Web site. They're going to find it intrusive. I mean, that's the whole point of our Web site and of many Web sites is that you can do it anonymously. You can look at what's there, you can decide whether you want to look further. Whether, you know, you're not interested or it disgusts you or whatever, you can move on somewhere else. No one knows you were ever there.

And in order to verify with one of these services to prove your age, you know, you're going to have to identify yourself and register and I just don't think it's going to happen. I don't see a mother who wants information doing it or a schoolteacher or a librarian. We sell a lot of books to public institutions, libraries and schools and that sort of thing.

And they're just not going to do their research on our site if they have to go in and register as an adult site. In fact, maybe they can't. If they're doing it from work, it's conceivable that from their computers at work they have screening programs that wouldn't let them to go an adult site and register or certainly not pay the monthly fee as well.

QWell do you have any specific knowledge or research that supports that feeling that you just articulated?

ANo. Again, it's just 20 years of doing nothing but this. I feel as though I have a pretty good idea of who our customers are and what their interests are and what they would be willing to do.

MS. STEWART: No further questions.

THE COURT: I have one and there may be some redirect.

BY THE COURT:

QBut have you ever researched into whether your bookstore and company could develop its own verification system by engaging a software specialist let's say to put a proviso in your home page so that you'd have your own verification system which would not record people's -- forever people's identity or names?

But under the rubric, for instance, on the home page, the COPA requires us to register -- verify your age. In order to do so, do the following things. And this is strictly personal to your company. It's not registering on a porno site or anything like that, something that would be unique to your organization. Have you ever investigated that?

AWe haven't investigated it because we suspect it would be very expensive. Because, I mean, the only -- you have to then have some --

QI'm not asking for your speculation, excuse me, or you know, qualified opinion, I just need to know whether you investigated it at all so that you could help us with any hard data of whether such a thing is available and what it would cost and the answer to that is you have not done that.

AThe only thing we've investigated is if we use one of these other systems how much more would it cost us to have the manpower and all the rest of that to do it, but not actually to try to set up our own --

THE COURT: I don't know whether you've shared that with us or not, I don't think so. Mr. Hansen, have you asked him for that data? I don't remember.

MR. HANSEN: I believe so, Your Honor. I believe we did discuss the --

THE COURT: Fine, I took notes of everything, but I just didn't recall it all. That's all I have. Any redirect?

MR. HANSEN: No, Your Honor, no redirect.

THE COURT: Okay. Mr. Laurila, you're excused from the stand. Thank you very much, sir.

MR. LAURILA: Thank you very much, Your Honor.

THE COURT: Watch your step getting down. We'll have a midmorning recess for ten minutes. We're off the records.

(Court recess)

 

 

 

THE COURT: Welcome back, everybody. Please be seated. I'm sorry I took longer than I promised. I apologize. We'll get -- put more burden on the plaintiffs to use the time wisely. Ms. Beeson and Mr. Hansen, do you have another witness?

MS. BEESON: Yes, Your Honor. Plaintiffs call as their next witness, Mr. David Talbot.

THE COURT: Okay. Watch out of the wires there, sir. If you'd just stand behind the chair and put your left hand on the Bible and take the oath, please.

DAVID TALBOT, PLAINTIFFS' WITNESS, SWORN

THE CLERK: Please state and spell your name for the record.

MR. TALBOT: David Talbot, T-A-L-B-O-T.

THE COURT: Good morning, sir.

MR. TALBOT: Good morning.

DIRECT EXAMINATION

BY MS. BEESON:

QGood morning, Mr. Talbot. Could you state for the Court how you are currently employed?

AYes. I am the CEO and editor of Salon Magazine.

QCould you briefly describe your educational background for the Court?

AYes. I have a Bachelor of Arts Degree from the University of California at Santa Cruz.

QAnd, how have you been employed since college?

AI've been employed by a number of media institutions, The San Francisco Examiner, a daily newspaper in San Francisco, Mother Jones' Magazine, and I've also -- oh, Environmental Action Foundation in Washington, DC, and I've free-lanced for a number of publications including the New Yorker Magazine, Rolling Stone, and others.

QHow long have you been the CEO of Salon Magazine?

AFor three years.

QBriefly describe what Salon Magazine is, please.

ASalon Magazine is a daily general interest Web magazine. It's available only on the Web, there's no print version. We cover a broad range of subjects, everything from books and literature to politics, technology, family-related issues and sex.

QHas Salon been recognized in the media industry?

AYes, it has. Time Magazine called Salon the best Web site of the year in 1987. We've also received a number of awards from the Web industry, including two awards -- Webbie Awards, which are the equivalent of Academy Awards in our for best magazine. And, recently, for investigative reporting on White Water and Mr. Starr's investigation of President Clinton. We won best in-depth reporting award from the Society of Professional Journalists.

QHas the mainstream print press covered Salon Magazine?

AYes. We've been the subject of many stories in the New York Times, Wall Street Journal, Vanity Fair, and a number of other magazines.

QIn order to give a sense of the types of articles that appear in Salon Magazine, could you briefly describe what articles you are -- is in your magazine today -- are in your magazine today?

AWell, since I'm travelling, I haven't had access to today, but I know that there is a cover story on a new book, a biography of the Marquis de Sade, which examines the Marquis de Sade's home life. This is a book by Francine Du Plessix Gray.

QAnd, what are some of the other articles you're covering today?

ATypically we have about 15 or 16 different stories each day. And, we have various departments, a mothers' department, a technology department, a travel section, a book section. So we have one or two stories in each one of those sections. We also have some advanced coverage of Mr. Starr -- the House Judiciary Committee hearing today involving Mr. Starr. And, we normally have at least one book review, film reviews, that kind of thing.

QIs Salon a for-profit entity?

AYes, it is.

QWhere is Salon physically located?

AWe have two offices. The main office is in San Francisco and we have a second office in New York.

QAnd, how long has Salon Magazine been publishing on the Web?

AFor three years.

QWhat is Salon's current circulation?

AWe have over 700,000 unique visitors to our site each month.

THE COURT: What kind of visitors, sir?

MR. TALBOT: We call them unique visitors.

THE COURT: Unique.

BY MS. BEESON:

QAnd, could you explain how you determine that number?

AYes, we have a software system that counts each visitor, individual address, their computer address as they come to our site. That also translates to about 15 million page views per month was our total page view count in the month of September.

QJust to return to the unique visitor number for a moment, does that number represent -- under represent the number of individuals who access your site?

AYes, it does, because more than one individual can use a particular computer. For instance, an office or in the family home. American Online notoriously cashes people who come to our site through AOL. That is, they hold on to those statistics, so, again, it's difficult to extrapolate what AOL's actual -- the flow from AOL actually is. So we feel that 700,000 is a serious under estimation of our overall traffic.

QAnd, I apologize if you've answered this, but just to be clear, that is 700,000 visitors per month?

APer month.

QAnd, the 15 million page views is also a per month figure?

APer month, yes.

THE COURT: Could you ask Mr. Talbot what that means? Or are you going to ask him what page views means?

MS. BEESON: Yes, Your Honor.

BY MS. BEESON:

QCould you explain, Mr. Talbot?

AWell, the industry standard originally was a hit, but people found that that wasn't an accurate way of judging circulation because on one page -- if you access say a page with one -- beginning with story on it, there's a file for the graphic, there's a file for the photo, there's a file for the text. So in other words, just by accessing one page you could actually be getting three or four hits. So the industry moved to a standard known as a page view which is a more accurate standard. That means that one person downloads that one page and so 15 million means 15 million pages are being downloaded in the course of a month.

QHow does Salon --

THE COURT: Excuse me for interrupting, but what do you mean by download?

MR. TALBOT: Download, accessing, clicking on that particular file.

THE COURT: You're not talking about printing.

MR. TALBOT: No.

THE COURT: Thanks.

BY MS. BEESON:

QHow does Salon make money?

AOverwhelmingly at this point, and I would say 95 percent, that means roughly, of our revenue comes from advertising and yearly sponsorships. That is where a particular advertising -- advertiser will underwrite a section of Salon. In the case of our book section it's underwritten on a yearly basis by Barnes & Noble. Lexus, the automobile company is another advertiser. And, they underwrite a new department in Salon called, Brilliant Careers, which profiles various people who have accomplished much in their life in the field of arts, science and so on. So overwhelmingly it's advertising revenue that supports Salon.

QDoes Salon Magazine charge its viewers for a subscription?

ANo, it doesn't.

QWhy not?

AWe found -- that was part of our original intent when we launched Salon. Like most magazines, we thought that we would have a balance of income from both advertisers and readers, subscribers. But we found very quickly that much like commercial television, the Web really does not -- the Web culture, the people who use the Web, are not inclined to pay for it. There are very few sites at this point who have successfully charged people to access their sites. Notoriously, of course, the pornography sites do that and some specific financial service sites like the Wall Street Journal. But in many cases those charges are picked up by the readers' employers. And, so the individual is not actually paying for them. In the case of the Wall Street Journal, that's true for many of their readers.

One of our competitors, Slate Magazine, which is owned and operated by Microsoft, launched originally as a free site like Salon did, but about a year ago decided to go to a description model with disastrous results for their circulation. Their circulation plummeted overnight from, I believe, over 150,000 individual users each month to about 20 to 30,000 according to their most recent figures. That wouldn't be enough circulation to sustain Salon's business because advertisers expect you to have a certain circulation level before they'll do business with you. And, that typically is at least over 100,000 per month.

QHow does Salon maintain its Web site technologically?

AWe have a technical team on staff in San Francisco and our servers, which are essentially the printing presses in our industry are off-site. They're managed by a third party called Global Center in San Jose, California.

QWho has editorial control over the content of the site?

AThe Salon editorial team has complete editorial control.

QCan you estimate approximately how many articles are currently available from Salon Magazine?

AIn our archives?

QIn your archives.

AWe have tens of thousands of pages in our archives that have been built up over the last three years.

QAnd, could you explain what you mean in this context by a page?

AYes. Again, our longer stories, and by long I mean anything probably over a typical newspaper length, 1200 words, are normally split in two, at least two pages. In the case of very long articles, maybe as many as three or four pages. But I'd say at least half of our stories are contained on one page. It's like a newspaper with a jump, a jump page. In other words, you'll usually get the story in two distinct pages.

QUh-huh. Are all of the editions of Salon Magazine that have been published since you began available now from your Web site?

AYes, they are.

QWho can access Salon Magazine?

AAnybody with a computer and Internet connection. Anyone throughout the world, by the way. Ninety percent of our readers are in the U.S., ten percent overseas.

QWho is Salon's primary audience?

AWell, we've done a number of -- like most publications, we've done a number of marketing surveys aimed at finding out that information, because our advertisers require that information. They want to know who they're reaching by buying an ad in Salon. So we typically do at least two or three of these surveys a year. And, according to our latest survey, the typical age is 34. About 60 percent of our readers are male, about 40 percent female. As I said, 90 percent in the U.S., ten percent overseas. High education level, high income level per family, per household. And, well, I guess those are the key statistics.

QAre older minors an important audience for your Web site?

AI don't know if they're important but they're certainly included among our readers. We know that from some of the surveys we've done, also antidotally we have a reader forum. Salon is really divided into two kind of departments. One is our editorial content and the second one is our reader generated content. It's a reader forum known as Table Talk. It's actually the second most active reader forum on the Web. And, we have a number of subject areas, politics, family, travel, books, and people participate in those conversations. It's not live chat, but it's bulletin board chat, bulletin board conversation. And, we know, just antidotally, from our host and other editors who are in the reader forum, there are teenagers and college students who participate in those discussions.

QDo you restrict minors in any way from reading the editorial content on your site?

ANo, we don't.

QAnd, now I would like to ask a few more specific questions about the subject you just mentioned, which is Salon's interactive forum, Table Talk. How do people -- how do Web users post messages to your Table Talk forum?

AThey have to register in order to participate in Table Talk, that is post messages. But if you just want to go into Table Talk and view what's being discussed, you don't need to register.

QAnd, what do you mean by register?

ARegistering is a very simple process. It does not involve a credit card or any transaction of that nature. You just type in your name, a password and your E-mail address.

QAnd, is that all the information that Salon has about the persons who register for Table Talk?

AThat's correct.

QHow many messages per day are posted to Table Talk?

AAs many as 3,000 messages a day.

QAnd, do you have any way of knowing how many people read those messages as opposed to post them?

ANo.

QAre all of the communications in the Table Talk forum viewable using a Web browser?

AYes.

QIn other words, anyone that comes to Salon Magazine can read both your editorial magazine on the Web and also all of the content in the Table Talk forum?

AThat's right.

THE COURT: And, that latter is without registration of any kind?

MR. TALBOT: That's right, yes.

BY MS. BEESON:

QWhy is Table Talk an important part of Salon Magazine's business?

AWell, each medium, when it comes into existence, whether it's radio or television or the Web, only comes into existence really because it has unique aspects, unique features. And, one of the most unique features of the new medium, the Web, is the interactivity, the ability for readers to participate in the editorial process in a way. About 25 percent of our traffic is generated by Table Talk, which is quite significant for our circulation figures. And, so it's the ability for the reader to argue back with the editors, to exchange their own views, to create their own content. That's an essential feature of interactive publishing, of Internet publishing.

QI believe you mentioned previously that there are hosts for Table Talk. Could you describe what the hosts' job is?

AYes. We have two full time employees who do nothing but oversee Table Talk. Their job involves everything from participating in discussions, kind of taking the Salon flavor into those discussions, waving the Salon flag a bit. And, also bringing in special guests. Authors are a common guest in our Table Talk area. Helping lead the discussions with those authors. And, then lots of just housework. I've lost my password, can you help me find it, that kind of thing.

QDo the hosts attempt to generate discussion about the editorial content in the magazine?

AYes, they do.

QMr. Talbot, are you aware of the Act being challenged in this case?

AYes, I am.

QWhat do you know about it generally?

AThat it would compel sites that are deemed to have material offensive to young people to find some mechanism to block access to those young people to their sites.

QAre you able, having read the Act, to decide exactly what material it prohibits?

ANo. As in the case of the testimony this morning, this is one of the most puzzling and difficult conundrums for us, because Salon, as I said, has a wealth of material, tens of thousands of pages now in its archives, as well as the considerable amount of material we publish each day. And, it is very difficult to determine what would be acceptable in say San Francisco or New York, where we're based, as opposed to another community with another set of standards. Much of what Salon publishes is of a controversial nature, both in sexual terms and in political terms. Our investigative reporting has -- I don't know if you want me to go into this further, Your Honor, but --

THE COURT: I think --

MR. TALBOT: Maybe I'll wait for counsel to --

THE COURT: Wait for another question.

MR. TALBOT: Okay.

BY MS. BEESON:

QDo you believe, Mr. Talbot, that some of the online content that Salon makes available might be prohibited by the Act?

AI'm afraid it would, yes.

QOkay. I'm going to ask you now to refer to some exhibits. I believe that there is a copy of the exhibits left there on the witness stand.

AYes.

QAnd, if I could direct your attention to Exhibit Numbers 19 through 31.

MS. BEESON: Your Honor, these are also in the Exhibit Book.

THE COURT: I have them in front of me.

AYes.

BY MS. BEESON:

QCould you generally describe what these exhibits are?

AExhibit 19 is a copy of our home page. I believe this is from last week, Thursday, November 12th.

THE COURT: Excuse me, Mr. Talbot.

MR. TALBOT: Yes.

THE COURT: The question was, generally, what do these represent? The entire group of them.

MR. TALBOT: Yes, okay. These are printouts of material from Salon.

BY MS. BEESON:

QThat is every exhibit, 19 through 31, is a printout of content that is available from your Web site?

AThat's correct.

QAnd, again, as you started to answer, could you just describe briefly what Exhibit 19 is?

AYes. This is a copy of a recent home page. That's our cover, in other words, of Salon, dated Thursday, November 12th. And, the cover story features a review of Tom Wolfe's new novel.

QAnd, could you briefly describe what Exhibit 20 represents?

ATwenty is a copy of our archives, an index to our archives.

QThis is the page that would allow the reader to then search past issues of Salon Magazine; is that correct?

AThat's right.

QReferring you to Exhibits 21 and 22, could you describe what those two exhibits represent?

AYes. These are examples of columns by one of our regular columnists, Susie Bright. Susie Bright is a nationally commentator on sexual subject matter. She first became known probably as the editor of a lesbian journal called, On Our Backs. Susie has written a number of best selling books published by Simon & Shuster, HarperCollins and other publishers.

This particular -- the first one, Exhibit -- is that --

QTwenty-one, I believe.

ATwenty-one. The subject matter of this particular column is about the proclivity of some of her friends, female friends, for having sex with their boyfriends that involves anal penetration of their boyfriends.

QAnd, what is generally the subject matter of Exhibit 22?

AThis is another column by Susie, and it's titled Sand Hassles, and it's about how sex outdoors isn't everything it's sometimes purported to be, it involves certain difficulties, particularly for a woman. Sex on the beach, sand getting places where it really shouldn't go, sex in water being very difficult to actually perform and so on.

QDo you think that the content in Exhibits 21 and 22 is generally indicative of the content in Susie Bright's column?

AYes.

QAnd, now I'll ask you to refer generally to Exhibits 23 through 25 and explain what those three exhibits are for the Court.

AYes. These are examples of another columnist. We have two columnist who tend to focus on sexual subject matter. This is the second one. Her name is Courtney Weaver. Does a weekly column called Unzipped, and this is one of her columns.

QAnd, looking at Exhibit 23 -- I'm sorry, looking at Exhibit 24, what is the general subject matter of that particular column?

AThis is, again, another column by Courtney Weaver. It involves a trip to a -- that she and a friend took to a sex club in San Francisco, and she describes in fairly explicit terms what she saw that night.

QUh-huh. Do you believe that the content in Exhibits 23 through 25 is generally indicative of the content of Ms. Weaver's column in Salon Magazine?

AYes.

QDo you know -- do you have figures for the approximate number of page views of Ms. Bright's and Ms. Weaver's columns?

AThey are routinely some of our most popular authors. Susie Bright, depending on the subject matter, might get as many as 100,000 page views --

QUh-huh.

A-- for her work, for her column over a period of time.

QUh-huh.

AThat's not just the first day but over the course of, you know, time.

QAnd, do you have figures that relate to the unique visitors to those pages, those columns?

AI don't have that handy.

QAnd, now, if you could refer to Exhibit 26 and describe that exhibit for the Court.

AYes. This is another columnist, Philadelphia's own Camille Paglia. Camille Paglia is a Professor of Humanities here in Philadelphia at the University of the Arts. She's a nationally known -- internationally known commentator and scholar, has written a critically acclaimed book on the history of Western culture, and she has a regular column in Salon called, Ask Camille. It's kind of an irreverent but intellectually provocative column that focuses on culture and politics in which she fields questions from our readers.

QUh-huh.

AIn this particular column, she's answering a question from a fellow scholar, Professor Tom Wiggam at the University of Georgia, and he's asking, based on a comment from his wife, who happens to be from Paraguay, why it is that Latin culture seems to revere a woman's behind whereas our own culture seems to revere woman's breasts. And, Camille attempts to answer that in an entertaining and very enlightening way.

QAre Ms. Paglia's columns controversial?

AYes, they are.

QAnd, do you have information from readers to that effect?

AYes. She routinely sparks a torrent of mail, both pro and con, not just for her views on sexual subjects, of course, but on macadamia and politics and so on. And, that, by the way, is something that Internet sites thrive on, that controversy really is the meat and potatoes in a big way of Internet publishing. The ability and the willingness of Internet publishers to publish things and to discuss things among adults that other media are loath to do is one of the primary reasons that the Internet came into existence, I believe.

QUh-huh. If you could now refer to Exhibit 27 and

describe --

THE COURT: Excuse me for interrupting, but the Camille Paglia column example was P-25 and I think -- it was 25 in my book anyway, and you talked about it being 26. At least that was my note. Whatever you said before, it was P-25.

MR. TALBOT: Yes, that's -- 26 --

THE COURT: I may have misheard what you said but it is 25, okay.

MS. BEESON: My book may be out of order. I apologize, Your Honor.

THE COURT: That's just what I wrote down and I didn't want to make a mistake. Sorry.

BY MS. BEESON:

QAnd, now looking at what in my book is Exhibit 27, could you describe that exhibit for the Court?

AYes. Exhibit 27 is again an excerpt from our Table Talk section, our reader forum. This is a discussion that the readers undertook of a column by Courtney Weaver. And the column addressed the inability of a number of men to find women's point of pleasure and to stimulate it accurately.

QAnd, do you believe that this particular posting or discussion in Table Talk is indicative of many other discussions in Table Talk?

AYes. We don't police Table Talk for this kind of matter.

THE COURT: We don't what? Pardon me?

MR. TALBOT: We don't police Table Talk --

THE COURT: Right.

MR. TALBOT: -- to screen this kind of thing.

BY MS. BEESON:

QUh-huh.

AWe do have some rudimentary, some very basic guidelines in Table Talk and we make an effort to encourage our readers to follow them. But being sexually explicit is not off bound, out of bounds in Salon's reader forum.

QIf you could now refer to Exhibit 31 and describe that exhibit for the Court.

AYes. Thirty-one is a table of contents from Mr. Starr's Report to Congress.

QDoes this exhibit represent the entire report?

AYes, it does. Oh, actually, no, it's an excerpt.

Thanks.

QOkay. Is the entire Starr Report available from Salon Magazine's Web site?

AYes, it is.

QIf you could now turn in this exhibit to what is marked at the bottom of the page, page 11 of 121 in the printout. It's in the bottom left-hand corner.

AOh, okay. Yes, I've got it.

QAnd, going down three paragraphs, three full paragraphs, could you please read that paragraph for the Court?

AOkay. This is an excerpt from the Starr Report. "According to Ms. Lewinsky, she and the President kissed. She unbuttoned her jacket, either she unhooked her bra or he lifted her bra up and he touched her breasts with his hands and mouth. Ms. Lewinsky testified, I believe he took a phone call and so we moved from the hallway into the back office. He put his hand down my pants and stimulated me manually in the genital area. While the President continued talking on the phone, Ms. Lewinsky understood that the caller was a member of Congress or a Senator, she performed oral sex on him. He finished his call and a moment later told Ms. Lewinsky to stop. And, her recollection, I told him that I wanted to complete that. And, he said that he needed to wait until he trusted me more. And, I think he made a joke that he hadn't had that in a long time."

QDo you believe, Mr. Talbot, that these excerpts in Exhibits 19 through 31 could put Salon Magazine at risk under the Act?

AThey very well might.

MS. BEESON: Your Honor, I would like to now move into evidence Exhibit 19 through 31 if I may.

THE COURT: Assuming you have, is there any objection? Ms. Stewart, do you object to the offer?

MS. STEWART: Your Honor, all -- we have no objection except to 31.

THE COURT: And, your -- P-19 through -- we didn't cover all of these, I guess, but P-19 through 30 are received in evidence. And, your argument on 31?

MS. STEWART: Your Honor, the Starr Report plainly -- if I just may have a minute, Your Honor. The Starr Report, Your Honor, is clearly something that is outside of the scope of the statute, notwithstanding this witness's views. This is something that specifically was addressed by Congress when the Bill was being debated and it was made plain by the proponents of the legislation that specifically the Starr Report would not be covered within the scope of the statute because of it's political value.

THE COURT: Where does that determination of Congress recorded somewhere?

MS. STEWART: Your Honor, in the House Report that -- if I may just have a moment, I have a citation for you.

(Pause)

THE COURT: Are you talking about the report -- Bliley Report of HR105-775?

MS. STEWART: It's in the Congressional Record, Your Honor. It's 44 Congressional Record H9902-01.

THE COURT: 8902 did you say?

MS. STEWART: And, the specific page number -- H -- I'm sorry, H, Your Honor, as in Harry, 9902-01. And, the specific case cite of the discussion is H9910.

THE COURT: And, what does it say? If it's brief, otherwise I'll read it some other time.

MS. STEWART: Your Honor, beginning at the top of that page, the first full paragraph, "A question would be if a commercial entity took the Starr Report, which was not copyrighted and put it out on the Web as part of their business-making enterprise. But a commercial business that put the Starr Report out on the Web and did not restrict it with filtering information, would that commercial enterprise be subject to a penalty under the Bill?" Mr. Oxley is speaking. "Mr. Speaker, will the gentleman yield?" Mr. Frank of Massachusetts, "I yield to the gentleman from Ohio." Mr. Oxley, "Mr. Speaker, I thank the gentleman. The answer is no. Because the harmful to minors has been interpreted by the Courts. It defines harmful to minors as not covering content which taken as a whole has serious, literary, artistic, political or scientific value." And, I think it's pretty clear this has political content.

MS. BEESON: May I respond, Your Honor?

THE COURT: Sure.

MS. BEESON: I have reviewed the law being challenged in this case and I don't believe that the Starr Report is mentioned in it anywhere explicitly.

THE COURT: In the statute?

MS. BEESON: In the statute itself being challenged. We are obviously offering this exhibit as evidence of some of the content that Mr. Talbot is afraid, having read just the law, he could be prosecuted for.

MS. STEWART: Your Honor, the question of value is a determination that pursuant to the case law will be one that is a question of law to be determined by the Court.

MS. BEESON: I believe that's correct, as well, Your Honor, and that is why I believe it's for the Court to decide whether this particular exhibit could or could not put the witness at fear of prosecution.

THE COURT: Sure. I'm going to receive the exhibit in evidence for that purpose and conduct the necessary evaluation. Do you have other questions of the witness?

MS. BEESON: Yes.

BY MS. BEESON:

QMr. Talbot, would it be consistent with Salon Magazine's business model to verify the age of all of its users?

ANo, it wouldn't because this would have a discouraging effect on people trying to access our site. And, as I said earlier, since virtually the lion's share of our revenue comes from advertising which is based on maintaining a high circulation level, it would not only hurt our circulation, it might put us out of business.

QUh-huh. Do you currently accept credit cards for any purpose on your Web site?

ANo, we don't.

QCould you require a credit card before providing access to material available on the Web site?

APardon me?

QCould you require a credit card?

AIt would place enormous burden on us for a couple of reasons. One is, we would need to set up such a registration system. That would typically involve spending between 60 to $80,000 to, number one, buy an oracle data base software program, and number two, buy the servers, the machines, to run that software. We would also need to hire an employee to maintain that -- those machines and we would need to subcontract out that service to another company to actually operate it if we didn't hire those employees on staff.

MS. STEWART: Your Honor, I would like to move to strike the witness's response as being without foundation and not responsive to -- a lack of foundation for that response.

THE COURT: The objection is tardy, but let's find out. Ms. Stewart raises the issue of where he got the information, and even though the objection is tardy, I will require a foundation.

BY MS. BEESON:

QMr. Talbot, could you explain to the Court how you came about these figures?

AYes. I asked my technical staff to research it once we became aware of this law.

QAnd, who did they contact to obtain the information?

AThey contacted Oracle because Oracle is known as a leader, a leader purveyor in this field, a leading vendor.

QAnd, the I believe 50 to $60,000 figure you quoted was a figure quoted to you then from Oracle?

ACorrect.

THE COURT: Let's find out what you asked. What did your technical people ask Oracle for? Do you know?

MR. TALBOT: Yes.

THE COURT: I don't know what your involvement -- were you personally involved in setting up this, if you will, request for informal quote?

MR. TALBOT: I did talk to my technical staff, yes, a Web Master about it.

THE COURT: What did you determine ultimately that your staff asked Oracle for?

MR. TALBOT: He asked what the cost of such a data base software program would be.

THE COURT: What does that mean? What does that mean?

MR. TALBOT: In other words you need to, when you're asking for this kind of information from your customers, you need to have a program that takes care of that, that addresses those needs.

THE COURT: I understand that. But what kind of program did you ask him about?

MR. TALBOT: One specifically for credit card registration. And, that cost, also, Your Honor, involves not just the cost of the software but the machines to run it.

BY MS. BEESON:

QDid you also request information about any per transaction fees involved in maintaining a credit card verification system?

AYes. My understanding is -- and this is second hand, by the way, that it would cost between one and two dollars per transaction. Now, if we're not -- we're not going to be charging these people because it would just be to verify age, of course, there would be a loss to us on each transaction then.

QAnd, what do you believe the impact of that fee could be for the 700,000 unique visitors that you have to your site?

AWell, our circulation would literally plummet overnight.

Again, there are many different watering holes for the people who prowl around the Internet to go to. And, the overwhelming majority of them are still free. And, if suddenly Salon were to put up a gate saying, you have to register and we need your credit card number to access our site, that would, we estimate, reduce our traffic, our circulation, to ten percent of what it currently is. We cannot sustain our business. We couldn't operate our business, we couldn't ask advertisers to buy space in Salon with ten percent of our circulation. So it would put us out of business. And, that's the key thing here, the dampening effect on our circulation, it's much more worrisome to me than the cost of buying the software.

THE COURT: Ms. Beeson, while there is a lull here, I'm going to be rude enough to interrupt and ask something directly related to what you just asked. Did you ask your technical people to ask Oracle or anybody else whether a -- instead of using a credit card verification system of some kind whether a freestanding software program for the sole purpose of registration in your archives as opposed to some other type of off-the-shelve credit card registration system would be possible? Did you ask about that?

MR. TALBOT: No, Your Honor, we didn't ask Oracle about that. The only other option we explored were the adult services that were mentioned earlier today.

THE COURT: Okay, thank you.

BY MS. BEESON:

QNow, Mr. Talbot, your testimony regarding the impact on your circulation, do you believe that impact would be the same for any mandatory age verification for entry to your site regardless of whether it was through a credit card or other means?

AYes. Any time you stop the normal impulse of a reader to click on your site, that -- you lose some traffic right away. We know this, for instance, because during the first two and a half years of operating our reader forum, Table Talk, we did not have view only option. And, let me explain that. You had to register not only to post a message but even to read other people's messages. We determined that actually that was discouraging a certain amount of traffic from going into Table Talk, people who just wanted to read what was there. The term on the Internet is to lurk. And, there is a lot of lurkers on the Internet who are just curious and don't want to participate. As soon as we started -- we initiated this view only option, our traffic to Table Talk increased significantly. I think it was over 25 or 30 percent. So people don't like to hit walls, people don't like to hit gates of any kind on the Internet. They want to roam freely. That's the typical nature of the Web user. And, there are so many sites out there even with this law that would still be free, more of the kind of family-oriented Disney sites, the sort of mainstream media organizations, like CNN and so on, that any kind of independent and somewhat controversial and risk taking site like Salon would be the only site that would be penalized by this, because we would drive readers away by putting up any kind of screen that they have to pass through.

QSo in terms of the impact on your business due to decreased circulation, which would then affect your ability to interest advertisers, you believe any age verification system, regardless of whether a credit card is required, would have that impact?

AYes, it would.

QI apologize, Your Honor, for that. I was trying to sum up and got a little convoluted there. Would you like me to restate it or --

THE COURT: No. I understood. You ask the same question twice, I heard it both times.

MS. BEESON: Okay. I apologize.

MS. STEWART: I was trying to get in there, Judge. He answers so quickly.

THE COURT: They're both leading questions.

MS. STEWART: Correct.

THE COURT: I understand that's Mr. Talbot's opinion.

BY MS. BEESON:

QDo you know of any other reasonable measure that Salon Magazine could take to effectively restrict minors from accessing it's online material that is harmful to minors?

AWell, as I mentioned we did explore the adult -- one service is called Adult Check -- Adult Check, these adult services. And as Mr. Laurila testified this morning, those are typically associated with pornography sites, they carry a heavy stigma and on top of that there is a cost to the user, I believe, of $10 a month is what we found with Adult Check. And, you're required to get a PIN number from the service. For us to send our users to a third party, again, would send out circulation plummeting downwards and kill off our business which is so dependent on advertising. I think also the stigma to our advertisers would be considerable. Advertisers wouldn't want to be associated with a site like Salon that sent its readers through a pornography-related site like Adult Check, where they're subjected to lewd images, pornography, pornographic come-ons and that kind of thing.

QJust to go back very briefly to a topic that we discussed before, and that is your fear of prosecution under the Act, has Salon Magazine's content been considered controversial?

AYes, part of it. I mean, Salon is, as I said, a general interest publication, so there's much in Salon that people would be happy seeing in their family newspaper. Probably a majority of what's in Salon. But again, one reason -- and the staff of Salon came from a newspaper background. Most of us worked with the San Francisco Examiner so we're very aware of the constraints and the dictates of working within that kind of media organization. But one of the great promises of the Web was that you could speak more honestly and carry on conversations in a more adult and frank fashion about subjects like -- controversial subjects like sex and politics and so on. And, that's part of our key editorial mandate. And, it's part of the reason for Salon's success.

QHave national lawmakers spoken out against content in Salon Magazine?

AYes. We've been subjected to harassment from a number of quarters. Salon, for good or worse, is probably most known at this point for breaking a story about Congressman Henry Hyde and his adulteress affair. And, soon after that story was posted on our site, the Speaker of the House, Newt Gingrich and the House Whip, Tom Delay, both called formally on the FBI to investigate Salon. We were also the subject of a Wall Street Journal editorial that called on Ken Starr, Mr. Starr, to extent his investigation to Salon because of the content of our stories. We've also been the subject of harassment from a number of right-wing legal organizations, including the Landmark Legal Foundation because of our coverage, ongoing coverage of Mr. Starr's White Water investigation. The Landmark Legal Foundation attempted to subpoena us along with the New Yorker Magazine and a number of other publications. And, as a result of fighting off that subpoena, Salon incurred substantial legal costs.

QMr. Talbot, what will Salon Magazine do if this law goes into effect?

AWell, it's really a daunting prospect. I mean, we're faced with kind of, you know, impossible choice. On the one hand, if we choose to comply with the law, we'd have to spend hours -- hundreds of hours of editorial time going through our thousands of pages of archives and deleting everything that we think might be harmful to a minor under the Act. It would also have the consequence of purifying our site, so to speak, to make it more acceptable to the most conservative community in the U.S., since we publish all over. That would, I think, change the whole editorial character and personality of Salon. And, I think also drive down our circulation considerably. Or, we would be faced with the prospect of defying the law and attempting to tough it out and incur the $50,000 fines, which ultimately would bankrupt Salon. And, certainly, it's difficult to edit a publication from a jail cell so that would be a hardship as well.

As I said earlier, if we attempted to comply with the law and install the kind of system, screening system that is required under the law, that would again depress our circulation to such an extent that Salon would no longer be a viable business. Salon is struggling to make a profit at this point like most start-ups on the Web. We're in the start-up phase. This is the great part of this industry. It's an entrepreneurial industry. It's unleased so much creative and intellectual energy and -- but most sites are still struggling to make a profit. We think we're about a year away from breaking even, which is going to be a big milestone, not only for us, but I think for all publishing on the Web, because Salon is seen as kind of a bellwether for the health of publishing on the Internet. And, if we're forced to install this kind of screening system, it could send our business plan, you know, plummeting downwards.

MS. BEESON: I have no further questions, Your Honor.

THE COURT: Ms. Stewart, do you have any cross-examination?

MS. STEWART: Yes, I do. May I suggest, Your Honor, that this may be a good time for a break for lunch.

THE COURT: It's not a good time for usual time, because I want to do the cross-examination and finish the witness before we have a mid-day break.

MS. BEESON: Yeah. Your Honor, I apologize, but Mr. Talbot actually needs to catch a train to New York at about 2:00.

THE COURT: Well, Mr. Talbot's schedule will have to go by the boards. The Court's schedule is, and it makes sense for the in-take of evidence into this Judge, that we do it all at one time and let the cross-examination go forth.

MS. STEWART: Thank you, Your Honor. May I have a minute before beginning?

THE COURT: Sure.

(Pause)

THE COURT: Ms. Stewart, thank you. I was dreaming up a good question to ask you at the end of the cross-examination.

MS. STEWART: To ask me?

THE COURT: Keep you busy.

CROSS-EXAMINATION

BY MS. STEWART:

QMr. Talbot, does your site screen material for obscenity?

AWe use our editorial discretion when publishing stories. We won't publish anything. We have very exacting editorial standards but it's our own discretion and not that of anyone else. We don't use any software system if that's what you mean.

QBut the answer then is yes?

AYes.

QDo you sell things on your site through -- using credit cards?

AWe've begun through a third party to offer some Salon paraphernalia through our site, coffee, t-shirts, that kind of thing.

QSo you have an account with a credit card company established for thought purposes?

ANo, we have an account with a third-party vendor, so we don't have credit card capability within our company.

THE COURT: Excuse me for interrupting, but how does that work? On your home page, do you go to maybe something like products and you click on that and you can buy some things. And it's just that you don't manage the in-take from that, a third-party does that.

MR. TALBOT: A third-party does the whole thing. For instance, Your Honor, with our books department, which is sponsored by Barnes & Noble, if you want -- you read a review of a book in Salon and you're interested in buying it, you click on the Barnes & Noble button and you go to their home page and you conduct your business there.

THE COURT: Thank you.

MS. STEWART: Thank you, Your Honor. No further questions.

THE COURT: Any redirect?

MS. BEESON: Nothing, Your Honor.

THE COURT: Made more efficient use of Mr. Talbot's time than he expected, I'm sure. Mr. Talbot, you're excused.

MR. TALBOT: I appreciate it. Thank you, Your Honor.

THE COURT: Other than argument, Ms. Beeson, do you have other evidence to offer and maybe some documents?

MS. BEESON: Your Honor, we would just like to move into evidence the declarations that were served on Ms. Stewart and delivered to your office.

THE COURT: You have to go through them seriatim please.

MS. BEESON: Yes.

THE COURT: I have to deal and it's really hard -- I get stuff in the mail but I'm not sure what's in the evidentiary record and I want to be sure.

MS. BEESON: This would be declarations A through G of --

THE COURT: What is the last letter, please?

MS. BEESON: G.

THE COURT: G. Okay. They are Christopher Finan, Adam Glickman, Professor Hoffman, Ernest Johnson, Robert Speyer -- Roberta Speyer, sorry, Barry Steinhardt and Patricia Nell Warren; correct?

MS. BEESON: That's correct, Your Honor. And, there are exhibits accompanying most of the declarations. Would you like for me to go through those or just --

THE COURT: Well, at least identify them generically and offer them to see if --

MS. BEESON: Yes. They are all printouts of content from the plaintiffs' Web sites in this case.

THE COURT: But they are the ones attached to these declarations physically --

MS. BEESON: Yes, they are, Your Honor.

THE COURT: -- in the books that you gave me?

MS. BEESON: Yes, Your Honor.

THE COURT: Let me just check an example for instance. Mr. Finan has, it looks like, two tabs; Mr. Glickman has a bunch --

MS. BEESON: Seven, I believe, Your Honor.

THE COURT: Seven?

MS. BEESON: Uh-huh.

THE COURT: Professor Hoffman doesn't have any tabs at least.

MS. BEESON: That's correct.

THE COURT: Ernest Johnson has 20?

MS. BEESON: Yes, Your Honor.

THE COURT: Roberta Speyer has it looks like ten.

MS. BEESON: That's correct.

THE COURT: Barry Steinhardt does not have any. And, Patricia Nell Warren has five; correct.

MS. BEESON: Yes, Your Honor.

THE COURT: Ms. Stewart, do you have any objection for the purposes of the TRO proceedings to the receipt of these declarations and exhibits?

MS. STEWART: Your Honor, subject to our continuing the same objection that we had with respect to the live witnesses as to the extent of their actual knowledge about the cost of the credit card -- complying with the credit card defense and the Act. Credit card or related defenses.

THE COURT: I don't know whether any of these -- I'm not going back on what I told you, I read all this material, but I don't remember what specific witness may have mentioned the cost of identifying or age cal -- identifyingusers. Is there any of that type of material in these exhibits that you just offered?

MS. BEESON: Yes, there is, Your Honor, in several of the plaintiffs' exhibits. And, similar to the live testimony it represents their best efforts to determine whether currently they can comply with the Act.

THE COURT: I think to the extent that the defendant wants to object to this material, you have to be specific as to where it is, and I would like you to find it and object to it seriatim in each of these declarations or exhibits over the lunch hour so that we can have a record of what you're objecting to. I don't mind -- I understand the basis for it, but if we don't have a record, and we don't look back on what we have, we'll be sorry we didn't do it carefully. So subject to those objections being articulated in the record, the Court will receive in the evidence -- into the evidentiary record for the purpose of the TRO hearing, the declarations and exhibits just identified, A through G and their attachments. I think we ought to, at the same time, so when we read this again we don't overlook it, if these -- unlike the general rule that evidence offered at TRO hearings is likely to fall into the rule that it will be used at the PI hearing and then used at the trial of the case, without further effort, that presumes as its foundation that the parties have the right to cross-examine that material and have their due process.

Here the defendant is waiving that for purposes of this hearing, but I know from previous discussions that parties have reserved the right to take depositions of declarants, I assume to exercise their right of discovery and cross-examination if the deposition might be offered with the declaration. I can concede that might happen. So that the -- I need to know whether the defendant is reserving any exceptions to the declarations beyond the cost and complications of credit card or age-related barriers or checking for any of these witnesses and reserving the right to take any of their depositions in aid of either discovery or modifying, if you will, or adding to their declaration at the next proceeding. Ms. Stewart?

MS. STEWART: Your Honor, if we could answer that question after lunch as well. As the Court knows, we got this stuff yesterday.

THE COURT: I just think it's a house -- it's housekeeping now but it becomes more important later. We'll be sorry we didn't do this, be ambiguous and then we're in the suit. So it doesn't mean that this material is not received or will not be considered by the Court for the purpose of these proceedings subject to the technical objections just made that will also be put on the record after lunch or mid-day break if you don't have lunch. Ms. Beeson, do you have other documents to offer?

MS. BEESON: No, I do not. I would like to raise with the Court again the issue of the fact stipulation and whether you think that would be a worthwhile pursuit at this point over lunch or whether you think it would not be helpful.

THE COURT: I don't know precisely what the factual issues are that you have in there. Some of the work that we have to do today and I'm prepared to do is fact specific, but mostly in the field of compliance -- or I'm sorry, feasibility of compliance, which is really what we've been talking about in the last few minutes. Let me look at my list here.

MS. STEWART: Your Honor --

THE COURT: Could you just excuse me a minute, because I want to find out whether I can add anything to the notion of stipulation. Almost all of my factual voids in here have to do with the subject of feasibility, different kinds of digital verifications and so forth. If there are any stipulations on that, that would be extremely helpful. There are terms used in these materials, such as digital certificates to verify age, and that kind of thing, that I don't really have much information on in these papers and I'm not sure that that's easily stipulated to.

MS. BEESON: Yes.

THE COURT: Excuse me just a moment. Evidence regarding the ability of minors to access material from foreign sites, meaning outside the United States. Evidence regarding ability of minors to access material from non-commercial or amateur sites. Evidence regarding ability of minors to pose as adults by using a credit card, which is back in the feasibility section again. Evidence regarding alternative means that are less restrictive, such as Net Nanny as a generic concept. In the absence of that, I would refer to a declaration on the subject, but one or more there may be evidence on that. Those are factual things that I made notes on and I think they're very difficult to stipulate to over lunch hour if you don't have hard materials to show someone.

MS. BEESON: Yes, Your Honor. I don't believe that any of those subject areas are part of the current negotiations over a factual stipulation.

THE COURT: Let me ask my law clerks whether their -- since we've been working together on this, whether they think the generic material about the Web and so forth is useful right now.

(Pause)

THE COURT: I've decided that we don't need generic Web type information for these proceedings as I perceive what my task is here today. So I welcome the material but you wouldn't likely see it in print very soon. My plan is, Ms. Stewart, was to ask you whether you want to offer in written materials and rest the Government's case for today and then go to argument and when you would like to do that. If you want to do it now, we can spend ten minutes doing it. If not, we can take a recess and do it after the noon recess. I assuming that Ms. Beal (sic) is finished.

MS. BEESON: Yes, I am through, Your Honor.

THE COURT: I mean, the plaintiff has rested its case in chief in the -- for the TRO proceedings.

MS. STEWART: Yes, Your Honor. I would ask to do it after the luncheon recess and to have some guidance as to what kind of parameters the Judge desires in terms of length of time for lunch.

THE COURT: Well, I don't know what everyone is going to be doing, but typically I take an hour for lunch. If you want an hour and fifteen minutes or so, we can come back at 2:00, if that will help anybody get their thoughts together, that's fine with me. That's not an excessive amount of time and -- because what I'll need from the defense, is what specific documents are you offering into evidence and to stand up to any challenges the plaintiff object to and give your offers of proof, we'll argue those if there are any. And the answers to the questions that we -- the two other tasks you have are to point in the record in the plaintiffs' exhibits to the technical material on costs and feasibility of registration of age, I'm speaking generically now, and to lodge your objections to those materials. So you have to do some searching. I don't think it's terribly complicated, but somebody has to do it. You've got the ball because you objected.

And, then the question of whether or not you reserve any right to take discovery or other responsible action with respect to declarations here today to preserve your rights to inquire further on those with respect to using them at the PI hearing. So you have three things to do then. It will be very helpful to the Court to get that done.

So we'll recess until 2:00 and we'll be back. I think I called Ms. Beeson by a popular last name but I didn't mean that.

MS. BEESON: That's okay.

(Recess)

THE COURT: Welcome back, everybody. Please be seated. I regret -- first of all, I compliment everybody for being timely. And, I know from having seen folks in the quarters of the courthouse we were all back here, but I was fine tuning some questions I may want to ask counsel this afternoon. I figured the taxpayers were getting their money's worth but maybe you guys weren't.

Let's -- get my notes going there. The three things that the Government wanted to work on or I asked them to work on --

MS. STEWART: Yes, Your Honor, we're ready.

THE COURT: Ms. Stewart.

MS. STEWART: Yes, Your Honor, as to the exhibits we would just note that attached to our brief that we transmitted to the Court yesterday was the House Report. We don't believe that it's necessary to offer that formerly as an exhibit given that it's a document of public record. However, if the Court disagrees, we would so move its admission.

THE COURT: As long as you understand that the -- whether it's in evidence or not, I believe the Court in this kind of proceeding has the responsibility of looking at it and considering whether the references to it or the substance of the report as it responds to whatever references he made is reasonably reliable or not. If you site to a part of the report that is ephemeral, it doesn't mean that much. The touchstone of the proceeding before any Court is reliability and even if the evidentiary standards are understandably a little lowered for this type of proceeding, let me point out to both sides that I will look at that report and look at your references to it and consider it in deciding this motion. So whether it's in evidence or not, I don't think makes a lot of difference at this point unless the plaintiff insists that it be put in the record.

MS. BEESON: No, I have no objection at all.

THE COURT: All right. Thank you.

MS. STEWART: As to declarants, we certainly would reserve all of our rights to depose and otherwise obtain information through the discovery process.

THE COURT: And, your -- by doing that, as I understand it, I interpret it, if the plaintiffs want to offer those declarations at the preliminary injunction they have to either get a statement that you won't object to them or upon objection they're going to have to produce the person either for deposition by agreement or in court at the time of the hearing.

MS. BEESON: Yes, that's understood, Your Honor.

THE COURT: And, that's as to A through G of that list of declarants, correct?

MS. STEWART: Correct.

THE COURT: It's just a group of folks that we're talking about.

MS. STEWART: That's the declarations in the book.

MR. HIRT: Right.

MS. STEWART: As to the third item, --

THE COURT: Yes.

MS. STEWART: -- we would object, Your Honor, to -- and if I just identify the paragraphs by the declaration a Tab A consecutively will that --

THE COURT: Go ahead.

MS. STEWART: The declaration FinAof Finan at Tab A, our objections with respect to the credit card issue, Your

Honor, --

THE COURT: Let me be sure I'm identifying --

MS. STEWART: -- or I should say affirmative defenses to be more inclusive.

THE COURT: Okay. It's Christopher Finan?

MS. STEWART: Finan.

THE COURT: And, what parts of his declaration do you object to?

MS. STEWART: Your Honor, it will be paragraphs 23, 24, 25, 29, 30 and --

MS. BEESON: I'm sorry, I --

MS. STEWART: You're going too quickly.

MS. BEESON: Yeah.

THE COURT: 23, 24, 25, 29.

MS. STEWART: 30 and 33, the basis for the objection would be --

THE COURT: I can't hear you when you speak.

MS. STEWART: I'm sorry. The basis for the objection would be foundation and/or hearsay, Your Honor. And, let me say, Your Honor, that that's the basis for the objections throughout and as to all declarations.

THE COURT: All right. Lack of foundation and hearsay. Let me just get a sense of what this looks like. I think -- I'm just looking at 24 as an example. With respect to that paragraph, I would rule that the Court would receive the information for the purpose of the plaintiffs' proving that this witness and his principal organization had these feelings. Whether they're justified in science or otherwise is objected to and so they're not proved. The other purpose for receiving it would be that the Glad Day Web site folks had a concern and this is the concern they expressed and these are their views. I agree with the unstated argument of the defense that it's kind of hard to prove whether those views are based in science or some technically supportable position and so I really can't do that. That's exactly what we're saying.

But I think the -- under the First Amendment challenge that we have before the Court, how people view the statute and what they do to concern themselves with it is relevant information to the proceeding, so I'll consider it and also it gives weight to your objections. This is, as you stated, sort of an overview of how I would treat these objections. And, I don't know that the plaintiffs would really try to correct anything -- they couldn't today anyway without the declarant being here. Ms. Beeson.

MS. BEESON: Yes, that's correct, Your Honor. It is offered for the purpose of explaining their current understanding and fear under the law and what they believe they would be able to do to comply.

THE COURT: But I think we should articulate the objection so you protect the record. We have 22 through 33, so to speak, with intervening numbers. Is that all for that declarant or are there other paragraphs?

MS. STEWART: Not for Finan, Your Honor.

THE COURT: Okay.

MS. STEWART: On Mr. Glickman, who's at --

THE COURT: Which number is he, B?

MS. STEWART: -- Tab B, Your Honor, paragraphs 43 through 48 and 51 through 53.

THE COURT: Let's move to the next one, please.

MS. STEWART: Nothing at Tab C, Your Honor. The next is at Tab D, Johnson.

THE COURT: Ernest Johnson, okay.

MS. STEWART: Paragraph numbers 56 --

THE COURT: 5-6.

MS. STEWART: 5-6.

THE COURT: Thank you.

MS. STEWART: 60, 61, 62, 64 and 65.

THE COURT: Okay.

MS. STEWART: Next Tab is at E.

THE COURT: Who is the declarant there?

MS. STEWART: Speyer. Paragraph 38, 39, 42 and 43. At Tab F, Your Honor, the Steinhardt declaration, paragraph number 16 through 23. And, at Tab G, Your Honor, the Warren declaration, paragraphs 21, 25, 26, 27 and 29.

THE COURT: All right. The end of the list. Okay.

MS. STEWART: That concludes the three questions, Your Honor.

THE COURT: Thank you. The objections are noted. I'm not going to go through all of them on the bench here and rule on them, but when I get to finishing my review of those, that's the approach I'm going to take. I don't know if there are any paragraphs that are technically different than what we've been talking about here, if there are, I'll make an appropriate ruling. For purposes of these proceedings you may not know what that ruling is, but I'll make it.

Okay. Does the Government have any other evidence to offer today?

MS. STEWART: No, Your Honor. And, it is clear that we are talking about these objections and the receipt of this evidence just for purposes of today's proceeding.

THE COURT: Sure.

MS. STEWART: I wanted to be clear on that.

THE COURT: You've -- the live witnesses, I believe the law provides that having been here and subject to cross-examination their evidence is going to go in at the preliminary injunction hearing in toto. The declarants here, you have on behalf of the Government preserved your right to insist that they be called live or that you depose them or some other method of managing the Government's dealing with those witnesses. And, you have to do it in a timely fashion. If it's been covered by our pretrial management orders, then you'll follow those and if it isn't, you follow common sense and courtesy and make sure that -- and I'm sure Ms. Beeson will release her client's interest and make sure that you state your intentions with respect to each of these declarants at the earliest day she can get you to do it.

And, I would encourage the parties or the Government to the extent that the declarations are reasonable for the Court to rely upon, that the Government allow the Court to rely on them at the preliminary injunction hearing if that's a proper representation of your client.

So the next step, does the Government -- I gather, there being no formal offers of evidence by the Government that the plaintiffs' not entitled to and will not present any rebuttal.

MS. BEESON: No, Your Honor.

THE COURT: So I would like to have summary arguments. Let me suggest to you that in a few moments I'm going to tell you how long that I think the arguments ought to be. And, I regret I didn't say this at the end of the morning session, but the three hour argument you planned probably won't fly. But I want to have counsel focus on the purpose of the proceeding today and the standards of proof that are demanded by the law for today's proceedings. They have subtle differences between steps in the proceeding and in the case as it goes along. So we're not going to be here in essence arguing all of the nuances and evidentiary matters and issues that are going to come up at later stages of the litigation. And, with that, I think that the -- Ms. Beeson, how long do you think your closing will be today?

MS. BEESON: Well, Your Honor, I haven't rehearsed it but if I had to take a wild guess, I don't think that I have more than about 20, 25 minutes.

THE COURT: I'd like 30 minutes max for both sides. I decided that before I heard what you had to say. And, my law clerks will swear to it. They work for me, after all. It happens to be true. What they remind me daily are the scarce judicial resources of the Court.

Well, Ms. Beeson, we'll have you sum up for the plaintiffs for today and I may ask you some questions, and I don't know whether they're going to be as we go, it depends on what happens. You can proceed, please.

MS. BEESON: Your Honor, today plaintiffs are asking the Court to issue a temporary restraining order against enforcement of a Child Online Protection Act, which would otherwise go into effect tomorrow, November 20th. We ask the Court to do so because we believe that we have, in these proceedings today, shown that we have a likelihood of success on the merits of our claim that COPA, as I'll call it, violates the First Amendment rights of plaintiffs and many other Internet speakers because it effectively suppresses a large amount of speech that adults have a constitutional right to receive and to address to one and other.

For purposes of today and focusing on that, I don't think that there are many issues in dispute between the parties. Defendants have essentially conceded, again, just for purposes of today, that at least some of the plaintiffs have standing in this case. They do so in their proposed findings and conclusions at the second conclusion of law. And, they have also conceded that at least with respect to this proceeding, that strict scrutiny is the appropriate standard to apply, and they do that at page 10 of their brief.

Therefore, we believe that the only issue for the Court to decide today is whether or not plaintiffs have succeeded in showing a likelihood of success on their claim that there is no way that they can avail themselves of the defenses. And, with respect to that issue, plaintiffs have put on the only evidence and their evidence has shown that the plaintiffs all are unable to comply with the defenses.

The defendant ultimately has the burden of proof on this issue, even in a proceeding for an injunction and that is because of the strict scrutiny standard. There is a long body of law that says that it is the Government's burden to show that any content based regulation of speech is -- serves a compelling interest and does so in a narrowly tailored way and that there are not less restrictive alternatives available to them.

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Before I go into just a brief summary of the evidence we presented today, I'd like to focus the Court's attention again on the actual language of the law and -- and highlight again that the law applies to all speakers on the web who communicate for commercial purposes.

By it's own language the law does not require that a sale take place. And it very explicitly, by its very own -- by its own language, does not require that the -- the covered speakers make a profit through their communications, or that they be engaged in such communications as their principal business.

The harmful to minors standard used in the law very explicitly covers written material and sound recordings, in addition to images. It covers any communications that meet the three-prong test, which I'll discuss in a minute, that involve sexual conduct or sexual acts, and any display -- lewd display of the genitals or the post-pubescent female breast.

It makes it a crime, subject to very severe penalties of up to a hundred thousand dollars a day in civil penalties, and another $50,000 a day in criminal fines, to communicate such material if it is found by any community to appeal to the prurient interest of minors, to be patently offensive for minors, and to lack value for minors. And I will emphasize again that it does not exclude material that lacks value adults -- for adults. It explicitly -- what it is targeting in fact is a category of material that by definition has value for adults, but lacks value for minors. And that is precisely the type of communications that our plaintiffs and many other speakers communicate on the web for free. Sexually oriented content that they believe has value for adults and for older minors, but that they believe many communities might believe lacks value for minors.

Specific examples of such speech which we have heard about today, and which have been submitted through the -- the written declarations include Mr. Laurila's testimony and exhibits with respect to A Different Light, which just to highlight two of them include the sale and information about a number of books regarding sadomasochism and fetishism, including the book -- a book entitled The Topping book, or Getting Good at Being Bad.

An excerpt from a book called Shame on Me, which is an explicit discussion of shame on the part of an individual from having erections or masturbate -- masturbating as a teenager. Salon Magazine, Mr. Talbot testified that there are more than 700,000 visitors to his site per month, and that his speech includes very sexually explicit discussions from the columnist Susie Bright and by Courtney Weaver. And that those columns alone have generated more than 20,000 visitors to the site.

Plaintiff, Condomania, has submitted a declaration and exhibits which shows that they receive more than three -- 3,000 visitors per day or 90,000 visitors per month to their site. They have very sexually oriented material to encourage individuals to practice safer sex, and to use and purchase their -- the condoms that they offer for sale on the site. It includes a feature called the Condom Wizard, which through very prurient language, I might say, helps an individual choose what type of condom they want to purchase.

And also explicit safer sex materials that include a section in Exhibit B-4 that begins by telling someone -- telling individuals to try practicing putting on a condom with your mouth, and it uses very explicit discussions to encourage people to do that. And a section that -- in which they publish real stories by real people that use condoms, including one that's shown at Exhibit B-5, that discusses how condoms can even enhance masturbation.

Plaintiff, Artnet, in declaration D testifies that they have 50,000 visitors per week to their site. This is one of the -- the leading online vendor of fine art on the web, or 200,000 visitors per month to their site. Exhibit D-11 is an example of one of the many images they have on their site. Exhibit D-11 and Exhibit D-12 are both photographs by Andres Serrano, who is a very controversial photographer.

They include a photograph entitled A History of Sex, the Kiss, which is a photo of an elderly woman sitting at waist level in front of a completely nude male, and another one that is an image of a man who is actually -- who is nude and who is touching his tongue to his penis in the photograph. These photographs have been very controversial, as Artnet discusses in their declaration in the past, and there are many other sexually oriented photos and other fine art that are available on their Web site for free to users.

Plaintiff, OBGYN Net, submitted a declaration at E that shows that 100,000 visitors per month visit the OBGYN site. And they have a very strong interactive forum which allows doctors and women to discuss very personal and sometimes very sexually explicit issues involving women's health and gynecological health.

And finally, just to highlight, Patricia Nell Warren, who is one of the members of the ACLU, who has submitted a declaration at G. She is a gay and lesbian author who has written books for years, and which she now makes excerpts available over her Web site that very -- in very frank terms discuss homosexual relationships between younger men and older men.

Plaintiffs all believe that this content and other content like it, and content of other -- many of the other speakers on the web could very well subject them to criminal and civil penalties under the Act.

Just to highlight very briefly some of the information in another declaration submitted by the plaintiff, that of Professor Donna Hoffman, about the web in general, and in particular the commercial development of the web. She testifies in her written declaration that since the time of the Supreme Court decision in ACLU versus Reno I, there has continued to be explosive growth world wide on the web. That there are currently estimated to be 70 million users of the Worldwide Web, and that there are estimated to be 320 million pages of content.

That it is very difficult to estimate the number of sites doing business on the web, but that she estimates that number to be somewhere between 450,000 and one million sites doing business. And she estimates that the for profit sector of the web is the fastest growing sector of the Internet. And that most for profit businesses on the web provide all of their content for free.

After reviewing the information in the declarations and in the complaint in this case, Dr. Hoffman was able to opine that if in fact the plaintiffs are at risk for the type of speech they describe, there's definitely a high number of other similar speakers who are also at risk.

She also confirmed the finding in ACLU versus Reno I that it is still true on the web today, because of the type of medium that it is, that the odds are slim that a user will encounter content which they are not looking for. And she also discusses the -- the use of the web now for discussions and simultaneous chats, and that there was testimony, of course, on that issue also by Mr. Talbot from Salon Magazine. In sum, there is nothing about the nature of the Internet or the content on it that would change the Supreme Court's ruling in ACLU versus Reno I that it is certainly subject to the highest level of First Amendment scrutiny for content based regulations on speech.

The problem with COPA, which was, of course, the fundamental problem with CDA -- the -- with the CDA is that in an effort to restrict the availability of materials to minors, this law makes it a crime for adults to communicate information that's constitutionally protected for them. For that reason we ask that the Court issue a TRO against this enforcement.

On its face the law again applies to adult speech because all material that is available to minors, which is the term used in the Act, is also available to adults. The only thing that could say the otherwise obvious facial unconstitutionality of the law is the availability of the affirmative defenses which was, of course, the crucial issue in -- in ACLU versus Reno I as well.

In testimony today, and through the declarations, plaintiffs have shown that these -- the credit card verification is still not available to people doing business over the web who offer their speech for free, because credit cards -- credit card companies and banks do not verify credit cards in the absence of a financial transaction. Mr. Talbot from Salon Magazine estimated that the initial startup costs of beginning to offer credit card verification over the web are 50 to $60,000.

Mr. Steinhardt in his declaration estimated a $200,000 main -- ongoing maintenance fee per month for a large site that attained approximately 100,000 hits per month. And also estimated that the per transaction fee for every time a person had to put in a credit card would be between 20 cents and $2.

Just in terms of reviewing the vast amount of content that some of the speakers have on their site, both Art Net and OBGYN testified that they could not continue to provide the services that they currently provide if they had to go through the process of looking through the literally more than a million files to determine whether or not they had some images that could subject them to prosecution under the Act.

In terms of age, other age verification systems, Mr. Talbot from Salon Magazine testified that even if such systems were available, they would basically drive him out of business because his business depends on being able to drive a certain level of traffic to the site. And he has evidenced from the way other magazines offer -- do business in the online world that his circulation numbers would vastly decrease if he required the user to register at all.

We do not have very much information about digital certificates so far, but Mr. Steinhardt did look into it briefly, and it appears that digital certificate technology is not at all widely available. There is one company that offers it, and there are substantial maintenance costs involved.

In addition to these very serious economic burdens and First Amendment burden -- speech burdens on the plaintiffs, this law would have a very severe impact on readers and users of the web. As Mr. Talbot and Mr. Laurila testified, it's very likely that the result of the Act would be that they would simply remove the content completely, rather than risk prosecution or incur the enormous benefit of -- I mean enormous burden of age verifying.

And if they did so, readers then obviously would not have access to the speech at all that they previously would have had access to. They -- the declarations have shown, and the ACLU versus Reno I Court found that any credit card requirement to enter sites would deprive many adults of access to sites because they don't -- they simply do not have a credit card. Therefore, depriving a large category of people who communicate -- who use the web from accessing content they're entitled to receive.

Both the ACLU Court and the Third Circuit in Fabulous Associates found that mandatory age verification deterred users from accessing protected speech to the point that it violated the First Amendment. In contrast to this great burden on speakers and readers, the Act would in fact have very little impact on the availability of images of sexually explicit content to minors over the web. Dr. Hoffman includes in her declaration a statement about the -- the decreasing number of such images on the web, and also says that most of them do already require payment before entry to the site. So this Act will not affect those speakers.

The ACLU versus Reno I Court also noticed that -- noted that CDA -- CDA would have a similar ironic impact. In other words, it would -- it would very seriously burden people who provide information for free, but not be much of a burden at all, if any, on those people who were selling commercial pornography on the web.

This law does not reach any of the pornography available to -- avail -- put up on the web by amateurs or non-profit organizations, and it -- it does not reach, or it would be very difficult for it to reach any of the content provided overseas. And Dr. Hoffman also testified that it is still true that approximately 40 percent of the content on the web is provided from overseas.

In sum, the Act clearly fails strict scrutiny. The Government has not shown any compelling interest. It has not shown that the Act will alleviate the harms that they postulate about in any direct and material way, and it clearly leaves appreciable damage to the supposedly vital interest the Government has identified unprohibited. And that's a quote from Florida Star, 491 U.S. at 541. The Justice Department itself, in a letter to Congressman Bliley before the law went into effect, identified this as one of the problems.

That it would be a -- it would damage the public interest in fact if critical resources were diverted from prosecuting hard core obscenity and child pornography in order to enforce this law which, in any event, would not have much of an impact on the availability of speech over the Internet -- of harmful speech over the Internet to minors.

Plaintiffs have also introduced evidence that they -- that the law is unconstitutionally vague. In looking at laws like COPA that are both content based and impose criminal sanctions, the Supreme Court again very recently in ACLU

versus I (sic) said that the vagueness issue is particularly important in those contexts. And we have heard from Mr. Talbot and Mr. Laurila that they simply don't understand how they can know what the community standards of everyone who can access their speech will be, and that therefore they are -- they don't know how to conform their behavior to the law.

THE COURT: Excuse me for interrupting, --

MS. BEESON: Uh-huh.

THE COURT: -- but there's some notion that there's a, if you will, national standard for the third affirmative defense of the work taken as a whole lacks serious literary, artistic, political or scientific value for minors.

MS. BEESON: Uh-huh. Uh-huh. Yes, Your Honor. The case that the Government cites in their brief, Pope versus Illinois, you know, is in fact I think correct on that point. It's an -- Congress did not discuss this explicitly, of course, in the legislative history, and it could be that that would be interpreted as a -- as a national standard.

It is very clear, however, that the other two prongs under established law, and under just -- by virtue of the fact that Congress used this three-prong terminology which they've used in the past, that those are local community standards that would decide whether in the first instance the speech was prurient, and also patently offensive.

THE COURT: It's intriguing to me, and today's probably not the day to do this, but I'll be eternally interested throughout this case and it's sequela, to consider the concept that the United States is a -- has now gone to a national community standard altogether. But not by a holding of any Court, but de facto with distribution of videos -- identical videos from one side of the country to the next, with distribution of identical R-plus plus rated movies or X-rated movies all across the country. And add to that the web itself, and somebody some day might reach that conclusion.

One has the feeling, when one travels across the country in related cultural areas, that there's a -- we have a model that's taking over the country from stores in malls that look the same, from San Francisco or Paducah, Kentucky to almost everything else we do. And so -- oh, and add to that television shows and so forth. You have a sort of a national culture that's over -- they have already overtaken us. And it may be interesting to see how it affects things.

Anyway, the -- I don't think it's going to solve much for today, but --

MS. BEESON: Uh-huh.

THE COURT: -- some time it might.

MS. BEESON: Well just to pick up on that a bit, Your Honor, there is a real distinction in terms of distribution in the real world and in the online world that's important I think with respect to the use of this standard, which has in the past been used, you know, to apply to local entities. Businesses that, you know, did business in a particular state.

And that is even if you're a nationwide video distributor and you're sending out videos, you know, you know where you're sending them. You address the video package. And you could conceivably be charged with un -- trying to understand the standards of every place you send to. On the Internet, there is simply no way for a speaker to know where the person is logging on from.

In other words, there's just no way they could know whether there's somebody in Topeka, Kansas that's downloading their speech, by virtue of the very technology of the web.

THE COURT: Well that's why my point is that if the law shifted to that standard --

MS. BEESON: Uh-huh.

THE COURT: -- you would have -- we would be talking about something else.

MS. BEESON: Uh-huh. Yeah. Yes, Your Honor. Plaintiffs through all of this evidence that I've -- I've now summarized have, I believe, established a likelihood of success on the merits, and as well have shown that they will be irreparably harmed if the law is allowed to go into effect on November 20th.

It is Judge Sloviter in the Third Circuit said with respect to ACLU versus Reno I, subjecting speakers to criminal penalties for speech that is constitutionally protected in itself raises the specter of irreparable harm. The plaintiffs have testified as to their very real fear of prosecution under the Act, and the chilling effect that there will be both on their speech and the speech of people who post to their site if the law is not enjoined.

And finally, in terms of the balance of harms and the public interest, again I would just note that the Department of Justice itself noted serious concerns about the law and about the diversion of law enforcement resources. And again, quoting Judge Sloviter would conclude by saying that it is always in the public interest to have access to a free flow of constitutionally protected speech.

THE COURT: Don't go away. I may have a --

MS. BEESON: Okay.

THE COURT: -- some questions. Where's my list? Okay. I notice a -- a large void in your briefing so far on the subject of the breadth of injunctive relief.

MS. BEESON: Uh-huh.

THE COURT: And we've covered it only quickly the other day. But the language of your proposed order suggests a breadth of relief that the Court's concerned about. And what is your position on the relief from prosecutions that occur during the pendency of the injunctive relief? And for the injunctive restraining of prosecutions for acts or omissions that occur during the pendency of the litigation?

MS. BEESON: Uh-huh. Yes, Your Honor. And I apologize for not including that in our initial brief, but I -- we have done some research on that and we believe that it is very clear, especially in the Third Circuit, that the Government could not prosecute for acts performed while a preliminary injunction was in effect against enforcement of a statute -- for acts again performed during that time.

There is a case directly on point. It's not a recent case, but it's a -- it's very on point. It's United States versus Mancuso, M-A-N-C-U-S-O. It's 139 F.2d 90, 3rd Cir. 1943. In that case an individual had in a prior action sued to obtain an injunction against a draft board's induction order. The District Judge issued the injunction, and thereafter the draft board sent the induction order. The Judge later rescinded the order and dismissed the complaint, and the Government then indicted the individual for failing to appear previously.

In addressing just this very question as to whether or not the -- the individual could be prosecuted for that behavior, an omission, the Third Circuit held -- let me just make sure I've got the right thing here -- stated, "We do not think the layman participating in a lawsuit is required to know more law than a Judge. If the litigant does something or fails to do something while under the protection of a Court Order, he should not therefore be subject to criminal penalties for that act or omission."

And then later, "The litigant can hardly be asked to determine at his peril the correctness of the Court's decision." Fundamentally, the reason for this, especially in the First Amendment context is -- is that one of the reasons that we have shown that there will be irreparable harm is because of the chilling effect of the fear of prosecution later.

Certainly there will be no impact at all on that chilling effect if they -- the plaintiffs and other speakers have to worry about being prosecuted later for the -- all of the speech they post to their Web site while the order is in effect. And again, relying on Mancuso I believe it's -- it's clear that the Court has the power to issue an injunction that covers those acts.

THE COURT: Well the -- that decision tells me what the result would be in a prosecution, but it doesn't talk about the power of the Court to enjoin. But how do you -- what's the nexus between that case and the -- the power that you're asking the Court to exercise today?

MS. BEESON: Well, Judge, the power to issue the injunction in the first place -- I guess I'm a little bit confused. It seems to me that this case is -- is directly on point. In other words, --

THE COURT: Well it just --

MS. BEESON: -- if -- if --

THE COURT: -- it tells you what the result would be of --

MS. BEESON: Sure.

THE COURT: -- prosecution, but we're not prosecuting anybody today.

MS. BEESON: Right. But it has to do with the power of a Court to issue an injunction that then prevents later prosecution for the -- for acts occurred during that period.

THE COURT: But I -- I assume the Judge that issued that order, which he later rescinded, did not include in the first order that no one could be prosecuted for acts or omissions taking place during the pendency of the order. He didn't say anything about -- or she didn't say anything about it at all.

MS. BEESON: Uh-huh. Uh-huh. Uh-huh. Well in --

THE COURT: And you're asking me to put something in the order that gives immunity to a group of people not before the Court.

MS. BEESON: Well, Your Honor, what we're really saying is that regardless of whether there's explicit language in the injunction, that just an injunction against enforcement of the Act, you know, must be interpreted later to -- to mean that it would protect for acts during this time. Because otherwise, as they suggest in Mancuso, there would be a serious due process concern.

THE COURT: So you -- you're aware of the dispute among the -- the Justices in the case before the Supreme Court that were not -- did not have a holding in it, but --

MS. BEESON: Yes, Edger versus Mite.

THE COURT: Edger.

MS. BEESON: Yes. In that case, what --

THE COURT: Something for everybody in there.

MS. BEESON: Yes. In that case, the real concern of the Justices was a federalism concern. That case had to do with whether or not a --

THE COURT: State law.

MS. BEESON: Yeah, it had to do with a --

THE COURT: Which we don't have here.

MS. BEESON: -- state law, exactly. Which we don't have here. There are some other circuits that have reached the same conclusion, some of which have cited Mancuso. And the other one that I'll direct your attention to is Clarke versus U.S., which is at 915 F.2d 699. That's a D.C. Circuit case from 1990.

And that Court says, the few circuits faced with the question have held that a federal judgment later reversed or found erroneous is a defense to a federal prosecution for acts committed while the judgment was in effect. So I -- in terms of our position, you know, the injunction would have this effect regardless of whether we explicitly discussed it now or not. That is the plaintiffs' position.

THE COURT: I guess the plaintiffs' best argument is that in considering the public interest, it is the other citizens similarly situated to these plaintiffs that would have the detriment of an empty injunction if it didn't include the

-- enjoining the -- extending the injunction to those acts or omissions that take place during the pendency of the litigation.

MS. BEESON: Yes.

THE COURT: Not to be prosecuted at a later time.

MS. BEESON: Yes, that's absolutely true, Your Honor. And in fact in --

THE COURT: Some of your colleagues like the way I put it, I'd say.

MS. BEESON: In fact, in the Virginia versus American Booksellers Association case, where the Court discusses the relaxed -- they're discussing it in the context of a irreparable harm and the relaxed rules of standing in the First Amendment context, they say the very purpose of a facial challenge to a law is to -- one of the very purposes is to protect parties not before the Court. And again, therefore, that would support the idea of an injunction in a facial challenge extending to non-parties.

THE COURT: As opposed to a simple as applied challenge?

MS. BEESON: That's right.

THE COURT: Okay. Let me see if I have anything else I can bother you with. I perceive, and maybe we can wait till after we hear from Ms. Stewart, but I perceive from the -- her papers that there's a notion on the part of the Government that if there's an injunction it should apply as to only enforcement as to the plaintiffs only. And I think you've just answered that.

MS. BEESON: Yes, I have.

THE COURT: I think that's what the Government is going to argue. I think you've just answered it by saying that it's a facial challenge and it -- it doesn't -- the injunction is going out to the Government being enjoined, and on its face applies to the Government seeking prosecution of anybody.

MS. BEESON: That's correct, Your Honor.

THE COURT: It goes beyond the plaintiffs -- whether anybody asked for it or not, so to speak.

MS. BEESON: Right. I think that's correct, Your Honor. There certainly isn't any jurisdictional question that has to do with not having the proper parties before the Court. It is the Government that has the power to enjoin -- to enforce the law, and we're asking the Court to enjoin them from --

THE COURT: And -- and it's here, right.

MS. BEESON: Yes, that's right.

THE COURT: Do you think that the issue of vagueness is of primary importance in the proceeding today, or can the plaintiff sustain -- plaintiffs sustain their position without a -- I would say a definitive resolution of that issue?

MS. BEESON: Uh-huh. Yes, Your Honor. We do not believe that the Court needs to resolve the vagueness question, and we believe that the primary argument which was again also the holding in ACLU versus Reno I, in which the Supreme Court discussed the vagueness concerns as relating to the problem of overbreadth, that is true here as well. That, you know, they are worried -- the impact of the law may be broader because of these concerns about what it means. But ultimately, what the Court needs to decide, and what we believe we have shown is that a large amount of speech has been suppressed because of the act.

THE COURT: What about lesser restrictive means -- it's sort of a curious argument that non-regulatory -- I don't know how you -- I don't want to depreciate it, just try to describe it, the ad hoc, thumb-in-the-dike things like software packages, Net Nanny -- and meaning no disrespect to the owner of that patent or licensee or anybody else. What are the -- could a non-statutory alternative be a viable argument for the plaintiffs?

MS. BEESON: Yes, I believe so, Your Honor. Again --

THE COURT: Why so?

MS. BEESON: -- again, relying on ACLU versus Reno I, the Court did explicitly discuss the availability of user based blocking software and other options with a less restrictive alternative to the criminal prohibition by the Act. In --

THE COURT: But you can't -- the -- Congress probably wouldn't pass a statute requiring all concerned parents to buy

one of 16 --

MS. BEESON: Uh-huh.

THE COURT: -- pieces of software.

MS. BEESON: Yes, but, Your Honor, in fact, in -- elsewhere in this law Congress did pass a law -- another law which is one of -- is one of the less restrictive alternatives, I believe, which is to require Internet service providers to notify all of their customers of the availability of such software.

And again, this being a way that the Government can encourage and educate parents and other people concerned about how they might prevent minors from obtaining material that they believe is inappropriate.

THE COURT: That -- that's clearly a -- not a very restrictive --

MS. BEESON: It is certainly less restrictive than the criminal penalties.

THE COURT: I'll allow you to make any underlying necessary responses to the defense position after they finish.

MS. BEESON: Okay.

THE COURT: Ms. Stewart?

MS. STEWART: Thank you.

THE COURT: Since you didn't get tagged with my questions, you're -- you stopped within the 30 minutes. Ms. Stewart, good afternoon again.

MS. STEWART: Good afternoon, Your Honor. Your Honor, plaintiffs' entire case is built on the erroneous premise that COPA is no different from the CDA legislation that was invalidated in the Reno versus ACLU decision. Reno holds that the Internet can be regulated in a constitutional manner, however, as long as Congress does so with a carefully crafted law. Admittedly, Reno found that the CDA was not such a carefully crafted law and then struck it down. But in identifying the constitutional flaws of the CDA, the Reno case essentially establishes a constitutional blueprint.

It indicates how Congress can go about passing a narrowly tailored and carefully crafted law that would pass constitutional muster. Now plaintiffs' contention that the CDA and -- is -- or that COPA is nothing but the CDA reincarnated simply is designed to lower their burden of proving that COPA is constitutionally flawed.

Since Congress addressed, and the legislative history is replete with references, Your Honor, to the Reno decision, and Congress is identifying the concerns cited there, explaining in the legislative history how the COPA addresses those concerns, and so the law is very different from CDA and it's presumptively valid.

And plaintiffs cannot lessen that burden, if you will, of proving that the -- that the law is unconstitutional by simply contending that the two are the same. Because even a cursory examination of the COPA will reveal the fallacy of that claim. Now to begin with, COPA is much narrower than the CDA. The CDA applied to the entire Internet, which is vast. The COPA applies only to the Worldwide Web portion of the Internet.

THE COURT: What's the significance of that difference?

MS. STEWART: Well to the extent we're talking about things like E-mail and chat and bulletin boards, that isn't within -- encompassed in the reach or scope of CDA. So whatever would be posted on those other elements or portions of the Internet would not be impacted.

THE COURT: What about Salon Magazine's chat board that they have? Isn't that on the Worldwide Web? I don't -- I don't know. I'm asking.

MS. STEWART: That seems to be a different kind of chat, and it wasn't really clear from his testimony, you know, exactly -- and there's some technical issues involved, Your Honor, as I understand it with how -- what kind of server is involved. The COPA indicates that -- or limits in its --

THE COURT: The definition of the web to H -- HTTP.

MS. STEWART: Right. Right. And --

THE COURT: The only limit I know of.

MS. STEWART: I'm sorry?

THE COURT: I said that's the only limit I know of that's mentioned in there. A very short definition. The term means placement of materials in a computer server based file archive so that it is publicly assessable over the Internet using hypertext transfer protocol and any successor protocol. And I guess that's what Mr. Talbot was describing or -- technically. I don't know.

MS. STEWART: It may not necessarily be so, as I understand it. Although it is a very technical issue with respect to what kind of server is being used, whether it's a server that's associated with the web or not. And there may be some differences with respect to the server issue that might bring something outside of --

THE COURT: Back to my original --

MS. STEWART: -- the scope of COPA.

THE COURT: -- question though in -- in gross terms, what is the significance of the difference between Internet on the CDA and Worldwide Web on the COPA? What's the -- you say it's an important difference. What's -- what is the importance of it?

MS. STEWART: Because the focus is going to -- just because the Internet is -- is just so huge, it's an important difference because Congress is beginning to narrow by focusing only on what happens on the Worldwide Web, as opposed to at this point attempting to regulate -- I mean apart from E-mail there are news groups and bulletin boards and other -- again portions of the Internet that wouldn't be affected.

There -- the E-mail chat may be one thing that depending on how the server situation is revolved -- involved could be something that comes in. But then there are other chat groups that would be apart from the Worldwide Web, and that's how it was when the CDA was actually litigated.

THE COURT: Is there something in Dr. Hoffman's declaration or somewhere that shows in this record the difference in size, to use an imprecise term, between the Internet and the Worldwide Web? I don't have the knowledge to guess what the difference is.

MS. BEESON: Are you asking me, Your Honor?

THE COURT: I don't know. I'm asking anybody, I guess. I was just trying to find out if -- if -- I have a list of the differences in the two statutes, and this is one of them. What does it mean? I don't know what it means. And I just -- I was wondering if Ms. Stewart knew --

MS. STEWART: In the -- in the -- in the -- it is one of the differences, but there are more important differences.

THE COURT: Okay. We'll move along to those then. I don't want to confound you or me.

MS. STEWART: The CDA applied to commercial and non-profit entities, whereas the COPA is limited to commercial entities and commercial transactions. And that difference, Your Honor, is huge be -- with respect to the affirmative defenses.

And indeed the Supreme Court recognized in the Reno decision and even suggested that a limitation to commercial entities might be a logical way that Congress could narrow the law because of the availability to that group of the affirmative defenses. COPA used an indecency standard and -- I'm sorry, the CDA used an indecency standard, but COPA uses the harmful to minors standard, which is a variable obscenities standard. And it prescribes things that are -- proscribes things that are obscene as to minors.

Thus, when CDA was argued the Government said -- or argued to the Supreme Court that CDA was constitutional because it was essentially like or similar to the variable obscenities standard like in Ginsberg, and that's something that is discussed specifically in the Reno case. And when the Supreme Court went and analyzed that, the Court found that there were some differences in the CDA that -- or in Ginsberg that the CDA had not picked up on.

And there were four important elements that the Court zeroed in on as to why that argument did not work. First, the Court recognized that in Ginsberg the law did not preempt parental consent. So parents didn't have the ability -- parents had the ability in -- in that case to permit their children or minor children access to what was being prohibited under the Act if they so chose.

But in CDA the Court was concerned that the law was

-- did not appear to give parents that consent. The second important factor identified by Reno was the fact that Ginsberg applied only to commercial transactions, whereas the CDA was much broader, applying to also non-profits. The Ginsberg case involved a statute that excluded material from its reach that had value, socially redeeming value, social importance. And the CDA did not include that prong in the indecency standard. The fourth thing was identified was that Ginsberg defined minors as someone under 17, whereas the CDA added an additional year to the definition and so it encompassed those 18 and below. Now if we were to apply that analysis to the COPA, we have a much different result because all four of those important factors would be met.

COPA doesn't prevent the parents from allowing minors access to the material if they so choose. COPA also applies only to commercial transactions. COPA includes as a third prong of the harmful to minors test a requirement that the material have social -- have not social, but political, scientific, artistic and literary value, which the Court found was a very important element of the test. And, of course, minors are defined as under 17.

So when we have what seems to be or have become somewhat of a mantra that the COPA is CDA II, I'm reminded --

THE COURT: It's only -- it's only a plaintiffs' mantra, so --

MS. STEWART: Yes, it's plaintiffs' mantra, but it makes me think, Your Honor, --

THE COURT: It's not my -- not mine.

MS. STEWART: -- of the -- of the adage that one -- that we should be careful what we wish for because when you apply the Reno's teaching to the COPA, it is obvious that -- that they must lose.

THE COURT: So no likelihood of standard -- of success says the Government?

MS. STEWART: There's no likelihood of success. And plaintiffs indicated that the only issue had to do with -- with credit cards, but that isn't accurate because there is a huge issue with respect to whether or not they would undergo irreparable harm. And in the context of that issue, the question would be whether or not there is a real and credible threat that they would be prosecuted under the Act.

Now this isn't -- this is beyond what their subjective fears may be. There must be some objective reason to -- to believe that there -- they're subject to the Act, and that their fears of prosecution are credible. Plaintiffs fail in that regard because it is not -- they haven't shown, and it's very questionable that based on their allegations and their evidence, that they are entities engaged in the business of communicating -- providing or making harmful to minors communications.

Now I noticed it in their brief, and in plaintiffs' presentation. They refuse to really zero in on the meat of what engaged in the business means because that's defined in the statute, and it's defined as a -- an entity that makes harmful to minors communications in the regular course of their business. It isn't just someone who has a business and may have some sexually explicit material that may be a part of it. Plaintiffs prefer to zero in on a parenthetical that's in the definition which says it doesn't have to be your sole business or your principal business, which is true. But that does not eliminate the requirement that the person be engaged in the business of the harmful to minor communication. And if they are indeed engaged in the business within the meaning of that statute, then -- then it does not matter if it's their principal business or their sole business, but they still must be engaged in the business.

And we cannot read that out, and that seems to be what plaintiffs' entire theory is. They haven't addressed it at all, Your Honor. And based on the allegations in their complaint and their evidence, it doesn't appear that that's the case.

THE COURT: Well, excuse me. The statute says the term engaged in the business means a person who makes a communication or offers to make a communication by means of the Worldwide Web that includes any material that is harmful to minors, devotes time, attention or labor to such activities as a regular course of such person's trade or business, with an objective earning or profit as a result of such activities. Do you think that Salon Magazine solely restricted to the web is engaged in that commercial -- under the definition of commercial purposes in the statute? We heard his -- what Mr. Talbot said. And my question is simply do you think that Salon Magazine meets that definition?

MS. STEWART: No, Your Honor. It doesn't appear that -- and he indicated what -- what the operations of Salon are, but he specifically indicated that the harmful to minors -- what he was afraid might be harmful to minors communications was a very small part of what Salon is generally about, which is a general interest magazine that makes all kinds of communications of general interest.

And there was nothing in his testimony that went to or suggested that the -- that he focus his time and attention and energy within the meaning of -- as the statute specifically states --

THE COURT: But the statute says any person who includes any material that is harmful to minors. The word includes seems to be pretty broad. I'm just wondering whether you think his testimony fits there in that language?

MS. STEWART: Your Honor, I would submit that notwithstanding the term includes that is harmful to minors, the requirement is specifically that the person devote time, attention and labor to such activities as a regular course of the person's trade or business. And it does not suggest that simply -- simply having a legitimate business where that is a small portion of what you do satisfies that standard.

THE COURT: I understand what you're saying, sure.

MS. STEWART: The -- the other aspect of it is the third prong of the harmful to minors test. Now plaintiffs essentially are saying well, they're afraid that their speech might be prohibited by the COPA. But by the same token they're contending that the speech has value. The speech has value for minors because it is of educational value or political value or what have you.

Now it's important to note that -- where that test actually comes from, and it -- it's patterned after the variable obscenities statute that virtually every state has a form of, and they've been adjudicated constitutional. Ginsberg is but one example, and we cited others in our case. So Courts have looked at this standard and suggested that and found that it passes constitutional muster, that it's not vague.

And because of -- because of that fact, plaintiffs vagueness challenge must evaporate. What they're essentially suggesting that the Court do is -- is overrule that precedent which, when looking at the virtual variable obscenity standard, found that it was constitutionally sufficient. And that is one of the things -- the ways that Congress was attempting to respond to the concerns of vagueness that the Supreme Court articulated in Reno. As I indicated earlier, when you go through the Ginsberg analysis, all of those important factors would apply as far as COPA is concerned. And accordingly, if that were to -- applying that standard and -- one would conclude that COPA is constitutional and not vague.

The least restrictive means -- I would say that first of all, there appears to be no dispute that the Government has a compelling interest in protecting children from unrestricted access to sexually explicit materials.

THE COURT: That's what I think Ginsberg and Miller said, and Ms. Beeson said something to the contrary. But I don't know if it was in this context. Go ahead.

MS. STEWART: Well I think the Court just resolved that dispute though in -- in his own comments when he alluded to the fact that the Supreme Court has identified the fact that the Government has such a compelling interest.

THE COURT: I don't think the plaintiffs contest that.

MS. STEWART: Correct.

THE COURT: In that context.

MS. STEWART: Correct.

THE COURT: Is that correct, Ms. Beeson?

MS. BEESON: That's correct.

MS. STEWART: And so the question becomes whether or not COPA is the least restrictive means of satisfying that interest. COPA, contrary to plaintiffs' claims, is -- doesn't -- is not a ban on adult speech. It does not require that the speech not be placed on the Worldwide Web. The reason -- it only requires that if you're going to be a business engaged, and putting your time and effort in harmful to minors materials, then you -- you simply must put that sexually explicit harmful to minors material behind some kind of filtering device. A credit card screen, an adult PIN, adult -- some kind of adult verification device.

It is in effect requiring on the web the same kind of brown bag, shrink wrap, blinder wrap requirement that exist -- that already exists in bookstores in the print media. And I think that the testimony of A Different Light bookstore confirmed that that's the case.

He indicated that he does have a section where you would keep sexually explicit materials, and that there are things that could not be sold to -- to minors. And that stuff has to be segregated or -- that's how I should say it. That it has -- that he does segregate that information.

The allegation that the credit card defense or the adult verification is something that the plaintiffs cannot engage in is really based on speculation. They have -- A Different Light bookstore admitted that this was really based on his opinion, and that he really hasn't done the research and investigation with respect to credit cards. Or to the extent that he has, he's only talked to one company. And that's certainly -- there's certainly more than that. More importantly though the bookstore admitted that he could do -- it could do adult verification. The problem was not that that wasn't available. It was again based on his subjective -- and speculation that others would be chilled, however, again there's no evidentiary support for that.

Salon did talk to again one company about the costs, but that again was -- is simply not a sufficient investigation, Your Honor. Plus there was nothing testified to about digital signatures. I mean there's just really no basis to conclude on -- based on what they said and the other evidence, that it can't be done. And quite frankly they agree that they're already -- that they can and do segregate for purposes of obscenity. I mean they have to do that.

So when they did their investigation, even the modicum of which they did, it was an inflated view, if you will, to even address whether or not -- or what the costs would be associated with putting up a screen on the entire Web site because the -- COPA doesn't require that. COPA requires that the harmful to minors information be screened.

And that's what the law was directed to, as the legislative history shows, when it talks about the teaser images that are on the web for porn sites, and that the idea is that you get those teaser images and you put them back behind the credit card screen. So we're -- their notions of the costs are highly inflated, and that's one point. But in any event, the law being if they are within the scope of the statute, and being businesses that are engaged in the business of harmful to minors material, they simply must accept the burdens associated with that decision.

And we have cited Save Well (phonetic) which is in our brief and -- looking for the exact page because my notes have cited me to the wrong page number -- but there's a very nice quote from that case, Your Honor, that makes it very plain that the costs associated and the burdens associated with that are simply what one has to bare in the ordinary cost -- course of engaging in business. And frankly it costs money to protect children from this kind of material.

The -- it costs money to do so. And Congress, in its evaluation of the problem, believed that it was most appropriate to place that burden or to place the costs on those who were the source of the problem. Now in page -- on page 16, Your Honor, of the House report, we begin a discussion and it goes several pages where it shows that Congress is considering other alternatives.

It had hearings and it's looking at the blocking of devices which plaintiffs -- excuse me -- plaintiffs themselves concede are not foolproof, not completely capable, and that there are some problems with perhaps over or under-inclusiveness with that particular approach. But Congress looked at these alternatives and concluded that -- make -- putting the burden on the source of the information was the best alternative, and it was the -- when we're trying to restrict -- we're talking about restricting access, and the least restrictive alternative.

The fact that there may be other alternatives available is irrelevant because they are not less restrictive. Moreover, the law includes a safe harbor which is sort of a catchall and is designed to take advantage of the fact that there is set up in the law a commission that's going to also be looking at other ways and alternatives and technical -- technology -- technological means of restricting access.

And so to the extent that this commission which is to be in assistance for a year and to make a report to Congress on which legislative proposals would be based, through that commission perhaps congress is indicating that it's still looking at the issue, and that as technology evolves there may even be other reasonable means that could be added, in addition to the defenses actually listed.

And then, of course, it says by any other reasonable means that are feasible under available technology which would not preclude the plaintiffs from offering as well. I need to respond, Your Honor, to plaintiffs' contention that there just isn't a lot of free pornography, the porn sites, you know, don't offer much for free. Because that would be refuted by any quick surfing of the web. Moreover, Congress itself made a finding that this was a problem.

THE COURT: You're talking about -- you're talking about persuasive or teaser material or something like that?

MS. STEWART: Teaser material. Yes, Your Honor. That's what Congress was focusing on in passing this bill. And in the --

THE COURT: You say that because the -- Congress knew that the porn sites themselves did have adult access already built into them. Is that why you're saying they were focusing on the teaser material?

MS. STEWART: No. I'm -- I'm saying that the legislative history specifically recites that they're focusing on -- that the commercial pornographers are a primary target. And in their discussion of the need for the legislation and the availability of information that's available to minors, they specifically note that there are these teaser images out here, and that there are, you know, huge numbers of pornographic sites.

And this simply refutes plaintiffs' offer that, you know, this isn't much of a problem. You know, certainly at -- particularly at this juncture, Congress' finding in the course of its enactment of this legislation would be entitled to some deference. Plaintiffs also seem to be making an argument based on a distinction between older minors and younger minors, although that is not a distinction that is recognized in the law. The cases that we cited, and I believe it's on page 27 of our brief, Your Honor, indicate that if a work has value for a 17-year-old, then it has value for all minors. So there is no basis for the Court to conclude that there is some problem if something is put on that has value for a 17-year-old, but not an eight-year-old.

This -- it also should be clear that because the standard isn't -- is based on the -- is a variable obscenity standard -- in other words, describes or prohibits what's obscene as to minors, it can't unconstitutionally restrict a minor's right to speech because they have no right. This information is unprotected speech as to minors, although it may be protected as to adults.

To the extent that it is protected as to adults, they still have access to it because there are a myriad of defenses that can be utilized and readily utilized by those who are in this business.

THE COURT: Well do the -- do you agree that the -- the harmful to minors speech described in COPA is protected speech as to adults?

MS. STEWART: Harmful to minors, yes. Adults -- this is -- the whole goal of this is to protect minors and not to restrict adult speech. And it doesn't -- it doesn't ban speech. It places a small burden perhaps because they have to go through and segregate and place that information behind some sort of adult verification. But again, that is a permissible and small burden, and it's permissible for Congress to place it on these businesses in the course of its regulation. Just one additional point, Your Honor.

THE COURT: Your -- your time is --

MS. STEWART: Is coming to a --

THE COURT: -- came to an end.

MS. STEWART: -- oh, did it?

THE COURT: I don't have a yellow light.

MS. STEWART: Okay.

THE COURT: I think you just saw it or heard it.

MS. STEWART: We have addressed in our brief, Your Honor, the question about the scope of the injunction. Now a couple of things I'd just like to note, based on plaintiff's presentation.

The Mancuso decision, the Third Circuit case, I think His Honor was completely correct that that decision in that case really addresses what the Government is -- would be enjoined from doing, or what the Government could do while the injunction is in effect.

It doesn't address this question of, you know, what amounts to transactional immunity. It's distinguishable on those grounds, and you -- and on the facts of that case, the induction notice that was at issue there was issued in violation of the injunction. While the injunction prohibiting the Government from going forward and issuing these notices was in effect, a notice was issued. And the prosecution was for violation -- for the defendant's violation of not complying with that notice.

And the Court found that it was unnecessary and that it was improper to convict for that conviction because obviously the injunction was in effect at the time the notice was issued. That does not speak to a situation of what would occur, or ask that, or taken after the injunction has been overturned.

THE COURT: Unprosecuted act, in effect.

MS. STEWART: Yes. And, of course, the Edgar decision just really indicates that this is an unsettled question with respect to the immunity. You know, Judge Stephens (phonetic) had a view. There were some other views to the contrary. And it's -- it's -- you know, it's a tough question, as the Court noted, but it hasn't been resolved. And there --

THE COURT: Well what is -- what's -- what's the ill, if you will, or what's bad about protecting the public from having to self sensor or worry or quit business while they're waiting around, because they don't have to -- happen to be a plaintiff in this case, and they could be prosecuted if the act is found constitutional? It's a -- it -- the case law suggests that it's rather almost presumptive that people -- that there is a irreparable harm to whoever is covered by the statute. So why would it not be, if you will, reasonable and effective for a Court to put everybody in a hold -- a standstill position? Not only those ones that the Government didn't prosecute during the pendency of this injunction.

What's wrong with that kind of a breadth of the injunction that the Government asked for? Setting aside that there's no binding precedent, why District Judges can find what the law is. If there isn't any, they make it. What's wrong with that law if I decide to make it?

MS. STEWART: Even in the -- putting aside the -- the question of the Court's authority, plaintiffs are essentially attempting to have an injunction that applies to persons even unlike themselves, even though they have not shown that they face a credible threat of prosecution. Now --

THE COURT: Well we're talking about if the Court decides to grant a temporary restraining order, the breadth of the order and a facial attack on the statute, you're attacking the entire statute. So it would seem fair to protect everybody until the Appellate Courts decide the issue.

MS. STEWART: While the Court would have the authority to issue some -- such an injunction in this particular case, where there are serious questions with respect to the plaintiffs' standing, and there are serious questions as to whether or not they're within the scope, and these do go to the question of the Court's jurisdiction, the -- the Court can simply -- and plaintiffs would be fully protected if the Court simply limited its order to the plaintiffs or people like them, the plaintiffs don't purport to represent commercial pornographers, for example.

And they -- their theory of the case is essentially that they ought to be able to have this relief, you know, through the overbreadth doctrine. But they haven't themselves -- I mean that -- that's a doctrine that sort of is a variation or modifies slightly for the First Amendment context the standing doctrine, but it presumes that the person initially bringing the suit is within the scope of the statute, one.

And it also presumes that that person is legitimately covered by the Act, such that he or she could be enjoined. And then the person says well, even though my conduct can be enjoined, I'm representing others. That's not the situation that we have in this case where, because there's -- on both scores.

THE COURT: Well is the -- is the standing issue subsumed in the likelihood of success on the merits as I predicted when we first met? It still seems to be in that list of things that the Court has to decide in deciding whether there's likelihood of success on the merits. Is that correct?

MS. STEWART: Well, Your Honor, the analysis for whether or not they -- they are irreparably harmed and standing clearly are similar. And -- but standing is a sort of very specific kind of detailed analysis of plaintiff by plaintiff which we -- you know, which we haven't done, and which we intend to do with respect to our motion to dismiss.

THE COURT: Well it can't just float out there by itself. It has to be somewhere in the Rule 65 list. And there's --

MS. STEWART: It's --

THE COURT: -- nothing wrong with you preserving it as you have, provided the Court has to deal with it today somehow. I can't make it go away. Because it occurred to me that it would be in the -- in the rubric of likelihood of success on the merits.

MS. STEWART: Well jurisdiction is typically under the likelihood of success rubric, Your Honor, that's correct.

THE COURT: Other cases I've had, you know, subject matter jurisdiction have been in that -- in that part of the decision.

MS. STEWART: That's correct.

THE COURT: Do you -- do you, Ms. Stewart, believe that there's a serious dispute -- and I think I'm stating the obvious, but there's a serious dispute among the parties here, and questions have been raised going to the merits that are -- that it should reasonably be expected to be substantial to the Court, or difficult or doubtful to resolve, and that there's -- that a reasonable Judge acting reasonably could find one way or another in the long run. Is this the kind of issue that we're faced with at this stage of this case?

MS. STEWART: I'm sorry, Your Honor.

THE COURT: What I'm asking you to tell me is are there questions in this case that on the merits, including standing, --

MS. STEWART: Uh-huh.

THE COURT: -- that are so substantial, difficult and doubtful that requires the -- the Court to finish the litigation? In other words, move along to the -- from their injunction stage? Or is this so clear that the -- the Court has to rule in favor of the Government?

MS. STEWART: Your Honor, we believe that because unlike the CDA, we're not talking about a statute that like or similar to Ginsberg. We're essentially talking about one that is Ginsberg as modified by the other Supreme Court cases that impact on it. That we're -- that it's plain that this standard in the COPA is constitutional.

That it's -- that Congress we think based on the record has carefully considered all of the Supreme Court objections and concerns with respect to the constitutionality of the CDA, and it has dotted its I's and it's crossed its T's. And we believe that the Court can certainly find that the Government wins based on -- on the case -- all of the case law that has adjudicated cases with respect to those standards -- that variable obscenity standard.

THE COURT: And I can make that decision today. And that's what the Government wants me to do.

MS. STEWART: With respect to the TRO we believe that the Court certainly, based on the evidence, can -- can rule for the Government. To the extent that the Court disagrees with the Government's assessment, these issues are issues that obviously, you know, we would -- there are factual issues on the merits of the case that we have grave and substantial disagreements with.

You know, we don't feel like plaintiffs have put forth evidence on the relevant points, but obviously if a -- if the Court were to enter a TRO, and we would find ourselves in a different situation, these are questions that would certainly be weighty, such that they would require a lot of development.

THE COURT: Other than that -- other than the sapient motion to dismiss for lack of standing that you may want to file -- I just remember you saying that once -- I'm not trying to depreciate it. I'm just making sure that you preserve your point.

MS. STEWART: Yes, Your Honor. And perhaps I'm even thinking be -- I'm thinking just in terms of what the factual issues are, and not on the question of jurisdiction, you know, which obviously we believe that we will be able to -- to show is lacking in the court.

THE COURT: Okay. Can you -- the time that we've taken has been somewhat extended by me. And I think you pretty much made your closing statement a few moments ago when I asked you what the Government expected or believed the Court could do. So I don't want to rush you, but I think I would like you to conclude your argument if you could please.

MS. STEWART: Yes, Your Honor. And I have pretty much covered what I wanted to cover, and I just would sum up by saying that the COPA does represent Congress' earnest and careful attempt to respond to the Supreme Court's concerns. It's done that.

It's done that by adopting standards that have a history, that have been around for a long time, that have been upheld by the Supreme Court in terms of their constitutionality with respect to vagueness and the like. It's looked at the alternatives. It's made its findings with respect to the least restrictive.

There really isn't any evidence, other than speculation, and subjective evidence to the contrary. And accordingly, the TRO should be denied.

THE COURT: Okay. Thank you. Ms. Beeson, do you have any response?

MS. BEESON: Your Honor, --

THE COURT: And I use the word necessary. Any necessary response?

MS. BEESON: Your Honor, I don't have anything further unless you have questions.

THE COURT: I want to make sure if -- my law clerks and I sat down and devised all these perplexing questions, and I want to be sure we haven't overlooked something.

(Pause)

THE COURT: It appears to the Court that the plaintiffs take the position that the burden is on the Government to show the feasibility of the affirmative defenses, and the Government, I believe in its brief, says to the contrary. But I don't think the Government cited any cases. That's just my rough recollection.

Regardless of whether they did or not, Ms. Stewart, on what do you base the contention of the Government that it's the plaintiff's burden to show that the affirmative defenses are not feasible? It would seem that the law is the way the plaintiff said, but I -- I just want to be sure I haven't overlooked something that you think is important for me to look at in that area. Are you familiar with what your brief said in that respect?

MS. STEWART: Yes, Your Honor. The Congress has -- has shown that -- and that the -- that the defenses are reasonable in the course of its hearings, and in the course of what it has --

THE COURT: My question's very simple. Does the Government have the burden of showing that these are feasible? You're talking about how they met the burden, if they had one, without saying they had one. But I need to know if there's any law that -- that suggests that the burden is on the plaintiff to find that the defenses are not feasible.

MS. STEWART: To the extent that the -- it's the plaintiffs who are seeking to enjoin the Act, Your Honor, --

THE COURT: Do you know of any authority or law? That's all I want to know. I can make up the arguments for both sides.

MS. STEWART: I -- to the extent that beyond what is cited in our briefs, we have nothing further to offer at this time. However, if -- if Your Honor is interested --

THE COURT: Well you filed a brief, and I don't think you cited any cases. But I -- I could be wrong, and that's why I'm asking you to -- to tell me if you --

MS. STEWART: I'm not sure that I -- we addressed --

THE COURT: -- or maybe your colleagues who --

MS. STEWART: -- the burden issue.

THE COURT: -- the colleagues who assisted you with this would know if there are any cases that you dug up that helped you.

MS. STEWART: I -- the basis for the statement would be in -- would be the fact that plaintiffs have the burden for proving the elements, and that they're entitled to the TRO. I'm not sure that -- that we addressed the -- the question of burden on the --

THE COURT: Well I have an idea.

MS. STEWART: -- affirmative defenses in our brief.

THE COURT: Regardless of cases, and just presuming for the moment that the burden is on the Government, your position -- best position is the Government has met its facial responsibilities, if it has any, by showing a reasonable basis in the congressional record in the relationship to the ACLU versus Reno I and the other cases that -- that the defense -- the defenses are feasible.

You've made a prima facie showing, I guess the Government would say, if that's your requirement. And the burden of going forward on it shifts to the -- the plaintiffs,

and the plaintiffs might disagree with that, but they've made substantial inroads into that problem, the plaintiffs think, by putting forth the work that's done by their members -- by several of the plaintiffs in trying to work out the feasibility.

I was just looking for a very narrow legal issue of

whether there's a formal burden on the Government to prove feasibility.

MS. STEWART: Well, yes, Your Honor, we certainly did believe that we've met that burden to the extent that it exists, and that indeed I believe was my initial response.

THE COURT: Okay. I want to ask the plaintiffs' counsel one other thing, and that is the Government in its brief, and again at the bar of the Court, has argued that the general rule that Courts could -- should view enactments of Congress as presumptively constitutional, and that that's the first argument in their -- the first line of their brief practically.

And I need to know whether the plaintiffs have any view of the value of that statement in the context of First Amendment litigation?

MS. BEESON: Yes, Your Honor. We believe that the -- precisely the opposite is the law, and that is when it comes to content based restrictions on speech, that they presumptively violate the First Amendment. And I can cite a couple of cases for that.

THE COURT: I know you did. I just didn't --

MS. BEESON: Okay.

THE COURT: -- haven't heard you say anything since the brief came out and the argument was made.

MS. BEESON: Yes.

THE COURT: All right. Now let me -- one final thing. Let me make an observation. At 11:59 tonight the -- will be the last minute in which this Act is not in effect. So I have to issue an order before that time, and I will. I don't know whether I'm going to do it this afternoon while you're here or not. It may depend on the -- how -- what our staying power is.

So just to cover something that's -- has to be covered, in just thoroughly going over this whole matter -- and let me say in passing, and I'll probably say it again, this Court respects the positions of both parties in this case. This Court recognizes the importance in the separation of powers between the right of the Congress to -- and its elected officials to state what they believe to be the will of the people, and enact statutes for good and proper purposes of the highest order.

And the Court respects that that's their mission. And generally speaking, that's what they do day in and day out, week in and week out. And the Court respects the fact that no members of this Court or any other Court that will hear this case have been elected by the people of the United States to pass statutes.

So a great deal of recognition -- and I'm not talking about presumptive validity -- I'm talking about recognition of the separation of powers is that the Court has and will give careful analytical deference in that sense to the -- to the enactment of Congress that has made in a good faith attempt to comply with the law. And it doesn't mean how I'm going to come out on my decision. I'm just saying that's part of the process that the -- the public and the parties are entitled to. So when I -- what I was going to -- I say that in connection with the fact that I'm not trying to decide now from this bench what I'm going to do with respect to the TRO, but it will have to be done very shortly.

So I have to -- while I have you altogether, because we don't know whether we're going to stay together and how long, we may, but we may not. I -- so -- the subject of the length of the injunction, if one is issued, we talked about the Rule 65(b) -- I think it's B that provides that the TRO can last ten days, and for good cause shown a similar like period.

No more than ten days in a similar like period.

And I wanted to cover with you two things. One is the technical, but I think substantive issue of whether there's good cause to extend it ab initio. What I'm saying is if I issued a temporary restraining order, I'm thinking of why would we come back and talk with each other in nine days and then do the same thing all over again for another ten days, or something like that?

If there's good cause to have an injunction that lasts for about 20 days, the good cause would seem to me to be in the interest of the parties in preparing their case, to talk with witnesses, to research the law, to engage in discussions about stipulations and all that stuff in the face of a -- if there is a temporary restraining order, it seems to be good cause to me. There's no rule of what good cause is, but I think we could -- if the parties agree to it, certainly can agree that good cause would apply if the Court issues a TRO, to have it last at least until the end of the 9th of December, which on calculation is the -- is the last day, if you had ten days for each leg of the extension.

If the Court issues such an order -- and keeping in mind I don't know what you're going to say about an even more gracious period of time in which to prepare for the permanent injunction hearing. That's another issue. I'd like to discuss them together, but we may not be able to do that for some reason.

So do the parties have any objection if the Court issues a TRO to -- wording it such that the good cause has been shown and the time period will constitute a period of no more than ten days plus one like extension? As long as I mouth the statute and the parties understand what's going on, I don't think that's a -- I have no concern about issuing such an order.

Does anybody disagree that if I issue a TRO that that is not a -- or disagree that that's a responsible way to proceed?

MS. BEESON: We have no problem with it, Your Honor.

THE COURT: Ms. Stewart?

MS. STEWART: I have no authority to acquiesce at this point, Your Honor. I would have to confer with the Department.

THE COURT: Well I'm surprised you've come to court without that kind of authority. It's a housekeeping matter in my view, and I'll do whatever I think I have to do then. I gather then the Government has no power to agree at this time that we're going to have a preliminary injunction hearing at some time later than the 8th and 9th of December?

I asked you to specifically take up that subject and be prepared to discuss it. And we were not able to accomplish that for today, and I respect that. It was a short period of time, and we needed to have a decision promptly. But the issue remains whether or not -- I believe the law will allow us to agree otherwise. We don't have to -- the parties don't have to be saddled with a ten-day -- ten-day rule.

And that there's protection for any party that thinks they've been harmed by that by asserting, and I believe successfully, that for instance if the Court or the other parties -- the other party delays the issuance of a preliminary injunction, then the -- it would seem from the cases that the TRO transmogrifies into a preliminary injunction and becomes appealable. That's what I call protection against unnecessary delay.

But not because the parties or the Court wants excessive delay. But if -- if the parties are worried about that, and particularly the Government, I think they're in control of their own destiny. And certainly the Court is not going to participate or allow excessive delay. Ms. Stewart?

MS. STEWART: Yes, Your Honor. I assume that there won't be a problem with respect to the ten days, but wanted to just have an opportunity to double check on that. With respect to anything further, I'm sorry, but I -- on the conference I misunderstood the Court.

I thought that the Court has indicated that he was -- that we would get together within a few days after the TRO to take up that issue, and so I did not prepare to take it up at today's hearing.

THE COURT: Yeah, I -- that -- that doesn't bother me. I just needed to know whether you were in a position to make a decision. The plaintiffs have already said they're -- would be willing to work on something positively in that direction, and if there's no decision on it then we'll have to let it go.

I don't mind telling you that the Court's schedule is mightily interdicted by this important case, and I'm privileged to work on it with all of you. But I -- I've already had to cancel things for this week, and I have to cancel things for the week of the 7th of December. An old case that's supposed to be on trial that's been around for a while. People are coming from out of town. And I haven't told those folks that their case may be put off because I -- I don't want -- you know, things happen. I hate to have all those folks stop their plans and then find out we're not going ahead in the week of the 7th of December.

So those are just my problems that affect other people, and I need to get it resolved promptly. And I'd like you to work on it promptly. The -- if I deny the TRO the plaintiffs may have a different view of things. So I just wanted to cover those things before we recess.

I can probably tell you within a ten minute recess whether I'm going to issue an order while you're here or not. And if you're willing to wait those few minutes, the form of the order would probably be a reading from the bench with a detailed reasons to follow forthwith. Meaning probably by the end of business tomorrow we would have a memorandum that supports the order.

Rule 65(b) requires detailed reasons, and I -- I will have those reasons, but I'm not going to have them this afternoon. I've just heard the finish of the evidence for Heaven's sake. So -- but I have to make an order by midnight. And if I can make the order, I would think it would help the

parties.

And -- because otherwise, we have to take our outline of the various kinds of findings we need to make the decision that will constitute the memo that goes with it. Between now and midnight we'd be burning the midnight oil.

What I want to do is issue an order that solves whatever the problem is, hopefully from somebody's point of view, in a timely fashion, and not have to stay up all night writing findings, which we can do promptly, but I don't think anybody's going to gripe if they're not done until the end of business tomorrow.

That's my plan. If you stick around for a ten-minute recess, I can tell you whether we're going to have an order promptly, or whether you should disperse and we'll send it by fax. So the Court's in recess for ten minutes.

(Recess)

THE COURT: Thanks for your patience everybody. We're back on the record. The Court is about to rule on the request for temporary restraining order. But before I do, I want to make a brief comment -- very brief comment, and that is the -- the effect of this order that I'm about to give has to do with the grave concern by the Congress of the United States, and of all well meaning people of this country to look out for the health and welfare of minors, and -- meaning children.

And the Court recognizes this laudable purpose of the Congress and indeed of many well thinking people around the country. The order I issue today is not a final order on the merits of this dispute. It's an order that, as the parties are quite aware, temporarily deals with the clash between the important rights under the First Amendment and the important responsibilities of the country to its children.

And the order, if I've not already said it, puts off for another day the determination of whether or not the statute in fact is constitutional, and is not a final decision. Nor should it be construed as being a final decision.

And so this 19th day of November 1998, upon consideration of the motion of plaintiffs for a temporary restraining order, the response of the defendant, the exhibits and declarations submitted by the parties, having held a hearing on this date in which counsel for both sides presented evidence and argument, and having found and concluded for the specific reasons required under Federal Rule of Civil Procedure 65(b) set forth in a memorandum to be issued forthwith.

The plaintiffs have shown one, a likelihood of success on the merits of at least some of their claims. Two, that they will suffer irreparable harm if a temporary restraining order is not issued. And three, that the balance of harms in the public interest weigh in favor of granting the temporary restraining order.

It is hereby ordered that the motion is granted. And the defendant, Janet Reno, in her official capacity as Attorney General of the United States, and pursuant to Federal Rule of Civil Procedure 65(b), defendant's officers, agents, servants, employees and attorneys, and those persons in active concert or participation with defendant, who receive actual notice of this order are temporarily restrained from enforcing or prosecuting matters premised upon 47 United States Code, Section 231 of the Child Online Protection Act, at any time for any conduct that occurs while this order is in effect.

This order does not extend to or restrict any action by the defendant in connection with any investigations or prosecutions concerning child pornography or material that is obscene under 47 United States Code Section 231, or any other provisions of the United States Code.

It is further ordered that the filing of a bond is waived. It is further ordered that this temporary restraining order shall remain in effect for ten days which, calculated according to the -- to Federal Rule of Civil Procedure 6(a), expires on Friday, December 4, 1998.

The Court may modify this order as the ends of justice require. It appears from the arguments of the parties, and research conducted by this Court, that it is unclear whether a Federal Court has the power to enjoin prosecution under a statute for acts that occurred during the pendency of the injunctive relief if the decision to enjoin the enforcement of the statute is later reversed on appeal.

Citing the Edgar case and Judge Stephens concurring, asserting that the Federal Judge lacked the authority to enjoin later state prosecution under the state statute. And citing Marshall, who dissented, asserting that the Federal Judges have the power to grant such injunctive relief. And if the order is ambiguous, it should be presumed to grant such relief.

While there is no binding precedent that affirmatively establishes the power of the Court to enter such an injunction, there is an indication in the case law that plaintiffs who rely in their actions on judgments of the Court, and are later prosecuted for their actions after the judgment is reversed, can be successful in raising the judgment of the Court as a defense to the prosecution.

Referring to Clarke versus the United States, with -- which citing cases and noting that a Federal Judge enjoining a federal prosecution does not present the federalism concerns that were present in Edgar.

Granting injunctive relief to the plaintiffs who are raising a constitutional challenge to a criminal statute that imposes imprisonment and fines on its violators that only immunizes them for prosecution during the pendency of the injunction, but leaves them open to potential prosecution later if the order of this Court is reversed, would be hollow relief indeed for the plaintiffs and members of the public similarly situated.

Thus the Court enjoins the defendant from enforcing COPA, the Child Online Protecting (sic) Act, against acts which occurred during the pendency of this order, in an effort to tailor relief to the realities of the situation facing the plaintiffs.

The defendant urges this Court to bar enforcement of COPA, if at all, only as to the plaintiffs. However, the defendant has presented no binding authority or persuasive reason that indicates that this Court should not enjoin total enforcement of COPA. And I cite ACLU versus Reno, which we call ACLU versus Reno I.

And I cite Virginia versus American Book Sellers Association relied upon by the parties, which notes that in the First Amendment context litigants are permitted to challenge a statute not because of their own rights of free expression are violated, but because of a judicial prediction or assumption that the statutes very existence may cause others not before the Court to refrain from constitutionally protected speech or expression.

The waiver of the bond is provided by law in these special circumstances also by ACLU versus Reno I and the case of Temple University versus White out of the Third Circuit in 1991.

That constitutes the order of this Court, and Mr.

Grace has some copies for people. Mr. Grace, I think you had enough copies to give these gentlemen up here. One, two, if I could please. Give them one from each side. Ms. Stewart, I want a response by the close of business tomorrow if you can do that on the question of whether or not -- well let me say two things. One, the ten days is interdicted by one Federal holiday and two weekends. So you see what happened to the dates? We have to reconsider what we're doing here.

Another ten day period might not have the same effect, but it might have some effect. Rule 6(b) as we know it does -- says you don't -- when an order is for a period of less than 11 days, you don't count Sundays, Saturdays -- weekends and official holidays. So the date is kind of different than it was before.

But I want to know by the end of business tomorrow whether we can -- whether the Court can issue an order by agreement that there's good cause to extend the period of time for another ten days. It's called a like period of time in this -- in the rule. And the rule is calculated as it is under the law, whatever that comes out to be. I haven't done the dates.

And perhaps we should talk about the schedules that have to do with what we thought were required to be done in the week of December 7th, and maybe still should be. Nothing wrong with those dates if they're -- if they have to be utilized. I do want to address as promptly as possible the whole issue of delaying the preliminary injunction hearing for a more reasonable period of time to conduct necessary discovery and present this serious issue to the Court in a -- in more full and complete way. And, Ms. Stewart, the plaintiffs have indicated that they're willing to work with the Court on something like that, and truly it's not totally for the benefit of the Court.

But I think responsible professional conduct on the part of the parties suggests that we do so, and I urge both parties to be able to work with the Court on coming up with a schedule that's more conducive to thoroughness, particularly at this time of year. But at least with respect to the shortest period of time, Ms. Stewart, would you find out your client's position on it promptly tomorrow and talk to Ms. Beeson, and both of you call me some time tomorrow.

MS. STEWART: I will, Your Honor.

THE COURT: Probably no later than 4:00 please. Anybody know anything else we have to do today?

MS. BEESON: Your Honor, I just have a couple of housekeeping details that perhaps Ms. Stewart and I could just discuss privately.

THE COURT: Okay, that's fine. But we want to -- if we're -- do you think you're going to end up with anything on the record, or don't you know?

MS. BEESON: No, actually. No. If we want to just close the record and then --

THE COURT: We can just do it at the end --

MS. BEESON: Okay.

THE COURT: -- of time. The proceedings for the day are concluded. The counsel are excused, and we're off the record.

*****

C E R T I F I C A T I O N

We, Kathleen Downs, Diana Doman and Karen O'Malley, certify that the foregoing is a correct transcript from the record of proceedings in the above-entitled matter.

___________________________________
KATHLEEN DOWNS

___________________________________
DIANA DOMAN

___________________________________
KAREN O'MALLEY

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