March 1, 2012

Ninth Circuit Issues Dispositive Ruling in Long-Running Litigation: Fair Housing Act Does Not Extend to Roommate-Matching Website

Digital Technology & E-Commerce Blog
Marc S. Reisler operates a Web-based business that helps roommates find each other. In filling out an online questionnaire, users are asked to list their preferences for potential roommates, including gender, sexual orientation and familial status, and based on these profiles, the site matches users and provides them a list of housing-seekers or available rooms meeting their criteria. Unless a prospective user furnished this information, he or she would be unable to use the website. The plaintiff sued, alleging that the website’s user interface requiring such disclosures, and its matching of users based on sexual orientation and familial status, violated the Fair Housing Act (“FHA”). Generally speaking, the FHA prohibits discrimination on the basis of “race, color, religion, sex, familial status, or national origin” in the “sale or rental of a dwelling.” 42 U.S.C. § 3604(b).

Before the Ninth Circuit's latest ruling dismissing the FHA claims, the litigation had taken a notable detour through Section 230 of the Communications Decency Act (“CDA”), 47 U.S.C. § 230.

In its initial holding, the lower court dismissed the plaintiff's claims, concluding that the defendant was immune under CDA Section 230. However, in a much-discussed opinion, Fair Housing Council of San Fernando Valley v., 521 F.3d 1157 (9th Cir. 2008) (en banc), the Ninth Circuit reconsidered whether the roommate matching website was entitled to Section 230 immunity. Because the website operator had designed its website to develop content that allegedly violated the FHA as a condition precedent of use, the Ninth Circuit held that the operator was an information content provider for the discriminatory postings created by third parties and not entitled to § 230 immunity.

The Ninth Circuit's 2008 opinion was limited to the question of CDA immunity and did not reach whether the site's activities, in fact, violated the FHA. Interestingly (and in hindsight, quite presciently), the dissent in the en banc opinion called into question the majority's choice of language that seemingly intimated that the defendant had facilitated unlawful, discriminatory conduct.

"At this stage, there has been no determination of liability under the FHA, nor has there been any determination that the questions, answers or even the existence of Roommate’s website violate the FHA. By offering up inflammatory examples, the majority’s opinion screams 'discrimination.' [….] [O]ne would not divine this posture from the majority’s opinion, which is infused with condemnation of Roommate’s users’ practices. [….] The majority condemns Roommate for soliciting illegal content, but there has been no determination that Roommate’s questions or standardized answers are illegal. Instead of foreshadowing a ruling on the FHA, the opinion should be confined to the issue before us—application of § 230(c)(1) to Roommate."

On remand, the lower court found that the roommate matching site violated the FHA, but last month, the Ninth Circuit, in Fair Housing Council of San Fernando Valley v. LLC, 666 F.3d 1216 (9th Cir. 2012), reversed the lower court's holding and dismissed the plaintiff's FHA claims. The court held that because the FHA does not apply to the sharing of housing units, and it is not unlawful to discriminate in selecting a roommate, the site's alleged facilitation of discriminatory roommate searches did not violate the FHA.

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