Ninth Circuit Denies Website Immunity in Housing Discrimination Suit

The Court of Appeals for the Ninth Circuit has just ruled that Roommates.com, an apartment-sharing website, can't claim immunity from a housing discrimination suit based on Section 230 of the Communications Decency Act, largely based on the content of the drop-down menus the site employs during the user registration process.

The court sent the case back down to the district court for a determination of whether or not the site really did illegally discriminate against housing applicants.

Second Time Around

This was the second time the Ninth Circuit has heard this case, and the second time that the court has ruled against immunity for Roommates.com. After a three-judge panel of the court ruled on the case initially, the Ninth Circuit elected to nullify the panel's decision and rehear the case en banc.

This was likely the result of a severe outcry from cyberlaw enthusiasts, who condemned the original opinion as dangerously unclear and prognosticated that it would mean the end of immunity for search engines and social networking sites, and the general downfall of the internet.

That first opinion stated that Section 230, which essentially removes liability from sites for information provided by a third-party, did not protect Roommates.com since the site had acted as an active content provider, rather than a mere conduit. The panel based this assessment on the fact that Roommates.com provides questions for users to fill out during registration, and filters users' access to certain profiles based on the answers they give to those questions.

Chief Judge Alex Kozinski of the Ninth Circuit, the author of the original opinion, apparently wanted another bite at the apple. He authored the current decision, and it's clear that he has deliberately responded to the criticism aimed at his first attempt.

What isn't so clear is whether he has succeeded at crafting a better approach to Section 230.

Facts of the Case

The case originally arose when anti-discrimination housing organizations filed suit against Roommates.com alleging that the website violated the Fair Housing Act, which prohibits discrimination against people seeking housing based on a list of protected characteristics, such as sex, race, religion, sexual orientation, etc.

Roommates.com allows users to create a profile, choose whether they are seeking or offering rooms, and then search for available matches based on the information provided in the profile registration process. As part of that process, Roommates.com requires users to state their preference regarding potential roommates' gender, age, and sexual preference. Users must also provide their own personal characteristics.

The Roommates.com registration uses drop-down menus to provide options for registrants' answers. The site also provides a text-box where users can give additional comments.

The answers that users give are then displayed on a profile page. Roommates.com also sends users email notices of new profiles that fit the requirements they set for their roommates.

The plaintiffs attack the website on appeal in three ways:

  1. They challenge the actual questions that Roommates.com asks its users;
  2. They assert that the site's display of the profiles deprives it of immunity; and
  3. They contend that Roommates.com shares the liability for the additional comments that its users submit.

The Court's Approach

The court, for the most part, agreed. As regards the profile questions, the court found that, since the site created the questions and answer options, it could not claim Section 230 immunity.

Section 230, as mentioned above, immunizes against third-party content, but it does not apply if a website developed, in whole or in part, the questionable information.

The next of the court's rulings touches again on that concept, and determines that Roommates partially developed the profiles it displays as well, since it required users to answer certain questions in certain ways using the drop-down menus.

This aspect of the decision seems like it could bring the Section 230 immunity crashing down on the heads of website operators across the Ninth Circuit and open them up to a flood of lawsuits based on user-generated content, since most websites require user input through dropdown menus as part of the registration process.

Chief Judge Kozinski, recognizing this danger, goes on to refine the test somewhat. Websites only lose Section 230 immunity, he writes, when they "materially contribut[e] to [the content's] alleged unlawfulness." Thus, if a website asks basic questions - like a user's location, for instance - and provides answers in a drop-down, the website won't be liable for the resulting profile or content.

Moreover, the judge continues, the major search engines won't lose their immunity because they are "neutral" tools that do nothing to encourage users to engage in illegal searches. [Although the amount of copyright-infringing music and porn available through Google might suggest otherwise.]

Roommates.com, on the other hand, "both elicits the allegedly illegal content and makes aggressive use of it in conducting its business." Thus, no immunity.

The judge wraps up the decision by declaring that, since the additional comments were optional, and since Roommates.com didn't prod users into saying anything discriminatory or otherwise illegal, the site didn't partially develop the comments, and so still enjoyed immunity for the information that users provided.

In a footnote, the judge congratulates the court for clarifying the edge of Section 230 immunity, and notes that the internet doesn't need as much protection as it once did. While this may be true, the decision does threaten to increase the number of lawsuits that websites will have to face, since plaintiffs can now argue that websites promoted or encouraged illicit behavior in order to get around the protections of Section 230.

Chief Judge Kozinski, labeling this the threat of "death by ten thousand duck-bites," argues that the "material contribution" test the court laid out will protect websites by allowing judges to weed out the junk suits from the meritorious. Any close cases, he writes, should break in favor of immunity.

Repercussions?

Even if that's the case, though, some plaintiffs who might not have sued before may see this ruling as a chink in websites' armor and decide to file suit. And there are still significant transaction costs associated with defending a lawsuit, even one that never makes it out of the pre-trial stages.

In other words, even if the ducks don't get close enough to take a bite, shooing them away will still take up some resources, so the court's decision may end up increasing the number of websites run out of business through litigation costs, or deterring new websites from starting for fear of incurring lawsuits.

Still, even if you disagree with the holding, the decision might have some benefit. Evan Brown, an information technology lawyer and blogger, writes that the decision could prevent some unwelcome changes in Section 230.

A second defeat for a Fair Housing Act lawsuit (an earlier Seventh Circuit decision involving Craigslist.com immunized the classifieds website from a similar FHA action) could offend and galvanize Congress and result in significant changes to the beneficial protections offered by Section 230, or even lead to repeal, Brown argues.

So maybe the decision's not entirely bad for websites. Still, if you're a website trafficking in user-generated content in the Ninth Circuit, you might want to get your check book ready and put your lawyer's number on speed dial.

You might need them sooner than you think.