A gay sex Web site has filed a lawsuit against PayPal, an intermediary for money transactions on the Net, after the financial giant dropped the adult site -- even though it only used PayPal to process donations for Hurricane Katrina victims.
What rankled Paypal is that CFS.com, which stands for CruisingforSex, has chat rooms, personals and listings of "cruising spots" for men to hook up with other men. It also contains numerous photos of nude men and has advertisers that sell gay porn and sex toys. For PayPal, the adult site's content violated its policy against "the purchase or sale of, or receipt of donations for, any obscene or sexually oriented goods or services."
"PayPal does not permit our services to be used on adult Web sites, and when the PayPal buttons were on this Web site, they were on pages that had adult services," Sara Bettencourt, a company spokeswoman, told the San Jose Mercury News.
However, Keith Griffith, founder of New Orleans-based CFS, said he was using PayPal only to collect donations for two employees who were victims of Hurricane Katrina, not to sell porn or sex toys.
"We are not trying to get them to change their terms of use or make an exception because of the hurricane," Griffith told PlanetOut Network. "We just went them to enforce their own policy. The only thing we are not allowed to do is use them to sell obscene merchandise. Last time I checked, helping someone pay the mortgage or buy groceries was not obscene."
The lawsuit claims CFS supporters were thwarted when they wanted to help the hurricane survivors. Specifically CFS sought to aid two of its employees who fled the area when Katrina hit and "sustained serious, virtually incalculable losses due to the tragedy," according to the lawsuit. Regular visitors to the site gave about $2,000 to the employees -- Dorian-Gray Alexander and Troy (no last name given) -- before PayPal pulled the plug.
Griffith pointed out that this is not his company's first run-in with PayPal, which first cut off CFS from accepting general donations for the site when it was acquired by eBay.
"eBay decided the company shouldn't have anything to do with adult content, which is ironic since eBay has a substantial adult component to their auction site," Griffith said.
Last Friday Griffith filed suit in Santa Clara County (Calif.) Superior Court, where PayPal is headquartered. CFS is demanding PayPal restore its service, claiming it has a near-monopoly on the Internet. It also wants damages.
According to Will Doherty, executive director of Online Policy Group, the suit rests in a legal gray area. "My guess is that (CFS) will not succeed," he told the Planetout Network. "PayPal's terms of service show they want to stay away from adult sites in general. But are they refusing a whole class of customers because of queer content? I'm not sure that can be proven."
Even if PayPal's actions are not illegal, they are objectionable, Doherty said. "Financial institutions should be neutral regarding a client's business. Even if the company's activity is illegal, it's up to the government to prosecute."
"I have no reason to believe PayPal is homophobic," he said. "It so happens that the visitors to the site are gay men, but this is not a gay issue. It's just an issue of an uncaring, unthinking, large bureaucracy. I guess it never occurred to them that an adult site might want to use their services for something non-adult."
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