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Craig's List dodges a huge bullet from FHA law suit

By
Real Estate Broker/Owner with Highland Realty, Inc 0225 099336
 An Illinois federal court has considered whether a website which allowed users to post information about housing on the website could be liable as a publisher for postings which allegedly contained content that violated prohibitions contained in the federal Fair Housing Act (“FHA”).

Craigslist, Inc. (“Website”) operates a website which allows users to post information about jobs, items for sale, personals, and housing opportunities, among other things. The Website allows postings from both users who are either seeking or offering housing for sale or lease. The users communicate with each other if they are interested in the products or services being offered on the Website.

The Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. (“Committee”) is a nonprofit entity supported by a consortium of forty-five law firms. The Committee’s mission is to promote and protect civil rights, especially the civil rights of the poor, ethnic minorities, and the disadvantaged. One of the Committee’s interests is the elimination of discriminatory housing practices by providing education to consumers as well as offering free legal services to those who suffer from illegal housing discrimination.

The Committee filed a lawsuit against the Website for violations of the FHA. The lawsuit alleged that the Website publishes housing advertisements which exhibit a preference, limitation, or discrimination on the basis of race, color, national origin, sex, religion, and familial status. The FHA makes it illegal to “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.”

The Committee’s FHA claims related to the Website’s role as a publisher of the allegedly discriminatory statements on the Website. The Committee set forth numerous examples found on the Website in its lawsuit, including: “NO MINORITIES”; “looking for gay latino”; “LADIES PLEASE RENT FROM ME”; “Only Muslims apply”; and “Apt. too small for families with small children”. The Website filed a motion to dismiss the Committee’s lawsuit, arguing that the Communications Decency Act (“CDA”) bars the claims made by the Committee because it is a provider of interactive computer services.

The United States District Court for the Northern District of Illinois ruled that the Committee’s claims were barred by the CDA and so dismissed the lawsuit. The CDA contains a provision which states that “[n]o 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.” The CDA clarifies its effect on other laws by specifically exempting its effect on federal criminal laws, intellectual property laws, and certain federal privacy laws. The CDA does not mention the FHA.

The issue before the court was whether the Website qualified for the CDA’s protections. Courts have ruled that the CDA protects the operators of interactive computer services from liability for third-party content, including when the allegations involved violations of the FHA. The Committee argued that an earlier decision by the Seventh Circuit (the appellate court over this trial court) had suggested, in dicta, that the other courts considering the parameters of the CDA may have granted a wider immunity to the operators of interactive computer services then was intended by the statute. The Seventh Circuit suggested that Congress may not have intended the CDA to encourage the operative of interactive computer services to take no steps to protect the public from harmful content.

The court determined that the plain language of the statute protected operators of interactive services like the Website from all allegations which treated those entities as the publisher of third-party content. Since the Committee’s allegations treated the Website as a publisher of the postings on its which were provided by third-party users, the court ruled that the CDA shielded the Website from these allegations. Therefore, the court ruled in favor of the Website on the FHA claims and dismissed the lawsuit.

Chicago Lawyers' Committee For Civil Rights Under The Law, Inc. v. Craigslist, Inc., No. 06 C 0657, 2006 WL 3307439 (N.D. Ill. Nov. 14, 2006).
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert
Sounds like a good ruling to me, especially in an age where people are filing lawsuits against food providers because the coffee that they were served was to hot, or serving them food that makes them fat, and so on.  Lawsuits are even being filed against homeowners by crooks who have broken into their home and hurt themselves.  So for me I hope we see more decisions that use common sense in the future.
Dec 21, 2006 03:18 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Very interesting.  So, if a home owner can't get their agent to discriminate in rentals or sales, they can just publish in Craigs List.

Which might mean that newspapers could revisit their strict rules against clearly discriminatory advertising of homes for sale or rent. 

However, I doubt that this ruling would protect a licensee from publishing such an ad at the behest of a client. 

This is a sticky wicket.

Lenn

Dec 21, 2006 03:30 AM
Gabriel Silverstein
Angelic Real Estate, LLC - New York, NY
SIOR

Lenn - the homeowner is still legally punishable under the law.  It would have been more appropriate if they went after the real violators.

I am somewhat familiar with this case locally and it was completely rediculous and unfounded - it was a fair and correct judgement.  I no longer have the numbers available, but the basis for it was something like there were reputedly 100+ ads that were alleged by the plaintiff to be in violation of the FHA - out of something like several million ads on Craig's list over that same period of time.  I am sure I remember correctly that Craigs List has more housing ads nationally than ALL NEWSPAPERS COMBINED.  To think they could police this open post forum is absurd (they have a staff so small it would make your head spin). 

Dec 21, 2006 03:40 AM
Dave Rosenmarkle
Highland Realty, Inc - Fairfax, VA
33 years of providing fully satisfying service!

Lenn

I agree. Licensee's are properly looked at in a different light and would be held to a different standard. Here, the vehicle was looked at, not the driver/author. 

Dec 21, 2006 03:43 AM
Matt Heaton
Timu Corp - CEO, ActiveRain - Co-founder - Bothell, WA

I agree it's a good ruling.  These types of rulings are important to ActiveRain too, because we are in the same boat of being a vehicle for publishing content.

But like you said this doesn't mean the government won't go after the people who actually posted the content that violated the laws.  In fact CraigsList is fairly active in not just removing the content but working with authorities to bust those that are trying to harm consumers. 

http://www.cnewmark.com/archives/000711.html

I was actually on a conference call just an hour or two ago that included Craig Newmark, and he alluded to some potential busts of people committing housing fraud via Craigslist.  Maybe he'll stop on by and throw in his 2 cents...

Dec 21, 2006 04:47 AM
Mitchell J Hall
Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Craiglsist has this posted very clearly. The Gov. needs to go after the racist Realtors and FSBO's unfortunately there are still many of them.

stating a discriminatory preference in a housing post is illegal ]

Dec 21, 2006 05:03 AM
Gabriel Silverstein
Angelic Real Estate, LLC - New York, NY
SIOR
I remember seeing something from Craigs List about helping the authorities go after violators - thanks for bringing that up Matt.  It was yet another reason I thought this lawsuit was ludicrous.
Dec 21, 2006 05:35 AM
Marisa Ladd
Austin Texas Homes, LLC - Austin, TX
Austin, TX Real Estate
Great topic, Dave.  I noticed that Craigslist has a giant Fair Housing disclaimer when you are posting anything in the real estate section.  They are doing what they can to stop discrimination.
Dec 21, 2006 06:13 AM
Rich Schiffer
Swarthmore, PA
Referral Agent, e-PRO

Craigslist should probably do more than simply post their policies and Fair Housing Disclaimer and expect people to abide by them.  They should take pro-active steps to monitor the content, remove content in violation, and protect the end consumer.  It is called being socially responsible.  So what if they are not technicly obligated to do so?  Sometimes being responsible means doing more than you are minimally required to do.

I believe the people who posted the offending ads should have been included as defendants in the suit.  The CDA shields the service provider, not the users.  The court could have then removed craigslist as a defendant, and the case could have proceeded against the offending individuals.

Aside from the litigation issue, this raises another question:  If the letter of a law (The CDA) for example provides more protection for one class or individual than another, doesn't that violate the very principle carved into the walls of our Supreme Court?  You know, the bit about "Equal Protection Under the Law"  It seems to me that a web-only provider now has "more protection under the law" than a newspaper publisher, for example.  You can bet that if the Wall Street Journal posted some of those ads in their online section, they would be fined in a big way.  I think we may need to get our representatives on Capital Hill to fix this apparent oversight. 

Dec 21, 2006 10:07 AM
Anonymous
Jeff Dowler
Thanks for the detailed info, Dave. I read abit about the lawsuit but did not, I'm ashamed to say, follow it. I think the final decision makes sense, and it seems to me that the site is doing what they can to discourage postings that are discriminatory, without being able to read every sinlge post..
Dec 21, 2006 10:49 AM
#10
Gabriel Silverstein
Angelic Real Estate, LLC - New York, NY
SIOR
Rich, don't forget about the First Amendment.  It's not realistic or fair to impose such an oversight criteria on Craig's List, and if you did, you'd flip it around and make them have to be the judge and jury as to who is truly in violation or not, making culpable for alleged discrimination on those that played in the "gray areas".  If Craig's List had to have that oversight level it wouldn't exist - note my comment above about how few staffers there really are in that company - VERY FEW. 
Dec 21, 2006 11:56 AM
Jolynne Photography, Creative Wedding Photography, Family Portraits, Bar Mitzvahs
Jolynne Photography - Hemet, CA
Bat Mitzvahs, Senior Pictures, Event Photography

Should Craigslist be liable when they clearly post that this behavior is unacceptable? 

What should a company like Craigslist (and AR, and myspace, and...) do?

Some technology is so good that the creators can't control it...do we take the good with the bad?  That's how I lean, but the discrimination is disturbing and should be prosecuted.

Dec 21, 2006 12:00 PM
Mark Flanders
Consulting - Silverdale, WA

Great post Dave. I missed this news entirely. I do think the ruling is sound. But there is an obvious problem. It appears that it's not going unnoticed. I can see why Matt would watch this with interest.

Thanks for the info.

Dec 21, 2006 12:33 PM
Jeff Turner
RealSatisfied - Santa Clarita, CA

It's actually possible for Craig's List, or any database driven website, to program their real estate listings to reject, automatically, any posting that contains the words in the red portion of this link, as an example. It would require no oversight on their part. These words are simply forbidden from use. There is no gray area in the red zone. A comprehensive list would get rid of the overtly discriminatory language. The rest is subjective. 

 

 

Dec 21, 2006 04:53 PM
William Collins
ERA Queen City Realty - Scotch Plains, NJ
Property and Asset Management

Dave,

Thanks for the post. It would appear that Craigslist is protected under the Communications Decency Act and they are doing their due diligence.

Dec 22, 2006 01:09 AM
Mitchell J Hall
Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

newspapers still have lag time between booking an ad and having it printed on a printing press. Websites are in real time an ad is posted immediately.

Craigslist is free. Newspapers charge. Newspapers see the ad copy, collect the money before they print it.

Dec 22, 2006 01:35 AM
"The Lovely Wife" The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

We wish you a merry Christmas! We wish you a merry Christmas! We wish you a merry Christmas And a happy New Year! Glad tidings we bring To you and your kin! Glad tidings for Christmas And a happy New Year!

Broker Bryant and The Lovely Wife (pretend we are singing it works better like that) ROAR!

Dec 23, 2006 10:40 AM
Dave Rosenmarkle
Highland Realty, Inc - Fairfax, VA
33 years of providing fully satisfying service!
And to you and your kin!!
Dec 23, 2006 11:01 AM