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Published: 2014-03-11

Ninth Circuit Decision Creates Liability Risk for Social Networking Sites



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The Ninth Circuit recently issued a ruling against Roommates.com that could greatly impact other social networking sites by calling into question the immunity under Section 230 of the Communications Decency Act that such sites have previously enjoyed.

Section 230 immunizes "information services providers," such as websites, from suits related to the publication of information by third parties. If a third-party uses the service to post defamatory or otherwise illegal content, Section 230 shields the service provider from any liability arising out of the publication. Service providers that, in whole or in part, create or develop the contested information, on the other hand, are deemed "content providers" that do not benefit from the protections of Section 230.

The current case, Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, began when two fair housing groups sued Roommates.com, alleging that Roommates.com's service violated the Fair Housing Act. Roommates.com, as the name implies, provides services for individuals looking for rooms or roommates, and operates in a similar fashion to many other social networking sites, such as MySpace.com. The site collects information from its users upon registration, and then organizes the information into profiles that can be viewed by other users.

The fair housing councils averred that Roommates.com's requirement that users fill in their roommate preference amounted to discrimination, since users could state their desire to avoid homosexual roommates, roommates with children, or roommates from other groups protected under the FHA. In addition to simply collecting users' roommate choices, Roommates.com also filtered out the profiles available to each user according to the users' stated preferences. For instance, a gay male could only view profiles of those people who had indicated that they would approve of living with a gay man.

The district court found that the website qualified for Section 230 immunity and entered judgment for the website without reaching the question of whether the site did indeed violate the FHA. On appeal, the Ninth Circuit reversed and remanded for a trial on the merits.

A divided Ninth Circuit panel found that the website created or developed information on the site in two ways: First, by creating the questions that users answered when creating their profiles. Second, by channeling or filtering the profiles according to the answers to those questions.

The court's first rationale for denying immunity seems pretty straightforward: the site wrote the questions, and therefore it is the provider of the content and not subject to the immunity provisions.

The court's second justification is much more controversial, and goes against the widely established precedent granting a broad, robust privilege to interactive service providers. In essence, the panel's majority opinion states that, by channeling information to users and providing search capabilities, Roommates.com has added an additional layer of information, "meta-information" you could say, that it is at least partly responsible for creating or developing.

The effects of this new "channeling" test could be devastating for social networking sites, many of which operate in similar ways to Roommates.com. Sites could now find themselves open to liability for information posted by third-parties, and this could result in a reduction of the number of speech-related services available online - exactly the opposite of what Congress intended when passing Section 230 in the first place.

For example, MySpace.com attempts to restrict the ability to view underage profiles by preventing older users from accessing them. In effect, the web site filters the content based on answers provided during registration to ensure that only minors of certain ages can view other profiles from that age group. This would almost certainly qualify as meta-information under the Roommates.com decision, and would bump MySpace out from under the protection of Section 230.

If a sexual predator give a false age on MySpace.com and then lured a victim from the site, would MySpace then be open to claims of negligence in the publication of the information? A federal district court in Texas recently answered that question in the negative, but under this new decision, which carries more precedential weight, courts could swing in the opposite direction and find the web site liable.

For social networking sites that have large populations of users, this creates a stifling potential for liability on a range of claims tied to the publication of content by their users. Faced with this potential liability, many may choose to cease operating or to limit their services in order to reduce their liability.

Given that the Roommates.com decision goes against the body of established precedent for Section 230 cases, however, it is likely that Roommates.com will ask for an en banc review, and it is likely that they will prevail during that review. Until then, however, watch for a deluge of plaintiffs rushing to court in the Ninth Circuit's jurisdictions in order to sue social networking sites. The door is now open.