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Till Debt Do Us Part

netly news link From Netly News Writer Declan McCullagh

Ever since challenging the Communications Decency Act in early 1996, the two coalitions that filed the lawsuit have appeared unbeatable. Not only did a Philadelphia court rule that the law violated the Constitution's guarantees of freedom of speech, but the Supreme Court unanimously agreed in June.

Now one group's string of victories may be ending. The Center for Democracy and Technology (CDT), which organized the high tech lawsuit, may lose its final battle: getting reimbursed nearly $600,000 for money spent on lawyers.

Under federal law, only nonprofit groups or corporations worth less than $7 million can request attorney's fees after successfully challenging an unconstitutional law before the Supreme Court. The Department of Justice claims that since such wealthy firms as America Online, Microsoft, Apple and CompuServe paid for much of the lawsuit, CDT should not be reimbursed. The government has asked for four months to investigate, charging in court papers that "other entities actually bore the costs of the litigation and merely funneled money through" CDT.

In other words, if Microsoft had hired the lawyers, Bill Gates couldn't get reimbursed. The DoJ claims that Microsoft "funneled" the cash through CDT, which then turned around and asked Uncle Sam for a check.

CDT opposes the government's request for additional time. Documents filed in Philadelphia district court last Friday show that the money raised was from a broad coalition of groups, not all of which expect reimbursement, says CDT's director, Jerry Berman. "Maybe all the money doesn't qualify, maybe we can't get all of it back. But certainly the small associations, CDT's money and the library money ought to come back."

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A major contributor to the lawsuit (and the lead plaintiff) was the American Library Association and the related Freedom to Read Foundation, which spent $475,000. The total costs of the lawsuit, though, ballooned to more than $1.3 million, and CDT still needs to raise $200,000. (CDT can't ask to be reimbursed for the full amount since its attorneys charged much more than the $130 an hour the law sets as an upper limit.)

Even as CDT faces a tough struggle, the American Civil Liberties Union -- which led a coalition of nonprofit groups in a separate but coordinated lawsuit -- is optimistic about recovering roughly $400,000 in expenses. "[The law] was exactly intended to encourage organizations like the ACLU Foundation, which was set up to handle these kinds of cases on behalf of people who don't have the resources to handle these cases themselves," says Barry Steinhardt, the ACLU associate director.

Unlike the CDT coalition -- which employed a law firm and was funded by outside groups -- the ACLU used its own lawyers and money and has been reimbursed for similar lawsuits before. Last Friday the ACLU filed court documents saying it was eligible for attorney's fees and arguing against delaying its request past mid-October.

If CDT receives attorney's fees, the group says it first will use the money to settle outstanding bills owed to the Washington law firm of Jenner & Block, which has capped its fees at $1.1 million. "Other than payments to Jenner & Block (and possibly to the ALA), all proceeds will be used by [CDT ] to further the general goals of... protecting free speech on the Internet and empowering families who are using the Internet to protect their children from material they judge inappropriate," CDT deputy director Danny Weitzner says in court documents.

At issue here is the relationship between CDT, the lawsuit's funders and the Citizens Internet Empowerment Coalition, a project of CDT. The Justice Department has asked the CDT plaintiffs to respond to 40 pages of detailed questions and requests to turn over documents. "The existence and nature of the fee arrangements among the plaintiffs is critical to determining whether ineligible parties are the real parties in interest," the government says. The "ineligible" parties who helped out: America Online ($130,000), CompuServe ($50,000), Microsoft ($75,000), Netcom ($10,000), and Prodigy ($75,000).

Even if CDT and the ACLU can show they're eligible for lawyer's fees, they have one more hurdle to leap: to show the Justice Department was wrong to defend the CDA as constitutional.

You might think that after enduring 18 months of humiliating defeats in two district courts and the Supreme Court, the Clinton administration might be willing to throw in the towel and admit the law was brain-dead from the beginning. You'd be wrong. Unbelievably, the government claims it was correct to argue all the way to the Supreme Court that the CDA did not violate the First Amendment. Says the Justice Department, "Defendants will demonstrate that their defense of the CDA was substantially justified and that plaintiffs' requests for fees should be denied on that basis alone."

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