Unfair housing on the Internet: the effect of the Communications Decency Act on the Fair Housing Act.

• Author: Crossett, J. Andrew

1. INTRODUCTION

   The use of online advertisements is a relatively new, but rapidly-growing phenomenon. Consumers have latched onto the idea of holding an online garage sale and its use has seen a marked increase. For example, online classified advertising services users increased eighty percent between 2004 and 2005. (1) Consumers, however, sell more than baseball gloves and books online. One sector of the online advertisement market that has proven to be problematic is the sale of housing rental space. These advertisements would seemingly fit within the scope of the Fair Housing Act, which contains a provision regulating housing advertisements. However, these advertisements also fall within reach of the Communications Decency Act. These two statutes contain conflicting provisions, and it remains to be seen whether they can be harmonized.

   This article will first discuss the scopes of both the Fair Housing Act and the Communications Decency Act. It will then look at two cases that have addressed the intersection of the two statutes. Finally, this article will discuss the merits of each court's decision and suggest a path for the future.

2. STATUTORY CONFLICT

   Two recent cases (2) address the issues that arise when section 804(c) of the Fair Housing Act (FHA) (3) seemingly conflicts with the Communications Decency Act of 1996 (CDA) (4) in the forum of the Internet. Before discussing the cases and their outcomes, however, it is first necessary to analyze the legal backdrop against which these cases were decided.

   1. The Fair Housing Act

      The Fair Housing Act was enacted in 1968 and prohibits housing discrimination based on the protected categories of race, color, gender, disability, age, religion, and familial status. The basic policy behind the FHA is "to provide, within constitutional limitations, for fair housing throughout the United States." (5) The FHA was a long overdue policy when Congress enacted the statute in 1968. From 1940 through 1970, racial segregation was "a permanent structural feature of the spatial organization of American cities." (6) This segregation was the result of both private and governmental action. On the private side, the real estate industry was institutionalizing discrimination (7) and banks were frequently denying home loans to African Americans. (8) The government was also perpetuating the discrimination by channeling public mortgage funds away from established black areas or potentially black areas. (9) The FHA was an "attempt to alter the whole character of the housing market." (10) Despite the enactment of the FHA and the resulting large-scale public and private abandonment of overtly racist housing tactics, a segregation problem still exists today. (11) For example, one recent study conducted in Boston found that nearly half of the African-American homebuyers were concentrated in only seven of 126 communities. (12) Thus, it is clear that the goals of the FHA have not yet been realized.

      With the history of the FHA in mind, let us now turn to the specific provision of the FHA that is in issue in this article, section 3604(c). Section 3604(c) provides that it is unlawful "[t]o make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin." (13) Even with this broad language, the Supreme Court has acknowledged and reinforced the "'broad and inclusive' compass" of the FHA (14) and has afforded the FHA "generous construction." (15) Moreover, the section 3604(c) ban on discriminatory advertising is even more expansive in its reach than other FHA prohibitions on discrimination.

      Other portions of section 3604 prohibit discriminatory refusals to rent, sell, or negotiate, as well as discrimination in the terms, conditions, or privileges of the sale or rental of a dwelling or in the provision of related services. (16) Section 3603(b) establishes some exemptions from the reach of section 3604. (17) However, no person is exempt from section 3604(c), as its language "'does not provide any specific exemptions or designate the persons covered, but rather ... applies on its face to anyone' who makes prohibited statements." (18) In effect, section 3604(c) is a "strict liability" provision because liability requires only that the notice, statement, or advertisement be made "'with respect to the sale or rental of a dwelling' and 'indicate' discrimination." (19)

      A final indicator of section 3604(c)'s expansive coverage is that it applies to anyone capable of making statements "in connection with the sale or rental of a dwelling." This includes newspapers and other media that are not in the business of providing housing, (20) making its reach broader than that in Title VII and the ADEA. (21) The existence of section 3604(c) demonstrates "Congress' desire to make the fair housing provision broader than its Title VII and ADEA counterparts." (22)

      The upshot is that the language of section 3604(c) is broad. No person or entity is exempt from its reach, provided that the statement is made in connection with the sale or rental of a dwelling and indicates discrimination on a prohibited basis. Although discrimination may be permissible in the sale or rental of housing when that housing falls into one of the statutory exemptions, it is never permissible to advertise that discriminatory animus.

      One early case that demonstrates the effect of section 3604(c) is United States v. Hunter. (23) This case involved a defendant who was the editor and publisher of a newspaper that published classified advertisements that were facially discriminatory on the bases of race and sex. (24) Although the newspaper's involvement with the advertisement did not reach beyond publishing, the Hunter court nonetheless found the newspaper liable under the FHA. (25) Referencing the specific language of section 3604(c), the court said, "[i]n the context of classified real estate advertising, landlords and brokers 'cause' advertisements to be printed or published and generally newspapers 'print' and 'publish' them ... both landlords and newspapers are within the section's reach." (26)

      The FHA's broad prohibition on discriminatory advertising serves three principal goals. (27) First, it is intended to stave off the exclusionary effect of discriminatory advertising. The court in Hunter described the problem: "[S]eeing large numbers of 'white only' advertisements in one part of a city may deter nonwhites from venturing to seek homes there, even if other dwellings in the same area must be sold or rented on a non-discriminatory basis." (28) Second, it addresses the "discouraging psychological effect" of the expression of discriminatory preferences. (29) Courts have endorsed this policy goal by awarding emotional distress damages to aggrieved parties. (30) Furthermore, the legislative history of section 3604(c) indicates Congress' concern with the harm a person could suffer from hearing a discriminatory statement. (31) Courts have even allowed claims by "aggrieved persons" who were not in the market for housing. (32) Finally, the broad prohibition on discriminatory advertising seeks to prevent the spread of misinformation among the public at-large. (33)

   2. The Communications Decency Act

      The Communications Decency Act is a statute that promotes free expression on the Internet by shielding website operators from liability for material posted by their users. This Act relates to the Fair Housing Act because section 3604(c) has faced statutory challenges from section 509 of the Communications Decency Act of 1996 (CDA) (34) (codified at 47 U.S.C. section 230), which establishes that "[n]o 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." (35) By its plain language, this provision appears to insulate publishers of online housing advertisements from liability.

      Section 230(c) (36) has two subparts. Section 230(c)(1) provides: "Treatment of publisher or speaker: No provider or user of an interactive computer service (ICS) shall be treated as the publisher or speaker of any information provided by another information content provider." Courts consistently enforce the FHA against newspapers on the theory that the newspaper is publishing the alleged discriminatory material. (37) However, the language in section 230(c)(1) precludes this avenue for finding liability under the FHA on behalf of an interactive computer service (ICS) as publisher because the ICS provider cannot be treated as a publisher.

      The second subpart of section 230(c) provides:

      (2) Civil Liability: No provider or user of an interactive computer service shall be held liable on account of (A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or (B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1). (38) This section provides an exculpatory clause for the ICS, provided that the ICS's action falls within the parameters provided in the provision. In broadly construing section 230, courts have relied in part on section 230(c)(2) to preclude liability for all users and providers of an ICS. (39)

      Section 230(f)(2) defines "interactive computer service" to encompass "any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and...