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Real Estate & Property Law

: Real Estate, Real Competition & The Law

Seventh Circuit considers whether Section 230 protects Craigslist from Fair Housing Act claims

By MICHAEL H. ERDMAN

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Last Friday the U.S. Court of Appeals for the Seventh Circuit, based here in Chicago, heard oral arguments in the plaintiff?s appeal of Chicago Lawyers? Committee for Civil Rights Under Law, Inc. (?CLC?) v. Craigslist Inc. (?Craigslist?). CLC, as you may recall, is appealing Judge St. Eve?s rulings that Section 230 protects Craigslist from liability for housing ads placed on the site by third parties that allegedly violated the federal Fair Housing Act ("FHA"). The case, the last one scheduled for the week, was clearly the most popular one of the day, with at least forty people in attendance in the gallery (none of whom left early notwithstanding an ominous, overhead announcement that interrupted the arguments, advising that a fire had been reported in another part of the twenty-seven story building, but that an evacuation was unnecessary). It apparently was a false alarm, but given I arguably risked my life to hear the arguments in their entirety, which took place on the 27th floor mind you, please show me some love and let me know where you think this case is headed (and/or if you think I'm a moron for sticking around to the end).


The three judge panel consisted of Judges Frank H. Easterbrook, Diane P. Wood and Terence T. Evans. You may recall that both Judges Easterbrook and Wood were on the panel that heard Doe v. GTE Corp. in 2003, the only other Section 230 case argued before the Seventh Circuit. Attorney Stephen D. Libowsky argued on behalf of CLC, and Attorney Patrick Carome argued on behalf of Craigslist. Each attorney was allotted fifteen minutes (with appellant CLC going first), and CLC?s counsel was offered an additional one minute for rebuttal. Of course the case was fully briefed before Friday's arguments.

Judge Wood didn?t waste any time. Sure, Congress, when it enacted Section 230, did not want online services to be penalized for filtering objectionable content. But does it follow, she asked, that Congress wanted to make life more difficult for online services that do not employ blocking technologies? She asked CLC?s counsel why is it that a service that takes a neutral position regarding filtering is subject to liability?

CLC's counsel's response seemed to be that, like it or not, this is what the statute provides. In some cases where an online service employs filtering, it may be immune pursuant to 230(c)(2). But if such immunity does not apply, there is no protection for the online service under Section 230. In other words, CLC?s position seems to be that Section 230(c)(1) does not offer any protection for an online service that does not employ any filtering mechanisms. This of course flies in the face of over a dozen federal appellate decisions ruling to the contrary.

Judge Easterbrook - who wrote the court's opinion in Doe v. GTE, which was heavy on dictum and suggested that Section 230(c)(1) indeed may only be definitional and not substantive - followed up, asking whether liability here boils down to whether Craigslist is a publisher (in other words, if it?s a publisher, it cannot be liable, and if it isn?t a publisher, it may be liable, under the FHA). CLC?s counsel disagreed, asserting that under the FHA all Craigslist has to be is a ?causer? of certain prohibited conduct. Judge Easterbrook acknowledged cases where newspapers were found liable (presumably under the FHA), such papers being the publishers of certain materials. But CLC's counsel countered that those courts did not specify the basis for liability, and that in one case the court referred to a newspaper as having ?carried? an ad. CLC's counsel acknowledged, however, that such phrase does not appear in the FHA.

Judge Easterbrook noted that Section 230(c)(1) is not, contrary to what other courts have held, an immunity provision (technically it?s hard to argue with him given the paragraph makes no express reference to immunity). Instead (c)(1) is saying that an ISP is not a publisher in some cases. This left me with the impression, when factoring in his line of questioning, that Judge Easterbrook may have had a partial change of heart since he wrote Doe v. GTE Corp., wherein he suggested in dictum that (c)(1) may just be definitional and a lead-in to the immunity provision contained in paragraph (2). Now he seems to be saying that (c)(1) can do some real work (not immunization, mind you). If I had to guess, if CLC, to prove a violation of the FHA, must show that Craigslist published a discriminatory ad, Judge Easterbrook would likely conclude that Section 230(c)(1) shields Craigslist from liability. But he probably wouldn't use the word "immunize."

Judge Evans then joined the discussion, asking how could Craigslist, with its 30 million posts per month and 30 employees, possibly be expected to filter each posting. He quickly dismissed CLC?s counsel?s comparison to the responsibility of newspapers, again emphasizing the massive number of postings made on Craigslist. He seemed to disregard CLC?s counsel?s assertions that Craigslist has essentially conceded that filtering is possible, given its purported efforts in this area to date, and that Craigslist could reduce the occurrence of inappropriate ads by employing dropdown menus (for example (mine), one could choose to exclude smokers, but would have no way to indicate a desire to exclude minorities, because that wouldn't be among the dropdown choices).

Judge Easterbrook similarly did not buy the filtering argument. He offered an example of someone looking to rent out an apartment located near a Buddhist church. Should Craigslist prevent that person from using the word ?Buddhist? in describing nearby landmarks, because the term could also be used in a discriminatory fashion? Of course such filtering is technically possible, but does the FHA require Craigslist to do so?

CLC?s counsel's response was that (c)(1) is not absolute, and that it must be read in conjunction with (c)(2). By that I think CLC is saying that Craigslist ? as a carrier or ?causer? ? is beyond the scope of (c)(1) protection, and that (c)(2) immunity is not available here because Craigslist did not filter, or attempt to filter, the allegedly discriminatory ads. CLC's counsel also referred to Doe v. GTE, seemingly hoping Judge Easterbrook would stand by his suggestions therein that (c)(1) does not in and of itself offer any protection, and that the alternative reading would "gut" (c)(2). From my vantage point I did not get the impression that any of the panelists accepted these arguments.

Next up was Craigslist?s counsel. He directed the panel?s attention to Congressional committee reports prepared in connection with the 2002 Dot Kids statute which expressed approval for the federal courts' interpretation of Section 230 to date, citing the Zeran decision in particular.

Judge Easterbrook again asked whether there was any way that Craigslist could be liable if it could not be treated as a publisher. Craigslist?s counsel responded, of course, in the negative. Pressing the issue, Judge Easterbrook returned to the newspaper cases, asking whether the website could somehow be held liable as a carrier. Judge Easterbrook offered the hypothetical of a phone bank being employed to put out discriminatory messages. Would the phone company be liable in such a case for FHA violations? To my surprise, Craigslist?s counsel responded ?maybe.? Putting aside for the moment whether it's appropriate to compare carrier cases to ISP (or, more properly, Interactive Computer Service) cases, I have a hard time conjuring up a scenario where AT&T would be liable for a third party's use of its phone lines to make calls spewing discriminatory statements.

My overall take? Judge Evans didn?t say much, but what he did volunteer was favorable to Craigslist. Based upon her articulated understanding of the statute, Judge Wood also seems inclined to side with Craigslist. Last, but certainly not least, I?m thinking that Judge Easterbrook was not persuaded by CLC's arguments. However, and to his credit, he did demonstrate a willingness to consider an alternative basis for liability that would not implicate Section 230 protections. But I don't think CLC satisfied its burden in this regard.

I expect a unanimous ruling affirming Judge St. Eve?s decision that will relieve concerns website operators may have about some of the four year old dictum in Doe v. GTE. Your thoughts?

Click here to listen to the oral arguments yourself (QuickTime streaming).

Full post as published by Real Estate, Real Competition & The Law on February 18, 2008 (boomark / email).

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