Craigslist CEO sues over SC’s prosecution threat

Craigslist, the advertising website in hot water over classified listings for prostitution, is striking back at criminal investigators in South Carolina -- even as seven New Yorkers were indicted on charges of running a prostitution ring through the site.

Chief Executive Jim Buckmaster said in a blog post Wednesday that the San Francisco company had sued South Carolina to block possible prosecution by Atty. Gen. Henry McMaster.

McMaster has been threatening to file charges against Craigslist if it didn’t take down all illicit sex ads, a demand Buckmaster said could have led to the closing of the entire site.

Buckmaster said the attorney general’s “repeated threats of criminal prosecution should we refuse to shut down Craigslist for South Carolina” violates constitutional free-speech rights of its executives and infringes on federal law that shields certain Internet companies from prosecution over user-generated content.

Pressured by state attorneys general after a masseuse who advertised on the site was killed, Craigslist last week made a series of changes to reduce the incidence of prostitution-related listings.

The company gave itself until Wednesday to phase out its controversial “erotic services” section and replace it with a new category where every ad would cost $10 to post and require approval from a human moderator.

But McMaster set a deadline of last Friday. Despite the site’s widely publicized cleanup plans, McMaster considered that Craigslist had violated his mandate and said he had “no alternative but to move forward with criminal investigation and potential prosecution.”

Responding to the Craigslist lawsuit, filed Wednesday in U.S. District Court in Charleston, S.C., McMaster acknowledged the removal of the erotic services section and noted that Craigslist “is now taking responsibility for the content of their future advertisements.”

A McMaster spokesman later said, however, that the office was not withdrawing its threats of legal action and that it would “monitor the website to ensure that the illegal content that has been removed does not appear again.”

The suit seeks a ruling that Craigslist is not liable for content posted on its site by third parties -- a legal argument the site and its defenders have repeated as scrutiny from state attorneys general intensified in recent weeks.

“It will force the clarity that they’ve been asking for and that the AGs have been denying them,” said Matt Zimmerman, a lawyer at the Electronic Frontier Foundation. If Craigslist wins the judgment, he said, “it makes it difficult for [the attorneys general] to continue that angle of attack.”

Craigslist lawyers and a spokeswoman declined to comment.

In New York, five of the seven residents accused of running a prostitution ring through Craigslist were arrested Wednesday on charges of corruption, conspiracy and money laundering.

The five pleaded not guilty at their arraignment at state Supreme Court in Queens, where authorities say the operation was based. The search for the remaining two suspects was continuing.

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david.sarno@latimes.com

Bloomberg News was used in compiling this report.