9th and 7th Circuits on Service Provider Responsibility for Fair Housing Ads under Section 230 - CDA

Fair Housing Council of San Fernando Valley v. Roommate.com: Roommate.com, LLC, operated an Internet roommate locator service. The website allowed users to post information on available housing on a searchable database. Roommate’s terms of service said authors are responsible for content, but users created a profile by selecting options, including age, gender, sexual orientation, and number of children. Some users picked nicknames indicating race, religious identity, or preferences on race, gender or sexual orientation.

The Fair Housing Councils of San Fernando Valley and San Diego filed a complaint with U.S. District Court for the Central District of California alleging that Roommate violated state and federal fair housing laws for making and publishing discriminatory statements indicating preference on race, religion, national origin, gender, familial status, age, sexual orientation, source of income, and disability. Roommate sought summary judgment that it was immune from suit for publication of third party content under section 230 of the Communications Decency Act (CDA), which provides: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Alternatively, Roommate said the claims were barred by the First Amendment.

On September 30, 2004, the district court ruled that Section 230 shielded Roommate from liability for third-party content and declined to reach the First Amendment question. The court said websites “unlike newspapers, are exempt from 42 U.S.C. section 3604(c) and the related state fair housing laws for publishers […] Congress decided not to treat [interactive service providers] like other information providers such as newspapers, magazines or television and radio stations, all of which may be held liable for publishing or distributing obscene or defamatory material written or prepared by others.” On October 29, 2004, the fair housing councils appealed to the U.S. Court of Appeals for the Ninth Circuit. On that appeal, NAA declined to join a draft amicus brief on behalf of roommate proposing that the Fair Housing statute was unconstitutional. On May 15, 2007, a three-judge panel of the Ninth Circuit held that Roommate was not eligible for CDA immunity and could be held liable because it solicited information through menus or templates that invited users to state preferences as to gender, sexual orientation and children. The court returned the case to the trial court to determine whether Roommate violated the Act.

On June 4, 2007, Roommate.com filed a petition for rehearing en banc in the Ninth Circuit. Roommate asserted that the three-judge panel erred by adopting a rule making “selective collection and distribution of” user-created content “the speech of an automated interactive computer service,” and asked the court to address “whether the constitutional right of intimate association and the First Amendment preclude liability under the Fair Housing Act…for the publication of information about potential cohabitants.” The Fair Housing Council responded on July 5. On October 12, 2007, the U.S. Court of Appeals for the Ninth Circuit granted the petition for rehearing en banc.

On November 5, 2007, NAA joined an amicus curiae brief by news organizations in support of roommate.com. The brief urged the court to reaffirm that Section 230 protects internet publishers who select, post, organize and edit third-party content, and who are more than mere conduits for such content. The brief noted that online news media increasingly rely on content supplied by third parties, and asked the court not to restrict immunity even where that content is obtained through newsgathering activities or otherwise solicited. The en banc reargument was conducted on December 12, 2007.

On April 3, 2008, the U.S. Court of Appeals for the Ninth Circuit issued its opinion in Roommates. Reviewing facts in the light most favorable to the plaintiffs from the order granting summary judgment, the appeals court emphasized that, in order to search or post housing, users must create a profile answering questions on gender, sexual orientation and parental status. Section 230 (c) immunity applies only if the interactive computer service provider is not also an “information content provider,” defined as one “responsible, in whole or in part, for the creation or development of” the content, the court said. Reviewing the legislative history, the court said Section 230 was prompted by Stratton Oakmont, Inc. v. Prodigy Services Co., 1995 WL 3237 10 (N.Y. Sup. Ct. May 24, 1995), a defamation case holding an internet service provider liable as publisher where it actively reviewed third-party content and deleted for offensiveness or bad taste, on the theory that such editing made it akin to a newspaper publisher. Congress, “sought to immunize the removal of user-generated content, not the creation of content,” this court said, because the House Report that accompanied the Act said its protection is for “actions to restrict” objectionable content, and is meant to avoid classifying service providers as publishers simply “because they have restricted access to objectionable material (emphasis added by the court).

Here, because Roommate created the questions and answer choices, it raised “at least a plausible claim” that it violated the Act: If such questions are unlawful face-to-face or by telephone, “they don’t magically become lawful when asked electronically online.” Roommate lacked immunity not only because its questions may violate the Act, but also because it may cause subscribers to indicate illegal preferences, but it develops and displays them; steers users away from incompatible listings; and notifies users of postings matching their preferences. Every profile page was “a collaborative effort between Roommate and the subscriber.” Roommate’s search engine differed from such “generic” ones as Google and Yahoo because it was “allegedly…designed to make it more difficult or impossible for individuals with certain protected characteristics to find housing,” this court said. A website helps to develop unlawful content, and thus lacks Section 230 immunity, if it “contributes materially to the alleged illegality of the conduct.” The court remanded to the district court to determine if the alleged actions, for which Roommate was not immune, in fact violated the Fair Housing Act.

Lawyers’ Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc.: NAA declined participation in an amicus curiae brief filed in June 2006 by Internet service providers in the craigslist case.

In February 2006, a Chicago civil rights group filed a complaint against Craigslist, Inc., alleging that the Craigslist website published classified ads for housing sales and rentals that indicated preference or discrimination based on race, color, religion, sex, familial status or national origin, in violation of the federal Fair Housing Act, 42 U.S.C. § 3604(c). The complaint, which sought declaratory and injunctive relief, and compensatory and punitive damages, cited specific ads containing preferences or allegedly discriminatory statements. The complaint charged the online ads discouraged home-seekers in protected classes and reduced units available to them; undermined educational efforts by misinforming home-seekers as to what is and is not illegal with the possible “effect of sanctioning and normalizing discrimination”; and through an anonymous email system made it difficult or impossible to contact and educate prospective tenants and landlords whose ads were published. The complaint described the website’s system of links, ad categories, contact emails, and account log-ins.

On June 22, 2006, an amicus brief was filed on behalf of Amazon.com, Inc., AOL LLC, eBay Inc., Google Inc., Yahoo! Inc., Electronic Frontier Foundation, Internet Commerce Coalition, Netchoice, NetCoalition, and the U.S. Internet Service Provider Association. NAA declined participation in the brief. The brief highlighted “whether providers of interactive computer services may be held liable for allegedly harmful content that is made available through such a service but that originated with someone else,” citing case law that 47 U.S.C. § 230(c)(1) provided interactive computer service providers with immunity from claims based on third-party content. The brief argued that Section 230 promotes continued development of interactive computer services; and removes disincentives to self-regulation. The brief cited examples of means provided by online service providers for reporting complaints about content. Amici argued that Congress intended Section 230 “to encourage the unfettered and unregulated development of free speech on the Internet,” citing Batzel v. Smith, 333 F.3d 1018 (9^th Cir. 2003). Observing that “newspapers can and generally do screen the content of advertising and other third-party content that they publish,” the amicus brief disputed the plaintiffs’ argument “that there is no difference between traditional and new media in terms of the ability to screen harmful information, and that online media should be subject to the same burdens as traditional media.” The “key difference,” stated amici, is that rather than operating as a centralized “publisher,” interactive services “make it possible for millions of users to publish material online directly – and often simultaneously.”

On November 14, 2006, the U.S. District Court for the Northern District of Illinois granted Craigslist's motion to dismiss. The court began by discussing case law on interactive computer service (ICS) immunity for third-party content regardless of editing or selection. Congress did not intend “vast, limitless immunity” in Section 230(c), but meant to overrule Stratton Oakmont, Inc. v. Prodigy Services Co. , 1995 WL 3237 10 (N.Y. Sup. Ct. May 24, 1995), a defamation case holding internet service providers liable as publisher where they actively reviewed third-party content and deleted on the basis of offensiveness or bad taste. The district court said Section 230 does not bar every cause of action, but bars those that require treating an ICS as “publisher” of third-party content. In other words, because Section 230 prohibits treatment as a “publisher” where the information is provided by another, it thereby bars liability that depends on a finding that the computer service “published” the third party content. One such liability barred is under the fair housing provision in 42 U.S.C. § 3604(c) that renders it illegal to publish discriminatory ads, the district court concluded. On January 10, 2007, the district court denied a motion for reconsideration filed by the Chicago Lawyers’ Committee for Civil Rights. On January 11, 2007, the civil rights group appealed to the U.S. Court of Appeals for the Seventh Circuit.

On March 14, 2008, the Seventh Circuit dismissed the lawsuit. The court said online services “are in some respects like the classified pages of newspapers, but in others they operate like common carriers such as telephone services” which neither make nor publish discriminatory communications “that may pass over their networks,” just as courier services such as FedEx and UPS “do not read the documents inside packages.” Websites are not common carriers, “but screening, though lawful, is hard” because sites cannot filter words or phrases that may have innocuous meanings. Vetting postings would cause delay and expense to a system with more than 30 million postings a month currently run by fewer than 30 people, the appeals court found.

The court reviewed jurisprudence on “Good Samaritan” blocking and screening of offensive material under Section 230(c). Citing Doe v. GTE Corp., 347 F.3d 655 (7^th Cir. 2003), the court said this provision does not provide wholesale immunity from civil liability for website operators and it is not intended to induce ISPs to do nothing about distribution of indecent and offensive material. The decision in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) is “incompatible with treating § 230(c)(1) as a grant of comprehensive immunity from civil liability for content provided by a third party,” because service providers may be liable for contributory infringement if their system “is designed to help people steal music or other material in copyright.” Rather, the court suggested, Section 230(c)(1) has a limited role, to foreclose liability that depends on publisher status, so that “a natural reading” of it together with the fair housing statute in 42 U.S.C. § 3604(c) had led the district court to grant summary judgment for craigslist. The question was not whether Congress had fair housing laws in mind when it passed Section 230, but whether it excluded those laws from the scope of Section 230. The fact that craigslist offers a forum for speech does not “cause” discriminatory statements any more than banks cause bank robberies. In the view of the Seventh Circuit, the Lawyers’ Committee may identify landlords who discriminate “but it cannot sue the messenger just because the message reveals a third party’s plan to engage in unlawful discrimination.”

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