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US court protects Craigslist from housing suit

Don't call it immunity, though

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Chalk up another win for websites hosting user-generated content, but be sure to add an asterisk.

The Court of Appeals for the Seventh Circuit agreed with Craigslist.com last week that Section 230 of the Communications Decency Act protected it from a lawsuit over discriminatory housing postings appearing on the site, but in doing so it reaffirmed its narrow view of the statute.

Section 230, in general, states that providers of interactive computer services are not publishers of the information provided by their users for purposes of legal liability.

The Chicago Lawyers’ Committee for Civil Rights Under Law sued Craigslist in February 2006, alleging that the site violated the Fair Housing Act by providing a forum for users to post housing notices stating a discriminatory preference. The district court ruled in favor of Craigslist and dismissed the suit later that year.

On appeal, the Lawyer's Committee argued that Section 230 only applied to websites that took steps to filter out unlawful content. This argument unsuccessfully attempted to take advantage of the Seventh Circuit's narrow interpretation of Section 230 from a previous case.

The author of that case, Chief Judge Frank Easterbrook, also wrote the current opinion in the Craigslist case. He upheld the reasoning of the previous decision and limited Section 230's scope to those claims that have a publication element. This means that courts within the Seventh Circuit's jurisdiction cannot hold websites liable for injuries that require some kind of publication, such as defamation or the discriminatory housing postings at issue in the Craigslist case, but can find the sites liable for all other torts arising out of information provided by their users.

This has broad implications for websites that allow user-generated content, since many courts have construed Section 230 as immunizing websites from liability for a much wider variety of torts. One court in Texas, for example, has ruled that Section 230 shielded MySpace from claims of negligence after a minor was sexually assaulted by a man she met on the site. The Seventh Circuit, however, has resisted the general movement towards this concept of website immunity by treating the relevant portion of the law as a definitional clause rather than a grant of a broad immunity from liability.

Easterbrook pointed to the Grokster decision, as support for his idea of a limited Section 230. If Section 230 doesn't block liability for contributory infringement when an interactive service is designed to help its users steal music, he opined, then it must not create the broad immunity that most courts claim it does.

The lack of a full immunity, Easterbrook argued in the earlier suit, means that states can regulate aspects of interactive services that don't relate to publication. Thus, under the Seventh Circuit's interpretation, states could write laws opening social networking sites up to liability for negligence if they fail to verify the age of their users. Under the broader immunity paradigm, this sort of legislation would likely run afoul of Section 230.

Right now, this ruling only affects websites subject to the jurisdiction of the Seventh Circuit. If the Lawyer's Committee appeals the case to the Supreme Court, however, it's possible that the Court could agree with the Seventh Circuit's reading of the statute and limit the scope of Section 230's protection for all websites.

And that would make the websites' wins much harder to come by. ®

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