Is Craiglist.com Responsible for Discriminatory Rental Ads Posted on its Websites? A Recent Federal Court Ruling Correctly Says No

The Chicago Lawyers Committee for Civil Rights had sued the site, alleging that Craigslist had violated the federal Fair Housing Act (FHA) by allowing discriminatory housing advertisements to be listed on its Chicago site. These ads, the complaint states, including comments such as "African Americans and Arabians tend to clash with me so that won't work out," "NO MINORITIES," "looking for gay latino," and "Apt. too small for families with small children."

According to the complaint, at least 200 such ads had appeared on the site over the past six months alone. Craigslist says, however, that these ads constituted a very small percentage of the over 200,000 housing ads submitted to its Chicago site during that time.

As noted above, the court held that Craigslist was not legally responsible for its users' postings. In this column, I'll explain why I believe this was the correct result.

If CraigsList Were a Printed Newspaper, It Might Be Held Liable

If Craigslist were a newspaper, this case might have been a slam-dunk. Here's why:

The FHA makes it "unlawful to print or publish or cause to be printed or published any 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, family status or national origin."

Moreover, 1989 amendments to the FHA put stronger penalties in place against newspapers. The 1989 amendments increased the liability for discriminatory advertising and eliminated caps on punitive damages.

It's no wonder, then, that, in recent years, lawsuits alleging discriminatory housing advertising have been filed or threatened against newspapers in Iowa, New York, Oregon, Ohio, Wisconsin, California, Pennsylvania, Illinois and the District of Columbia.

These cases have often settled -- leaving newspaper publishers without much guidance as to their responsibilities under the FHA. Newspapers often do post FHA notices in their classified sections, and inform advertisers about words and phrases that are prohibited.

The Key Issue: Is Craiglist a Publisher or a Virtual Bulletin Board?

If the case against a newspaper's classified section was a slam-dunk, why wasn't the case against Craigslist's online classifieds a slam-dunk too?

The answer lies in the immunity provided by Section 230 of the Communications Decency Act (CDA), which I have discussed in earlier columns such as this one. Under Section 230, a website that allows users to contribute postings that appear on the site as the result of a mechanical -- not an editorial -- process is not considered a "publisher" of these user postings.

To be more specific, the Act states that "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." In the Craiglist.com case, Craigslist's message boards were the "interactive computer service," and its users were "information content provider[s]."

Based on the CDA, the federal district court in the Chicago case held that Craigslist was not a "publisher" of its users' housing ads, and thus could not be held liable as a publisher, under the FHA, for those ads.

This court is not alone in so holding: In a 2004 case, Fair Housing Council of San Fernando Valley v. Roommate.com, the same issues were raised, and the court resolved them the same way. There, the suit alleged that a roommate-matching service violated the Fair Housing Act by allowing users to post potentially discriminatory roommate preferences. Indeed, the plaintiffs argued, the site fostered discrimination by soliciting user preferences with respect to characteristics that could not, by law, be relevant in housing - such as age, gender, sexual orientation, occupation and familial status.

The court also noted, however, that individual users of the site who posted discriminatory content were liable under the FHA and could be sued directly.

Moreover, because of the nature of the ads, suing users who post discriminatory ads is a real possibility. Users who want to successfully rent or sell their houses cannot remain anonymous for long; a simple inquiry into the availability of the house should flush out their names and whereabouts.

Why the CDA Immunity is A Good Idea: Self-Policing Is the Best Solution

Not only is the CDA immunity the law, it's also smart policy. Craigslist and other free Internet sites that allow users to post their own classified ads are much more like the free community bulletin boards put up in coffee shop and grocery stores, than like newspapers' classified ads. Like the coffee shop owner who volunteers her bulletin board, Craigslist should not be held liable for the postings others contribute.

In the absence of FHA liability, will sites like Craigslist.com become hotbeds of discriminatory ads? It's unlikely - for several reasons.

First, Craigslist does officially prohibit content on its site that "violates the Fair Housing Act by stating, in any notice or ad for the sale or rental of any dwelling, a discriminatory preference based on race, color, national origin, religion, sex, familial status or handicap (or violates any state or local law prohibiting discrimination on the basis of these or other characteristics)." More to the point, the site reserves the right to remove such postings.

Second, Craigslist allows users to "flag" ads they find offensive. Thus, the very lawyers who collected the discriminatory ads for the lawsuit, could easily have "flagged" the ads as offensive instead. As Craigslist notes "[d]iscriminatory postings are exceedingly uncommon, and those few that do reach the site are typically removed quickly by our users through the flagging system that accompanies each ad. "

Third, it's debatable whether some of the ads to which the plaintiffs referred in the Chicago suit were discriminatory in the first place. Craigslist.com argued that some "were roommate ads involving constitutionally protected speech and the right to free association, such as "prefer christian roommate", or were ads containing incidental and harmless remarks such as "near St Gertrude's church," and "Buddhist temple nearby." Others, Craiglist says, "simply celebrated the diversity and tolerance of the local community ('vibrant southwest Hispanic neighborhood offering great classical Mexican culture, restaurants, and businesses') ".

It's possible, of course, that a few discriminatory ads could still slip though, which is unfortunate. Moreover, discriminatory ads could possibly stay up for a while before being flagged.

But the alternative, in my view, is worse: Forcing Craigslist to monitor its ads prior to posting would have a high cost - in the fast-paced real estate market, it would predictably impose a delay. In addition, if Craigslist were required to hire a staff to monitor its real estate postings, this free site might quickly turn into a fee-based site.