Visa Must Face Lawsuit from Sex Trafficking Survivor, Judge Rules

A lawsuit against Visa brought by a sex trafficking survivor will be allowed to move forward after a federal judge rejected significant portions of the credit card company’s motion to dismiss themselves from the case. In rejecting Visa’s attempt to avoid going to court, the judge ruled that there was enough evidence showing that the company “knowingly provid[ed] the tool used to complete the crime” of distributing child sexual abuse material to warrant the survivor’s lawsuit against Visa being heard in court. 

It is important to note that, although this is not a ruling on Visa’s guilt, the landmark decision by the judge to allow the lawsuit to proceed could well mean greater accountability for the financial service industry for roles played in enabling and profiting from sexual exploitation and abuse. 

To help unpack what this important ruling means, we asked a member of the NCOSE Law Center, senior legal counsel Dani Pinter, to explain some of the nuances. 

Question: What does this ruling mean for the sex trafficking lawsuit against Visa?

AnswerThe judge’s Order says that the Plaintiff’s (Serena Fleites) claims, at least on their face, are sufficient for the case to move forward to Discovery (the fact-finding stage in preparation for trial). The Plaintiff will still need to prove her case, but now she has the right to compel at least one of the Defendants—Visa—to provide documents, testimony, etc that she requests which are relevant to proving her case.

This Order was in response to a motion to dismiss filed by Visa. Had the court fully granted the motion, the case would have been tossed out and not had its day in court at all. Instead, the court granted it in part and dismissed it in part. This means that, although some of the Plaintiff’s claims are allowed to move forward, some of the Plaintiff’s claims were also dismissed. Some of the claims were dismissed with prejudice (meaning the decision is final and can’t be appealed), but others were dismissed without prejudice which means the Plaintiff has the option to file an amended complaint with additional facts and have another opportunity for the court to review them.

Question: Does this ruling impact the portion of the lawsuit that has MindGeek (a.k.a. Pornhub) as a defendant?

Answer: It’s important to note that the Plaintiff also sued MindGeek as a part of this same case and that the judge has not yet ruled on MindGeek’s motion to dismiss. That has been on pause while the parties conduct something known as “jurisdictional discovery.”

Jurisdictional Discovery is a process by which the Plaintiff can investigate ownership and location of the MindGeek entities with the Court’s authority to compel MindGeek to respond to the Plaintiff’s inquiries, requests for documentation, etc. The purpose is to determine which persons and entities are truly in control, have ownership, funds, and determine where they are located and how they are connected to the United States. This is a somewhat technical legal issue but it is significant because there is a preponderance of evidence that MindGeek maintains shell companies and subsidiaries in order to make it difficult to ascertain true ownership. Jurisdictional discovery will get to the bottom of who is ultimately responsible. 

Mindgeek Pornhub Lawsuit
Did you know that the NCOSE Law Center has its own lawsuit filed against MindGeek (Pornhub’s parent company)? Learn more about the case as well as ways you can get involved in efforts to bring justice and accountability.

So, this Order only addresses Visa but the Court did say this: “The Court recognizes that the MindGeek Defendants’ motions are not before it, (see Dkt. 167), and the Court does not intend for its analysis in this order to serve as a ruling on the MindGeek Defendants’ motions to dismiss. Still, this order should be a highly relevant signal to the MindGeek Defendants as to how the Court views many of their attacks and challenges to Plaintiff’s complaint.”

Question: What has NCOSE done about Visa’s ties to sexual exploitation?

Answer: The National Center on Sexual Exploitation first brought evidence of child sexual abuse material and sex trafficking on Pornhub to Visa’s attention in early 2020 and sent a letter with 62 survivors and advocates representing 11 countries in March 2021 requesting it cut ties with all MindGeek-owned entities. Despite the fact that Visa opened an investigation into Pornhub at NCOSE’s urging, it wasn’t until the New York Times published its December 2020 exposé revealing child sexual abuse material proliferates on the site that Visa finally acted to cut ties with Pornhub. Furthermore, Visa has repeatedly refused to meet with survivors. The ongoing issues with Visa led to their inclusion on our Dirty Dozen List

Question: What can I do about Visa’s connection to sex trafficking and child sexual abuse material crimes?

Answer: Great question! We encourage everyone reading this to take just 30 seconds and complete this easy-to-use action that will send emails directly to officials at Visa calling on them to stop doing business with the commercial sex industry.

Question: Can you give more detail about which of the sex trafficking survivor’s claims were allowed to move forward against Visa and which were dismissed? 

Answer: Definitely! There is quite a bit to dig into, so buckle up.

  • Article III Standing: Court held the Plaintiff does have Article III standing to sue Visa.
    • What does this mean? Visa claimed that it was too far removed from what happened to the Plaintiff to be held responsible, that the harm could not be directly “traced” to Visa and its actions. The Court disagreed and found there was a direct line from the Plaintiff to MindGeek to Visa.
    • Quotes
      • Visa’s argument: 
        • Visa insists that the involvement of “numerous third parties whose independent decisions collectively ha[d] a significant effect on [P]laintiffs’ injuries” in this case forecloses a finding that Plaintiff has standing to sue Visa” – pages 9-10
      • Court’s ruling:
        • “Plaintiff is suing MindGeek for—again in the words of section 1591—“benefit[ting] financially” from the child porn featuring Plaintiff, knowing or in reckless disregard of the fact that Plaintiff was a minor when such videos were produced, in violation of section 1591(a)(2). That is where Visa enters the picture in full view, unobscured by the third parties that it attempts to place between itself and Plaintiff. emotional trauma that Plaintiff suffered flows directly from MindGeek’s monetization of her videos and the steps that MindGeek took to maximize that monetization. . . . Plaintiff claims that MindGeek did these things for money, and Visa knowingly offered up its payment network so that MindGeek could satisfy that goal.” -pages 10-11
        • “Plaintiff alleges that Visa pushed the first domino when it continued to recognize MindGeek as a merchant with knowledge of its illicit nature.” – page 11 [emphasis added]
        • If Visa was aware that there was a substantial amount of child porn on MindGeek’s sites, which the Court must accept as true at this stage of the proceedings, then it was aware that it was processing the monetization of child porn, moving money from advertisers to MindGeek for advertisements playing alongside child porn like Plaintiff’s videos. And so, after opening the door, Visa was there at the end of the line, too, performing the final act necessary to establish Plaintiff’s section 1591(a)(2) claim against MindGeek: the movement of money.” – page 11-12
        • Visa is also alleged to have far more control over MindGeek than Visa’s motion would suggest. . . . Visa suspended MindGeek’s merchant privileges, which led MindGeek to remove 10 million of its videos, or a staggering 80% of its content. . . . Visa quite literally did force MindGeek to operate differently, and markedly so, at least for a time. And the astonishingly strong response from MindGeek—who is otherwise alleged to stonewall and even harass victims—is consistent with Plaintiff’s allegations that unnamed former MindGeek employees have explained that MindGeek constantly worries that Visa could cut it off and makes decisions based on what content the “major credit card companies are willing to work with.” – pg 12
        • “When MindGeek crosses the line, or at least when MindGeek is very publicly admonished for crossing the line, Visa cracks the whip and MindGeek responds vigorously. Yet, here is Visa, standing at and controlling the valve, insisting that it cannot be blamed for the water spill because someone else is wielding the hose.” 
        • “In an argument reminiscent of the ‘too big to fail’ refrain from the financial industry in the 2008 financial crisis, Visa argues that ‘[i]f accepted, Plaintiff’s theory would upend the financial and payment industries.’ (Mem. at 9.) The Court does not see this decision as the drastic tectonic shift that Visa fears. But the Court will make the gist of its holding clear, to assuage any such fear: Visa is being kept in this case because it is alleged to have continued to recognize as a merchant an immense, well known, and highly visible business that it knew used its websites to host and monetize child porn.” – page 15 [emphasis added]
        • Moreover, Visa allegedly had considerable sway over that business’ decision-making, a conclusion amply supported by the allegation that MindGeek removed 80% of its content when Visa suspended its business with MindGeek. Visa is not being asked to police ‘the billions of individual transactions it processes each year.’ (Mem. at 9.) It is simply being asked to refrain from offering the tool with which a known alleged criminal entity performs its crimes. That is not a tall order and does not spell out an existential threat to the financial industry. – page 16 [emphasis added]
  • Financially Benefitted from Sex trafficking under 1591(a)(2): Plaintiff has failed to state a claim under this theory and the court dismissed this claim with prejudice.
    • What does this mean? The Court found that the knowledge requirement was not met for Visa to have been knowingly (“knew or should have known”) benefitting from the Plaintiff’s sex trafficking specificallybecause there are no allegations that Visa knew about her video in particular, her age, etc. 
      • In nutshell, the Court held that Visa was not involved in direct interaction with users or videos so there are no additional facts that the Plaintiff could allege to the meet the knowledge standard under 1591(a)(2) – financially benefitting. That’s why the court dismissed with prejudice and would not allow the plaintiff to amend on this issue.
  • Conspiracy claim under 18 USC 1594(c): Plaintiff has sufficiently pled that “Visa conspired with MindGeek to violate section 1591(a)(2).” 
    • What does this mean? Although the Court found that Plaintiff had not shown Visa itself knowingly financially benefitted from Plaintiff’s sex trafficking, it found that Plaintiff had pled enough to establish a claim against MindGeek for financially benefitting from her trafficking and that Visa was a co-conspirator. (This is tricky because the Court hasn’t officially made this ruling as to MindGeek but in this motion essentially said there’s enough here against MindGeek and Visa together to plausibly allege Visa was a co-conspirator with MindGeek to violate the TVPRA.)
      • “The Court finds that Plaintiff has stated a conspiracy claim against Visa pursuant to section 1594(c) but fails to state a claim against Visa for beneficiary liability pursuant to section 1591(a)(2), though as a co-conspirator, Visa might be held liable for MindGeek’s alleged violation of section 1591(a)(2).” – page 21
        • “One conspirator is liable for the acts of its co- conspirator when such acts are in furtherance of the conspiracy, see Pinkerton v. United States, 328 U.S. 640, 647 (1946), even if the conspirator ‘is unaware of the existence of the acts or the actors[,]’ United States v. Testa, 548 F.2d 847, 855 (9th Cir. 1977), so long as the acts are the ‘necessary or natural consequence’ of the conspiracy, United States v. Fonseca-Caro, 114 F.3d 906, 908 (9th Cir. 1997). 
    • Quotes
      • “If a conspiracy is adequately pled, Visa can bear liability for MindGeek’s section 1591(a)(2) violation if such crime was committed in furtherance of and a natural consequence of the conspiracy, regardless of whether Visa knew of or interacted with Plaintiff or her primary traffickers.” – page 23
      • “Plaintiff adequately alleges that Visa knew that MindGeek’s websites were teeming with monetized child porn from its own due diligence and discussions and negotiations with MindGeek, PayPal’s decision to cease doing business with MindGeek, communications from advocates with which Visa interacted, and from the New York Times article. (See Section II.C., supra.) Despite this alleged knowledge, Plaintiff asserts that Visa ‘explicitly agreed with MindGeek to process the financial transactions from which the defendants profited from the [sex trafficking] venture.’ Through Plaintiff’s entire ordeal and to this day, Visa processes advertisement payments on MindGeek’s sites. (FAC ¶ 275.)” – page 23 
      • “If Visa knew MindGeek’s sites contained a wealth of child porn and that MindGeek regularly placed ads alongside its videos, facts that are either expressly alleged or clearly implied in the FAC, then it knew that MindGeek was regularly committing violations of section 1591(a)(2) by participating in hundreds or thousands of sex trafficking ventures and financially benefiting from such participation. With such knowledge, Visa continued to grant MindGeek the means to financially benefit from its participation in sex trafficking ventures: the Visa payment network. – pages 23-24
      • “It does not matter that Visa did not know who the eventual victims or primary traffickers would be or whether Visa interacted with or knew of Plaintiff, her videos, or her traffickers. MindGeek’s violation of section 1591(a)(2), and Plaintiff’s resulting harm, were natural consequences of Visa’s alleged knowing decision to provide the means through which MindGeek could monetize child porn videos, like those featuring Plaintiff.” – page 24 
      • “Put yet another way, Visa is not alleged to have simply created an incentive to commit a crime, it is alleged to have knowingly provided the tool used to complete a crime.” – page 25 [emphasis added]
  • Standing under the TVPRA: Plaintiff does have standing under the TVPA to sue Visa
    • What does this mean? “Visa argues that its conduct was not the proximate cause of Plaintiff’s injuries. The above analysis—of both Article III standing and Visa’s alleged TVPRA violation— should make clear that Visa’s argument is unpersuasive to the Court at this stage of the case.” – page 26 
    •  Quotes
      • “When MindGeek decides to monetize child porn, and Visa decides to continue to allow its payment network to be used for that goal despite knowledge of MindGeek’s monetization of child porn, it is entirely foreseeable that victims of child porn like Plaintiff will suffer the harms that Plaintiff alleges.” – page 26 

Additional Notable Quotes from the Judge’s Ruling Rejecting Visa’s Motion to Dismiss

  • “Plaintiff alleges that Visa obtained knowledge of MindGeek’s child porn problem from various sources. First, Plaintiff alleges that Visa performed reviews of MindGeek’s sites pursuant to its own ‘due diligence and compliance functions.’ (See, e.g.id. ¶ 278.) Plaintiff alleges that Visa was further put on notice from its ‘discussions and negotiations about these issues with MindGeek itself.’ (Id. ¶ 283.) Further, in November 2019, Visa’s competitor PayPal terminated its relationship with MindGeek, issuing a public statement that ‘[PayPal] explicitly prohibits the use of [its] services for the sale of materials that depict criminal behavior[.]’ (Id. ¶ 286.) Visa also landed on a list maintained by anti-trafficking advocates for processing payments for ‘pornography websites, including those hosting content fetishizing minors[.]’ (Id. ¶ 288.) Visa responded with a statement that it only permits transactions for the purchase or sale of lawful products or services. (Id. ¶ 289.) Anti-sex trafficking advocates also sent various letters and emails to Visa detailing MindGeek’s child trafficking venture. (Id. ¶¶ 291- 95.) Visa responded: ‘Maintaining a neutral stance under the law is vital for the free flow of commerce.’ (Id. ¶ 297.)” – page 8
  • “Plaintiff alleges that Visa pushed the first domino when it continued to recognize MindGeek as a merchant with knowledge of its illicit nature. With that decision—which Visa and Visa alone controlled—in place, the means to profit from child porn was ensured, and MindGeek filled in the gaps to seize the opportunity, promulgating the profit-maximizing policies and practices described above that so damaged Plaintiff’s life. Visa lent to MindGeek a much-needed tool—its payment network—with the alleged knowledge that there was a wealth of monetized child porn on MindGeek’s websites.”  – page 11

Question: Can I read the full ruling from the judge about Visa’s potential connections to/profiting from sex trafficking anywhere online?

Answer: Absolutely! We encourage you to read the ruling for yourself here: https://pershingsquarefoundation.org/wp-content/uploads/2022/07/031138281455.pdf

The Numbers

300+

NCOSE leads the Coalition to End Sexual Exploitation with over 300 member organizations.

100+

The National Center on Sexual Exploitation has had over 100 policy victories since 2010. Each victory promotes human dignity above exploitation.

93

NCOSE’s activism campaigns and victories have made headlines around the globe. Averaging 93 mentions per week by media outlets and shows such as Today, CNN, The New York Times, BBC News, USA Today, Fox News and more.

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