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Online Housing Information Providers Come Under Attack

By John H. Minan  

John H. Minan is a professor of law at the University of San Diego and chair of the Environmental Law Committee.

The Internet has become an important tool used by sellers and buyers to navigate the housing market. With the click of a mouse, consumers can access a wide array of useful housing information.

Online listing services, such as Yahoo!Rentals and Craigslist, provide consumers with a convenient and economically efficient means of searching for housing. Yet, Online Service Providers (OSPs) of housing information are under legal attack by those who claim that many of the advertisements posted on online listing services violate federal law.

The leading edge of this legal tsunami is represented by a lawsuit recently filed in the U.S. District Court for the Northern District of Illinois, Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc. The plaintiff, a nonprofit organization dedicated to promoting and protecting civil rights, alleges that the housing information posted by third parties on the Craigslist’s Chicago website violates the 1968 Federal Fair Housing Act (FFHA).

The Lawyers’ Committee seeks monetary and injunctive relief as well as reasonable attorney’s fees and costs against the defendant, Craigslist. Contrary to the usual rule in civil litigation, the FFHA allows the award of reasonable attorney’s fees to a prevailing plaintiff.

The FFHA, which was written long before the Internet was popularized, prohibits discriminatory advertising. The complaint against Craigslist is based on the alleged violation of section 3604(c). This section makes it unlawful to make, print, or publish advertisements for the sale or rental of housing that indicate “any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin.”

The plaintiff cites more than a hundred instances in which the defendant posted advertisements on its website that allegedly violate federal law. These included postings that said, for example, “No Minorities,” “Only Muslims apply,” “Requirements: Clean Godly Christian Male,” and “Ideal for roommates or single person. Sorry, no kids, no pets.” Many of the postings would violate the FFHA had they been published by a newspaper, magazine, or other traditional publisher.

But is this the relevant legal analogy? The online posting process does not involve the same degree of control associated with traditional publishers. Advertisements typically are posted free and without editing or other screening by the defendant. The Chicago Craigslist’s website, which is run by fewer than twenty employees, is reported to process nearly 2 million free housing postings each month. This volume of advertisements is greater than those received by all U.S. newspapers combined.

Although the Department of Housing and Urban Development has published guidelines that identify words and phrases that would most likely violate section 3604(c), it is not clear that effective methods exist to control all the potentially objectionable postings. There is also the practical concern that OSPs may simply move their operations offshore to avoid federal regulation, much like Internet gambling has in many instances.

Another difference distinguishes this case from the more traditional publishing situation—the availability of a possible defense under the Communications Decency Act (CDA). Section 320(c) of this law provides 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.” The definition of “interactive computer service” would include OSPs, such as Craigslist.

Section 320(c) seems to bar a legal claim against an OSP for being a “publisher or speaker.” Thus, the court might reasonably construe this section as granting the defendant immunity from a cause of action for information communicated online through its service by a third party.

The argument against this is that CDA was primarily directed at a different type of public concern. It was intended, at least in part, to protect interactive service providers from liability arising from their policing of online content that was considered obscene, harassing, or otherwise objectionable. In short, the CDA was intended to protect interactive service providers who block and screen offensive material.

The law frequently finds itself in a catch-up mode to advances wrought by technology. The connection between cyberspace and the FFHA presents this type of situation. The advertising provisions of the FFHA were written long before the advent of the Internet. Thus, the claim that “the law is the law” rings somewhat hollow. While the CDA was written with the Internet in mind, it was directed at a different type of problem than online advertising by third parties. It’s an interesting argument, but not entirely persuasive.

While the courts must resolve these types of disputes when they are brought before them, prudence dictates that courts proceed cautiously when Congress has not clearly spoken on matters involving online advertising. Unintended consequences are a real concern. The wiser course of action is for Congress to step in, consider the competing policies, and legislatively resolve the relationship between online advertising and the application of the FFHA.