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GLENN B. McCORMICK

Acting United States Attorney District of Arizona

KEVIN M. RAPP (Ariz. Bar No. 014249, kevin.rapp@usdoj.gov) MARGARET PERLMETER (Ariz. Bar No. 024805, margaret.perlmeter@usdoj.gov) PETER S. KOZINETS (Ariz. Bar No. 019856, peter.kozinets@usdoj.gov) ANDREW C. STONE (Ariz. Bar No. 026543, andrew.stone@usdoj.gov) Assistant U.S. Attorneys

40 N. Central Avenue, Suite 1800

Phoenix, Arizona 85004-4408

Telephone (602) 514-7500

DAN G. BOYLE (N.Y. Bar No. 5216825, daniel.boyle2@usdoj.gov) Special Assistant U.S. Attorney

312 N. Spring Street, Suite 1400

Los Angeles, CA 90012

Telephone (213) 894-2426

KENNETH POLITE

Assistant Attorney General 

Criminal Division, U.S. Department of Justice

REGINALD E. JONES (Miss. Bar No. 102806, reginald.jones4@usdoj.gov) Senior Trial Attorney, U.S. Department of Justice

Child Exploitation and Obscenity Section

950 Pennsylvania Ave N.W., Room 2116

Washington, D.C. 20530

Telephone (202) 616-2807 

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff, 

v. 

Michael Lacey, et al.,

Defendants.

No. CR-18-422-PHX-SMB

UNITED STATES’ REPLY IN 

SUPPORT OF MOTION TO 

PRECLUDE DEFENDANTS’ 

ADVICE OF COUNSEL DEFENSE

Defendants’ response misses the mark. If Defendants want to rely on attorneys’ 

advice to demonstrate their good faith, the privilege needs to be waived and the United 

States permitted to probe Defendants’ disclosures to their attorneys. It matters not whether 

certain legal memoranda are privileged—the entire point of relying on advice of counsel is 

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to (a) show a defendant’s good faith through (b) following his attorney’s advice, after (c) 

making a full disclosure of all material facts to the attorney. If Defendants won’t permit 

the United States to probe Defendants’ disclosures to their attorneys, they are precluded 

from raising a good faith defense based on advice of counsel. 

Defendants argue—without any legal support—that no privilege waiver is 

necessary to introduce legal memoranda at trial in support of their good faith. (Doc. 1239 

(“Resp.”) at 9.) The law is otherwise. (Doc. 1234) (citing Bisno v. United States, 299 F.2d 

711, 719-20 (9th Cir. 1961) (advice of counsel only available upon a showing that a 

defendant made a full disclosure of all relevant and material facts to his attorney); United 

States v. Ibarra-Alcarez, 830 F.2d 968, 973 (9th Cir. 1987).) This is the crux of the United 

States’ motion. Defendants give it short shrift. Instead, Defendants re-raised their 

unsuccessful motion to dismiss for outrageous government conduct. The United States 

will briefly address their inapplicable arguments.

1. Privilege Issues

Defendants’ renewed motion to dismiss is based on a mistaken premise—that the 

United States argued that various legal memoranda produced by Defendants were 

privileged. (Resp. at 3.) Simply because a document—on its face—appears to be 

privileged doesn’t make it so. As this Court made clear, determining whether 

communications are covered by the attorney-client privilege involves an eight-part test. 

(Doc. 1168 at 8) (citing United States v. Ruehle, 583 F.3d 600, 607 (9th Cir. 2009).) When 

the United States first viewed the legal memoranda disclosed by Defendants last month, it 

had no idea whether the documents were actually privileged. That prompted the email to 

Defendants’ attorneys, who stated the memoranda were in fact not privileged. (Doc. 1234-

2.) 

Defendants assert that this Court mistakenly denied their motion to dismiss. (Resp. 

at 4 (“Defendants firmly believe the Court erred in its ruling that the government did not 

invade the privilege.”).) They disparage the Court’s reasoning in its order; specifically

that “Defendants have publicly disclosed their defense theories regarding Backpage’s 

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operations, including reliance on the First Amendment, the CDA and not possessing 

criminal intent, in a multitude of ways.” (Resp. at 3 (citing Docs. 998 and 1168) (emphasis 

in original.)) Defendants further argue: “Indeed, the specific legal memorandum that the 

government identifies in its motion references Section 230 and the First Amendment, the 

very subjects the government previously claimed were not privileged because Backpage 

had disclosed these defenses publicly.” (Resp. at 3.) 

But Defendants’ response provides further support for the Court’s reasoning that 

these defenses have all been publicly disclosed. The response expressly states that this

particular legal memorandum, which “references Section 230 and the First Amendment,” 

had been “disclosed to third parties, including financial institutions.” (Resp. at 3, n.1.) 

This statement is further proof these defenses have been publicly disclosed in a multitude 

of ways. Defendants’ renewed motion should be denied.

2. Defendants’ Future Potential Privilege Waiver

The final issue raised by Defendants’ response—especially when considered in 

conjunction with their recently disclosed exhibit and witness lists—involves the timing of 

any potential privilege waiver. Defendants argue in their response that they are free to 

waive the attorney-client privilege at trial, because a good faith reliance on advice of 

counsel is not an affirmative defense that Defendants are required to disclose. (Resp. at 

11.) Recently, however, Defendants disclosed their trial witness list, which included 58 

potential witnesses,1 and 11 attorney witnesses that were previously included on 

Defendants’ list of counsel who had done legal work for Backpage or the individual 

Defendants. (See March 25, 2019 Letter from Piccarreta to Stone, attached as Ex. A.)

In accordance with Rule 26.2, Defendants have an obligation to produce any witness 

statements that are in their possession that relate to the subject matter of the witness’s

testimony. Fed. R. Crim. P. 26.2(a); see also Doc. 131 (setting May 27, 2019 for 

production of Rule 26.2 statements).2

 The government understands that Defendants may 

1 Approximately 50 of these identified witnesses are newly disclosed. 

2 Defendants have not confirmed compliance with Rule 26.2 for any of these newly 

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not call each of these 11 attorneys to testify, but it would be prejudicial for Defendants to 

wait until the last minute before disclosing statements for any witnesses that do testify. 

Accordingly, it is appropriate for the Court to set a date certain by when Defendants need 

to comply with Rule 26.2. This is contemplated by the Rule. Fed. R. Crim. P. 26.2(e) (“If 

the party who called the witness disobeys an order to produce or deliver a statement, the 

court must strike the witness’s testimony from the record.”). Many of these attorney 

witnesses will likely have thousands of pages of discovery that Defendants will need to 

disclose. The United States is attempting to prevent an untimely disclosure that would 

serve to delay the trial. 

Accordingly, the United States requests that the Court set a deadline for when 

Defendants need to produce all Rule 26.2 statements for its witnesses.

Respectfully submitted this 31st day of August, 2021.

GLENN B. McCORMICK

Acting United States Attorney District of Arizona

s/ Andrew C. Stone

KEVIN M. RAPP

MARGARET PERLMETER

PETER S. KOZINETS

ANDREW C. STONE

Assistant U.S. Attorneys

DAN G. BOYLE

Special Assistant U.S. Attorney

KENNETH POLITE

Assistant Attorney General 

U.S. Department of Justice 

Criminal Division, U.S. Department of Justice

REGINALD E. JONES

Senior Trial Attorney

U.S. Department of Justice, Criminal Division

Child Exploitation and Obscenity Section

disclosed witnesses. 

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CERTIFICATE OF SERVICE

I hereby certify that on August 31, 2021, I electronically transmitted the attached 

document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a 

Notice of Electronic Filing to the CM/ECF registrants who have entered their appearance 

as counsel of record.

s/Zachry Stoebe

U.S. Attorney’s Office

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