Intellectual Property Law

Online Classifieds and their Liability under the U.S. Fair Housing Act

By Martha L. Arias

Internet law is definitely a 'legal melting pot.' Traditional statutes are now being applied to e-commerce models.  For instance, the anti-discrimination clauses of the United States ("US") Fair Housing Act ("FHA") have been examined in the case of online classifieds companies like Craigslist. And, a clause under the Communication Decency Act (applicable to explicit content) has been applied to this case.  Housing discrimination is illegal under the FHA and so is discriminatory housing advertising.  Craigslist is a US online publisher of classifieds.  Craigslist was sued by a group of Chicago Lawyers' Committee for Civil Rights who alleged Craigslist was liable under the FHA for publishing discriminatory housing advertising ("Ads") like, "No Minorities," "Requirements: Clean Godly Christian Male," etc.  The US District Court granted summary judgment for Craigslist and the Civil Rights Attorneys appealed.  The US Court of Appeals for the 7th Circuit has rendered is final decision affirming the District Court"s ruling and providing precedential analysis of the FHA anti- discriminatory clause on online housing Ads.  This article briefs this land-marking decision.

Craigslist provides online classifieds services for those who want to advertise on buying, selling, or renting housing.  The site also publishes classifieds for the sale of goods and services.  Craigslist does not write the Ads; they are provided by those hiring the website services.

The Chicago Lawyers' Committee for Civil Rights filed a complaint against Craigslist.  The complaint claimed that Craigslist violated 42 U.S.C. §3604(c) which states that it is illegal "[t]o make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination."

The Chicago Lawyers Committee claimed that Craigslist violated the FHA anti-discriminatory clauses when Craigslist published Ads like: "No Children," "No Minorities," "Catholic Church and beautiful Buddhist Temple within one block," "Requirements: Clean Godly Christian Male," etc. 

In its analysis, the Court of Appeals stated that online classifieds services in some respects are like ?classified pages of a newspaper' but they also operate like common carriers such telephone services.  When online classifieds operate like common carriers, 42 U.S.C. §3604(c) does not apply to them because common carriers do not publish or make any discriminatory advertisement, text, or conversation that may pass through their networks.

The Chicago Lawyers Committee pointed that Craigslist should vet the postings to avoid discriminatory practices and violation of FHA.  The Court, following its theory on online classifieds being similar to common carriers, said just like FedEx cannot inspect and read the content of each package, it would be futile to force Craigslist to review every single Ad.  Besides, the Court added, reviewing the Ads (Craigslist publishes over 30 million Ads per month from 450 cities across US) would make the system less useful, slow, and more expensive.   The Court held that "online information system must not ?be treated as the publisher or speaker of any information provided by someone else."

Craigslist argued absolute immunity from publication of third party content under the Communications Decency Act, 47 U.S.C. §230(c) ("CDA").   After a lengthy and complex analysis on whether this provision of the CDA should be applicable to discriminatory Ads under the FHA, the Court held that CDA §230 does apply to Ads posted online.  This Court of Appeals held that while §230 does not provide absolute immunity to Craigslist as an online classifieds company, a plaintiff ?cannot sue the messenger just because the message reveals a third party's plan to engage in unlawful discrimination." Indeed, the Court pointed that the Chicago Lawyers Committee may elaborate a list with many targets to investigate for discriminatory treatment under FHA, but cannot make Craigslist liable for those Ads.    

Full post as published by IBLS Internet Law Blog on March 18, 2008 (boomark / email).