A Chicago federal judge this week paused consolidated lawsuits alleging Salesforce Inc. helped facilitate sex trafficking through the now-defunct website Backpage because criminal prosecution against one of the site’s founders is pending.
On Tuesday, Chief U.S. District Judge Virginia M. Kendall for the Northern District of Illinois said the consolidated cases against the software company will remain frozen until an Arizona criminal case against Backpage co-founder Michael Lacey is fully resolved. The court’s decision will delay discovery and other proceedings in the suits alleging Salesforce knowingly benefited from sex- trafficking activity on the site.
Kendall said the court saw “no reason” to depart from the Trafficking Victims Protection Reauthorization Act’s (TVPRA) mandatory stay provision while Lacey appeals a money laundering conviction to the U.S. Court of Appeals for the Ninth Circuit.
“Here, there are pending criminal allegations against Lacey for his participation in Backpage’s sex trafficking venture and pending civil allegations against Salesforce for its involvement in the same scheme,” Kendall wrote. “Comparing plaintiffs’ complaints and the Lacey indictment, the court concludes that there is ‘clear connection between the events alleged in the indictment and events at issue’ in these cases.”
Tommy Fibich, founding partner of Fibich, Leebron, Copeland & Briggs in Houston, who represents the plaintiff identified as G.G. in court records, told Law.com that he is disappointed in the court’s decision to stay the case. The consolidated cases were supposed to go to trial in September, which Fibich said he believes was likely a deciding factor for attempting to delay the case.
“It took me a long time [Tuesday] to find the words to call and tell her that we weren’t going to be able to go to trial this year and how disappointed I was for her,” Fibich said. “All I can say is right now, I am sad, but tomorrow I’m going to be mad. When I get mad, I’m going to have my crosshairs set on Salesforce, and they are not going to get away. This is just a delay.”
He said the decision is only a minor setback as he remains focused on holding Salesforce accountable and getting justice for the women affected in this case.
Backpage was created in 2004 and began working with Salesforce in November 2013. It regularly sought and received technical support from Salesforce’s team over the next five years, and the companies continued their business relationship until the federal government shut down Backpage in April 2018 as a multiagency enforcement action. The U.S. Department of Just brought federal criminal charges against Lacey and other defendants in the U.S. District Court for the District of Arizona alleging they knew Backpage was used for prostitution and sex trafficking.
Lacey was found guilty of international concealment of money laundering in November 2023. His appeal to the Ninth Circuit is pending, and Kendall’s opinion also indicated the DOJ could retry Lacey on other criminal charges that previously ended in a mistrial following his appeal.
G.G. was advertised as an escort on Backpage at age 13 and brought her claims against Salesforce under the “participant liability” civil remedy in Section 1595 of the TVPRA. She argued Salesforce’s customized software and business support helped Backpage’s growth and also benefited the software company.
Salesforce has denied these accusations, claiming its support was limited to acting as a software vendor and saying it did not actively play a role in the sex trafficking occurring on the site.
G.G.’s case against Salesforce has gone through multiple phases since she filed her claims in the federal court in Chicago in March 2020. The U.S. Court of Appeals for the Seventh Circuit reversed the dismissal of her suit and issued a precedential decision in October 2023, allowing her claims to continue. In January, Kendall denied Salesforce’s bid to escape the suit.
In Tuesday’s ruling, Kendall said Lacey’s case centers on Backpage’s alleged scheme to profit from prostitution and sex trafficking advertisements. The court said the statute does not require identical facts or the same individual traffickers, and that the fact that the civil and criminal cases arise from the same underlying trafficking scheme meets the statutory requirement. Kendall also rejected the plaintiff’s claims that they had to be named victims in the criminal case as long as their alleged victimization stems from the same occurrence or scheme.
Salesforce’s attorney, Bradley Hamburger, of Gibson Dunn & Crutcher, did not return Law.com’s request for comment.
