BURBANK, CA — Special Agent Chuck Joyner, the lead FBI agent in charge of 2257 record inspections, told YNOT yesterday that he has no problem with companies keeping their records with an attorney as opposed to a commercial or home office. While that will seem quite reasonable and accommodating to most industry observers, it’s also a controversial opinion in adult industry legal circles.“I don’t care who has the records,” said Joyner, explaining his philosophical approach to inspections. “You tell us who has the best records … just tell me where the best records are kept.”
Asked if that meant companies could also list their attorney as Custodian of Record, Joyner confirmed that such an approach would be acceptable to his team.
According to Joyner, there are instances where his team has to interpret the law while developing procedures for inspections. One of those instances involves the requirement that records are kept at a “place of business.”
“I thought it would be fair to interpret that broadly,” Joyner told YNOT.
Additionally, Joyner confirmed that use of a third-party record keeping service is also acceptable, provided the company being inspected has remote access to the records.
“They can keep it at one central location, as long as they have access through the Internet,” said Joyner.
Various adult industry attorneys have repeatedly advised clients that keeping records with an attorney would not satisfy the requirements of 2257. According to prominent First Amendment attorney Larry Walters of Weston, Garrou, DeWitt & Walters, Joyner’s comments are at odds with comments provided by the government when the 2005 regulations were released.
“While the place of business concept might be interpreted broadly, the concept of third party record keeper is fairly discernable concept,” Walters told YNOT.
Looking to the Department of Justice’s comments provided in 2005 in support of the new 2257 regulations, YNOT found the following paragraphs:
“Two commenters commented that the implicit requirement that records be kept at a place of business is unreasonable and argued that the regulation should permit third-party custody of records. The Department declines to adopt this comment. Permitting a third party to possess the records would unnecessarily complicate the compliance and inspection processes by removing the records from the physical location where they were initially collected, sorted, indexed, and compiled. For example, producers could provide false names and addresses to the third party as a means to avoid scrutiny by law enforcement. Historically, producers have used front corporations in order to evade both law enforcement and tax authorities. Permitting third-party custodianship would exacerbate this problem. Custodians could, for example, disclaim any responsibility for the condition or completeness of the records or be unable to provide additional information regarding the status of the records. Permitting such third-party custodians in the final rule would thus require additional regulations to ensure that the third-party custodian could guarantee the accuracy of the records, would act as a legally liable agent of the producer, and would raise other administrative issues as well.”
“Furthermore, permitting a third party to maintain the records would, if anything, exacerbate the concerns of numerous commenters regarding the privacy of information on performers and businesses by placing that information in the hands of another party.”
When YNOT pointed out to Joyner that industry attorneys often advise that attorney-kept records are not allowed, Joyner reiterated his position that keeping records with an attorney would be acceptable to his team, and offered some additional assurances that his broad interpretation of “place of business” was not in dispute – at least, not in certain government circles.
“I spoke to the US attorney assigned to this case and the DOJ attorney,” Joyner said, speaking about his approach to allow third party record keepers. “And they both said, ‘That’s fine with us.’”
Joyner told YNOT that he understands that there are ambiguities in the law, and that industry attorneys are likely to error on the side of caution in order to keep their clients as safe as possible.
“A lot of the information the attorneys are giving is outstanding,” said Joyner. He added that most attorneys do not want their clients “walking the fine line of the law.”
That comment certainly seemed to match up with Walters, who was concerned that Joyner’s comments could cause industry companies to take unwarranted legal risks.
“Number one, this is obviously not a policy maker and it’s not a person who can issue a formal interpretation,” Walters argued. “What he is doing is offering a contrary interpretation to the official comments.”
Attorney J.D. Obenberger of XXXlaw.net also cautioned that Joyner’s comments do not obligate the United States government to follow suit.
“Joyner does not have the authority to bind the US government,” Obeneberger agreed.
According to Walters, use of any third party record-keeping service is prohibited “under the clear mandate of the regulation, and under the discussion and comments” from the DOJ.
Walters said, “I appreciate Joyner’s efforts … we need more agents like him, frankly.” But added about the third party situation, “Comments like this are going to get people in trouble.”
“What I’m saying is not legal advice,” Joyner cautioned. He admitted that “I could be gone tomorrow,” and that his successor could have different ideas about how to interpret “place of business” or other aspects of the law. But even if he were to depart, he reasoned, the procedures that have been put in place already would provide some amount of predictability fpr the adult industry.
“We’re setting a precedent … in how the inspections are being conducted, and what’s being written up as a violation.” Joyner argued that if the procedures were to change, it would be reasonable for the adult industry to expect notification from the government.
But for an industry that has been routinely targeted by ideologues, there isn’t always a lot of trust that what’s reasonable is what will get carried out.
“We have seen government agents and prosecutors act unfairly and not in the best interest of the people they’re prosecuting,” said Walters. “That’s not going to come as a surprise to anybody.”
So for adult industry companies, it may come down to an issue of risk – and how much risk is acceptable. Walters concedes that the chance of Joyner writing up a company with a violation for using a third party service is “next to nil” given the comments he has made assuring the industry otherwise, but is deeply concerned about the conflict between the FBI’s position and those stated by both Congress and the DOJ. He also points out that Joyner’s eventual successor could potentially go back and issue violations that Joyner’s team declined to issue.
“These things need to go through the formal channels,” Walters said.
Asked if his firm would nonetheless agree to keep a client’s records if requested by the client after the risks were explained, Walters said they would not agree to that. Even though he said his firm tries to offer useful services to its clients, agreeing to keep records, he felt, would open up potential legal liabilities for his firm. Plus, he voiced concern about the possibility that keeping records could cause him to be conflicted out of representing his own client by virtue of being named a witness in any 2257-related case that involved his client.
Obenberger, like Walters, said his firm too would decline to act as Custodian of Records for its clients.
So when contemplating the use of third party record-keeping solutions, perhaps the question adult companies should be asking themselves is, “Do I feel lucky?” Well… do you?
