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ELIZABETH A. STRANGE 

First Assistant United States Attorney 

District of Arizona 

KEVIN M. RAPP (Ariz. Bar No. 14249, 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 

JOHN J. KUCERA (Cal. Bar No. 274184,john.kucera@usdoj.gov) Special Assistant U.S. Attorney 

312 N. Spring Street, Suite 1200 

Los Angeles, CA 90012 

Telephone (213) 894-3391 

JOHN P. CRONAN 

Acting 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. 

CR-18-422-PHX-SPL (BSB) UNITED STATES’ REPLY IN 

SUPPORT OF MOTION TO 

DISQUALIFY COUNSEL 

(DWT FIRM) 

[Reply to CR 177]

INTRODUCTION 

The law firm of Davis Wright Tremaine (“DWT”) has filed a notice of appearance 

in this case on behalf of two defendants: Michael Lacey and James Larkin. The United 

States has, in turn, moved to disqualify the DWT firm based on conflicts of interests arising 

from its previous representation of Carl Ferrer (see CR 118), Lacey and Larkin have filed 

a response (see CR 180), and the United States has now filed a reply (see CR 193). 

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Another party to this lawsuit, defendant Andrew Padilla, also has filed an opposition 

to the DWT-related disqualification motion (see CR 177). In general, the arguments 

contained in Padilla’s pleading mirror the arguments contained in the Lacey/Larkin 

pleading. Specifically, Padilla argues that disqualification isn’t required because Ferrer 

purportedly waived his personal attorney-client privilege with the DWT firm, because 

Ferrer signed several joint representation agreements that purportedly contained conflictwaiver provisions permitting the DWT firm to represent Lacey and Larkin in the event of 

a future conflict, because Ferrer has chosen to cooperate, and because Ferrer didn’t 

formally join in the disqualification motion. All of these claims are addressed in detail in 

the United States’ reply concerning the Lacey/Larkin opposition, and the United States 

incorporates its arguments here. 

Padilla’s pleading also contains a few additional arguments that do not appear in the 

Lacey/Larkin brief. Those arguments are addressed below. 

ARGUMENT 

A. It Is Unclear Whether Padilla Has Standing To Contest DWT’s Disqualification 

Padilla asserts that he has standing to be heard on the disqualification issue because 

he and his retained attorney (Mr. Piccarreta) signed a joint defense agreement (“JDA”) in 

2017 “and it was the intent of the agreement that Mr. Padilla, and other signatories to the 

agreement, would continue to receive the benefit of the excellent representation DWT’s 

lawyers had been providing . . . .” See CR 177 at 2. Citing United States v. Jones, 44 F.3d 

860 (10th Cir. 1995), and a bar journal article, he contends he therefore has a “personal 

Sixth Amendment right[]” to the DWT firm’s continued assistance. See CR 177 at 9-10. 

As a threshold matter, it is not clear whether the Court needs to resolve the standing 

issue. Padilla’s merits arguments concerning whether the DWT firm should be disqualified 

are essentially the same as the arguments contained in the Lacey/Larkin pleading. If the 

Court determines the DWT firm should be disqualified, then the issue of Padilla’s standing 

will matter only for appellate/preservation purposes. And if the Court determines the DWT 

firm shouldn’t be disqualified, then the issue of Padilla’s standing will be moot. 

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Nevertheless, to the extent the Court wishes to resolve the standing issue, Padilla’s 

brief omits an important, and perhaps dispositive, factual point. As discussed in the reply 

to the Lacey/Larkin pleading, it is the United States’ understanding that the DWT firm never 

signed the JDA. It is therefore unclear how Padilla can point to the document as the source 

of a constitutional right to the DWT firm’s assistance. 

Finally, even if the DWT firm had signed the JDA, this would still not resolve the 

issue in Padilla’s favor. In Jones, the district court granted the government’s motion in a 

multi-defendant case to temporarily disqualify two defendants’ attorneys. 44 F.3d at 872-

73. On appeal, neither of those defendants disputed the disqualification ruling, but a third 

defendant (Scott) sought to do so. Id. The Tenth Circuit affirmed in relevant part, holding 

that “[a] defendant . . . does not have standing to raise the Sixth Amendment claims of a 

co-defendant. Neither Ms. Jones nor Ms. Johnson challenges the disqualifications on 

appeal. Their co-defendant, Mr. Scott, may not vicariously assert their rights. We therefore 

hold that Mr. Scott does not have standing to challenge the disqualification of the attorneys 

on grounds that the disqualification deprived his co-defendants of their right to counsel of 

choice.” Id. at 873. Admittedly, in the next paragraph of the opinion, the court suggested 

that Scott did have standing to assert a claim that he had a personal Sixth Amendment right 

to pursue a joint defense, but the court didn’t provide any analysis in support of this 

statement and went on to reject Scott’s claim on the merits. Id. 

Because Jones is an out-of-Circuit decision whose statement about “joint defense” 

standing is not particularly thorough or reasoned, the Court need not follow it here. 

Moreover, decisions from within the Ninth Circuit suggest Jones may be incorrect on this 

issue. In United States v. Stepney, 246 F. Supp. 2d 1069 (N.D. Cal. 2003), the court 

provided an extensive discussion of the difference between the joint-defense privilege and 

the attorney-client privilege. Id. at 1073-84. The upshot of that analysis is that “[j]oint 

defense agreements are not contracts which create whatever rights the signatories choose” 

and that “[c]ourts have consistently viewed the obligations created by joint defense 

agreements as distinct from those created by actual attorney-client relationships.” Id. at 

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1080. Similarly, in Roosevelt Irrigation District v. Salt River Project Agricultural 

Improvement & Power Distict, 810 F. Supp. 2d 929 (D. Ariz. 2011), the court recognized 

that “a traditional attorney-client relationship is not established between an attorney and 

his client’s former co-defendant via a joint defense agreement.” Id. at 962. 

These authorities make clear that Padilla did not form an attorney-client relationship 

with the DWT firm simply by signing the JDA. And because he did not have an attorneyclient relationship with the firm, it is unclear why he should be able to assert any personal 

Sixth Amendment-based rights and claims based on the firm’s participation or nonparticipation in this case. 

B. Padilla’s Balancing-Of-Interests Arguments Are Unavailing 

 Padilla contends the government must have been acting with a nefarious purpose 

when it filed the disqualification motion because there will be “no damage to Mr. Ferrer or 

the government if the government’s motion is not granted” and because the motion was 

accompanied by “simultaneous efforts in this matter to seize legitimate assets necessary to 

retain counsel of choice.” See CR 177 at 12-15. He further contends the DWT firm will 

be crucial to his defense in light of the firm’s “very successful” track record of litigating 

First Amendment issues on Backpage’s behalf. Id. at 1-4 & n.4, 12-13. He continues: 

“[C]ourts have consistently found, in cases litigated by DWT . . . [that] Mr. Padilla’s acts, 

and those of others at Backpage, are prototypical editorial functions that are clearly 

protected by the First Amendment.” Id. at 13. 

 These claims are misplaced. First, the Court should reject Padilla’s efforts to belittle 

the strength and sincerity of the government’s and Ferrer’s interests in the disqualification 

issue. The ethical conflicts presented by the DWT firm’s conduct are palpable, have 

already led one court to order the firm’s disqualification, and could wreak havoc at trial or 

on appeal should the firm be permitted to remain on the case. The government has a 

legitimate interest in avoiding such issues. United States v. Culp, 934 F. Supp. 394, 399 

(M.D. Fla. 1996) (“[The] argument that the Government lacks standing to raise the issue 

of a potential conflict gives short shrift to the respective interests of the Government and 

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the Court in ensuring that judgments remain intact on appeal . . . [and] betray[s] a 

conception of the interests at stake in this motion which is both unduly narrow and overly 

simplistic.”). 

Second, Padilla’s effort to draw some sort of parallel between the disqualification 

motion and the asset-seizure efforts in this case is a distraction. The government filed the 

disqualification motion as soon as it became aware of the ramifications of the DWT firm’s 

participation (and after attempting to meet and confer with Mr. Padilla’s counsel and 

others). This is what prosecutors are supposed to do—indeed, courts have faulted 

prosecutors for failing to raise similar issues until the eve of trial. United States v. Iorizzo, 

786 F.2d 52, 59 (2d Cir. 1986). Meanwhile, the government’s asset-seizure efforts in this 

case occurred simultaneously with the unsealing of the indictment and arrest of the 

defendants. This is standard practice. That the two occurred in roughly the same timeframe 

is logical and unremarkable. 

There is also no merit to Padilla’s claim that the asset-seizure efforts in this case 

resulted in the seizure of “legitimate” assets and improperly interfered with the defendants’ 

access to counsel. As Padilla presumably knows (from the discovery materials that were 

provided to the defense last month), the seizure efforts in this case were made pursuant to 

warrants signed by federal judges. Those warrants were supported by affidavits (which 

have been provided to the defense) demonstrating, to the issuing judges’ satisfaction, that 

the seized funds were tainted. It has been established for decades that a criminal defendant 

has no right to use tainted funds to pay for counsel. See, e.g., Caplin & Drysdale v. United 

States, 491 U.S. 617, 631 (1989). 

Third, although Padilla’s brief seeks (as part of its balancing-of-interests argument) 

to create the impression that the DWT firm has secured an unbroken line of victories on 

First Amendment issues in Backpage-related cases, the brief omits any discussion of the 

multiple recent proceedings in which those claims have been rejected. For example: 

• PSI Litigation: In October 2015, the Senate Permanent Subcommittee on 

Investigations (“PSI”) issued a subpoena to Carl Ferrer for certain Backpage-related 

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records. After Ferrer (represented by the DWT firm) declined to comply, the Senate held 

him in contempt and initiated a lawsuit against him in federal court. During this litigation, 

the DWT firm advanced an array of First Amendment-based challenges to the subpoena. 

In a published decision issued in August 2016, the district court rejected those arguments, 

holding that “there is simply no legal or factual support for the proposition that being 

required to search for responsive documents would abridge Mr. Ferrer’s protected 

freedoms of speech or press” and that the “First Amendment does not protect speech that 

is itself criminal because it is too intertwined with illegal activity.’” Senate Permanent 

Subcommittee on Investigations v. Ferrer, 199 F. Supp. 3d 125, 138, 140 (D.D.C. 2016). 

The following year, the D.C. Circuit unanimously rejected (on mootness grounds) the 

DWT firm’s appeal. Senate Permanent Subcommittee on Investigations v. Ferrer, 856 

F.3d 1080 (D.C. Cir. 2017). 

• J.S.: In 2015, the Washington Supreme Court rejected an effort by the DWT firm 

to dismiss, on First Amendment grounds and under the Communications Decency Act 

(“CDA”), a civil lawsuit brought against Backpage by three minor girls who had been 

“bought and sold for sexual services online on Backpage.com.” See J.S. v. Village Voice 

Media Holdings, Inc., 359 P.3d 714, 715-16 (Wash. 2015). The Court held that, because 

the plaintiffs had plausibly alleged that Backpage does “more than just provide a forum for 

illegal content” and affirmatively shapes the content of users’ ads through “posting rules 

[that are] ‘designed to help pimps develop advertisements that can evade the unwanted 

attention of law enforcement, while still conveying the illegal message,’” the plaintiffs 

should be permitted to conduct discovery “to ascertain whether in fact Backpage designed 

its posting rules to induce sex trafficking.” Id. at 718. In 2017, following extensive 

discovery, the trial judge in the J.S. case denied Backpage’s motion for summary judgment. 

Afterward, Backpage agreed to enter into a confidential settlement with the plaintiffs. 

• Doe No. 1: In 2018, a federal judge in Massachusetts rejected an effort by the 

DWT firm to dismiss, on First Amendment and CDA grounds, a civil lawsuit brought by 

a different minor girl who had been trafficked via Backpage. See Doe No. 1 v. 

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Backpage.com, LLC, 2018 WL 1542056 (D. Mass. 2018). The court explained that, 

because the plaintiff had made a plausible allegation that Backpage had “redrafted [her] 

advertisement . . . to suggest she was an adult,” the alleged conduct was not covered by the 

CDA’s grant of immunity. Id. at *1. 

Finally, and perhaps most important, Padilla’s brief fails to disclose that the DWT 

firm has already engaged in extensive First Amendment-related litigation in this case. 

Specifically, during the grand jury litigation that preceded the indictment, Judge Campbell 

and a unanimous three-judge panel of the Ninth Circuit rejected the DWT firm’s First 

Amendment-based challenges to the government’s investigation and theory of the case.1

 

As background, in October 2016, the grand jury issued a subpoena (“the 108 

subpoena”) to Ferrer and Backpage for an array of internal company documents. In 

response, the DWT firm (as well as the law firm of Henze Cook Murphy) mounted a First 

Amendment-based challenge to the subpoena on behalf of Ferrer and Backpage. 

In February 2017, following extensive briefing and a lengthy oral argument, Judge 

Campbell rejected these objections and ordered Ferrer to comply. See Exhibit A (transcript 

of February 22, 2017 hearing). In support of this ruling, Judge Campbell made factual 

findings that “this grand jury investigation . . . is a good faith investigation and not being 

undertaken for bad faith purposes” (id. at 65), that there was a reasonable basis to suspect 

“that Backpage has knowingly been involved with the posting of illegal advertisements” 

(id. at 63), and that the subpoena was properly tailored “to determine whether or not 

Backpage and its personnel knew that advertisements posted on its website were for illegal 

activity . . . which is a key question in whether or not crimes have been committed” (id. at 

66). Notably, Judge Campbell also confirmed that 18 U.S.C. § 1952—which is the statute 

underlying many of the charges in the indictment—“criminalize[s] the knowing 

 

1

 On May 17, 2018, Judge Campbell issued an order authorizing the United States to 

disclose, during the proceedings in this case, the previously-sealed materials enclosed as 

Exhibits A-D to this pleading. 

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publication of an advertisement for illegal prostitution or other illegal activity” and noted 

that Ferrer’s and Backpage’s counsel (from the DWT firm) had conceded this point during 

oral argument. Id. at 65. See also id. at 37 (DWT concession); Exhibit B (minute entry). 

In April 2017—presumably upon the advice of the DWT firm—Ferrer was held in 

contempt of court for declining to comply with Judge Campbell’s order. See Exhibit C. 

(This contempt ruling was a prerequisite for creating jurisdiction for any attempt to appeal.) 

In June 2017, following expedited briefing, the Ninth Circuit issued a unanimous 

unpublished decision affirming Judge Campbell’s decision. See Exhibit D. 

C. Padilla’s Arguments Regarding The Merits Of The Criminal Charges Are Both 

Irrelevant And Erroneous 

Although most of Padilla’s brief focuses on disqualification-related issues, he 

includes two arguments that touch upon the merits of the underlying criminal charges. 

Specifically, he argues (1) the charges in the indictment are barred by the CDA and (2) he 

lacked the “specific intent” required to convict him of a crime. See CR 177 at 13-14. 

 In the United States’ view, the Court need not resolve these arguments because 

they have no bearing on the disqualification issue. Additionally or alternatively, the 

arguments fail on the merits. 

First, Padilla’s invocation of the CDA does not survive even casual scrutiny. 

Although the CDA precludes certain criminal prosecutions brought under state law as well 

as civil-damages lawsuits, it makes clear that criminal prosecutions brought under federal 

law are not subject to the same limits and should not be impaired. 47 U.S.C. § 230(e)(1) 

(“Nothing in this section shall be construed to impair the enforcement of . . . [any] Federal 

criminal statute.”). It would turn the rules of statutory construction on their head to 

conclude that, notwithstanding what it expressly said in the text of the CDA, Congress 

secretly harbored an unexpressed desire to prevent federal criminal enforcement activities. 

Indeed, even the DWT firm has conceded the CDA wouldn’t provide a defense to 

the current charges. In 2014, one of the DWT attorneys who seeks to represent Lacey and 

Larkin in this case wrote an article (which is available on the DWT website) 

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acknowledging the CDA doesn’t preempt federal criminal prosecutions: “Section 230 has 

been widely recognized as a boon to the growth of the Internet in the U.S., but it preempts 

only state law and does not override federal criminal law . . . .” In November 2016, the 

DWT firm made a similar concession in a pleading filed with the U.S. Supreme Court, 

recognizing “the exception in Section 230(e)(1) for criminal enforcement [that] applies 

only to federal criminal prosecutions.” And again, during the California prosecution of 

Ferrer, Lacey, and Larkin, the DWT firm acknowledged in a pleading that “immunity 

[under the CDA] does not extend to prosecutions under a ‘Federal criminal statute.’” 

Second, the question whether Padilla possessed the “specific intent” to commit a 

crime is a quintessential issue that must be resolved at trial by a jury. See, e.g., United 

States v. Ravoy, 994 F.2d 1332, 1338 (8th Cir. 1993) (“The question of intent is a 

quintessential jury issue.”). The United States would further note that the indictment 

summarizes several pieces of damning evidence concerning Padilla’s intent, including 

emails where he threatened subordinates with termination for having the temerity to 

acknowledge, in writing, that Backpage’s “escort” ads were actually solicitations for 

prostitution. 

Respectfully submitted this 13th day of June, 2018. 

 ELIZABETH A. STRANGE 

 First Assistant United States Attorney 

 District of Arizona 

 

 /s Kevin Rapp

 KEVIN M. RAPP 

 MARGARET PERLMETER 

 PETER S. KOZINETS 

 ANDREW C. STONE 

 Assistant U.S. Attorneys 

JOHN J. KUCERA 

Special Assistant U.S. Attorney 

 JOHN P. CRONAN 

 Acting Assistant Attorney General Criminal Division, U.S. Department of Justice 

 REGINALD E. JONES 

 Senior Trial Attorney 

 U.S. Department of Justice, Criminal Division 

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 Child Exploitation and Obscenity Section 

Certificate of Service 

I hereby certify that on this date, 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 following CM/ECF registrants: Anne Chapman, Erin McCampbell, James 

Grant, Lee Stein, Paul Cambria, Robert Corn-Revere, Ronald London, Janey Henze Cook, 

John Littrell, Kenneth Miller, Thomas Bienart, Jr., Bruce Feder, Michael Kimerer, Rhonda 

Neff, KC Maxwell, David Wakukawa, Michael Piccarreta, Stephen Weiss. 

s/ Sally Hawley 

U.S. Attorney’s Office 

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