Craigslist Suit Challenges Immunity of Web Operators

A federal suit against Web site Craigslist.org for allowing discriminatory housing ads may cause companies to reconsider the extent to which they should leave their sites open to unmonitored posting from the general public.

Filed in U.S. District Court in Chicago, the suit seeks to force Craigslist to report to authorities anyone trying to post a discriminatory ad. The suit also demands that Craigslist implement screening software that will vet housing postings for discriminatory content.

The plaintiff is a non-profit affiliate of the National Fair Housing Alliance. Its Louisiana branch has filed a similar complaint based on 68 discriminatory ads found on Katrinahousing.org, a hurricane relief Web site.

The suits are part of an effort by housing watchdog groups to extend to Web operators the same liability attached to newspapers and other print media that publish classifieds. Free speech proponents, however, say that the lawsuit will mute open forums and free expression if it succeeds.

"If courts start to hold ISPs and bulletin boards responsible for material that individuals have posted, companies will no longer allow public access because they can't afford the enormous costs of policing the content," says Jeff Diamant, a litigation partner at Ware Jackson Lee & Chambers in Houston.

Many legal experts believe the plaintiffs have an uphill battle. They cite Section 230 of the Communications Decency Act of 1996, which declares that operators of Internet services are not publishers under the law.

"While Section 230 doesn't explicitly state that a service provider is immune from liability for the words of third parties who use their services, a fair reading of the statute and the legislative history shows an intent to immunize," says Professor Jennifer Rothman of the Washington University School of Law.

Diamant points out, however, that judgments interpreting Section 230 are "highly fact-specific," warranting a close look at Craigslist's circumstances.

Discriminatory Postings

San Francisco-based Craigslist was founded in 1995 as a forum for local events. It now has listings in 20 countries and 150 cities. The site runs 8 million new classified ads every month.

The plaintiffs allege that Craigslist's Chicago site has distributed more than 100 ads that violate the federal Fair Housing Act, which outlaws discrimination based on gender, race, disability or family status in ads for rental properties. Included in the ads were ones that read "NO MINORITIES" and "Only Muslims apply."

According to Jim Buckmaster, Craigslist's CEO, only one or two of every 100,000 ads posted to the site are discriminatory. He claims that screening every ad would be an impossible task.

However, each housing ad has a link that warns posters that stating discriminatory preferences is illegal. Users who click on the link get information about the Fair Housing Act and pointers on writing non-discriminatory material.

Users also can flag individual postings and, if enough do, the posting is removed automatically. The "NO MINORITIES" ad, for example, was removed within two hours.

Ironically, these attempts at doing the right thing may expose Craigslist to liability.

"There's an argument that Craigslist is editorializing by arranging for the removal of offensive ads of which they become aware," says Melissa Klipp, an IP and Internet law litigator with Drinker Biddle & Reath in New Jersey. "Despite the fact that Craigslist's efforts appear to be in good faith, they may be on a slippery slope because their efforts put them closer to the position of a print publisher."

Stephen Libowsky, who represents the plaintiffs and is a litigation partner at Howrey Simon Arnold & White's office in Chicago, agrees.

Redefining Publishers

"Quite apart from the issue of editorializing, I don't believe that Section 230 is meant to immunize anyone regardless of what others post on their sites," Libowsky says. "Congress certainly could not have intended to put this entire group beyond the reach of the Fair Housing Act."

As Libowsky sees it, courts must interpret the Communications Decency Act in light of today's technology. "New technology cannot render all civil rights laws devoid of meaning," he said, adding that the issue is one of drawing the line.

"What about ads to sell Cuban cigars or illegal drugs?" he asks. "Are they immune? I don't believe that anyone would suggest that Section 230 immunity extends to child pornography."

But Rothman says the content is irrelevant to the issue of liability. "The immunity of a service provider applies no matter how extreme the speech," she maintains.

There seem to be valid arguments on both sides--but that's the problem.

"Absent a bright line rule, a decision against Craigslist will be chilling to the free flow of information because the uncertainties would be very broad," Diamant says.

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Julius Melnitzer

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