On May 15, 2007, in a divided decision, the United States Court of Appeals for the Ninth Circuit adopted a new and significantly narrower interpretation of the immunity from liability for online service providers provided by the Communications Decency Act.  In Fair Housing Council of San Fernando Valley, et al. v. Roommates.com, LLC, Appeal Nos. 04-56916 and 04-57173, (click here) Ninth Circuit holds that service providers may be liable for content originating from users if they solicit the unlawful information, or categorize, channel, and limit the distribution of the information.

In 1996, Congress enacted the Communications Decency Act, known as the CDA.  The CDA includes a limitation on liability.  Specifically, it provides 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.”  47 U.S.C. § 230(c)(1).  Much of the CDA was subsequently found unconstitutional by the United States Supreme Court, but the immunity provision survived, and indeed flourished.

Prior decisions, including those of the Ninth Circuit, have broadly construed the immunity granted by the CDA.  The California Supreme Court recently held that the CDA bars tort claims even if information is posted on the Internet with notice of its defamatory character, and that it extends immunity to users who post information sent to them by others as well as service providers.  Barrett v. Rosenthal, 40 Cal. 4th 33, 39-40 (2006).  The Ninth Circuit had previously held that the CDA bars claims based on the active selection and posting of allegedly defamatory information (as opposed to merely the passive receipt and posting of information, such as on an open Internet group or bulletin board).  Batzel v. Smith, 333 F.3d 1018 (9th Cir. 2003).  Most recently, the Ninth Circuit held that the CDA precludes liability for all state law claims, including state intellectual property claims.  In Perfect 10, Inc. v. CCBill, LLC, et al., Appeal No. 04-57207, the court addressed the provision of the CDA specifying that it does not “limit or expand any law pertaining to intellectual property.”  See 47 U.S.C. § 230(e)(2).  However, it construed this limitation as permitting only claims made under “federal intellectual property law,” and thus held that claims under state intellectual property law are barred by the CDA.

Carafano v. Metrosplash.com, Inc., 339 F.3d 1119 (9th Cir. 2003), the Ninth Circuit held that an online dating service was immune from liability under the CDA, even though it used questionnaires to solicit specific information, providing multiple choice answers to many of the questions, and then directed that information to other users based on the responses.  The plaintiff pointed to another provision of the CDA, the definition of “information content provider,” which states:  “The term ‘information content provider’ means any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.”  47 U.S.C. § 230(f)(3).  The plaintiff argued that this process made the service provider the “information content provider,” and hence subjected the service provider to liability for the content of a false posting.  The Ninth Circuit disagreed:

The fact that some of the content was formulated in response to Matchmaker’s questionnaire does not alter this conclusion. Doubtless, the questionnaire facilitated the expression of information by individual users. However, the selection of the content was left exclusively to the user. The actual profile “information” consisted of the particular options chosen and the additional essay answers provided. Matchmaker was not responsible, even in part, for associating certain multiple choice responses with a set of physical characteristics, a group of essay answers, and a photograph.  Matchmaker cannot be considered an “information content provider” under the statute because no profile has any content until a user actively creates it.

Carafano, 339 F.3d at 1124.  The Court also noted that “[s]imilarly, the fact that Matchmaker classifies user characteristics into discrete categories and collects responses to specific essay questions does not transform Matchmaker into a ‘developer’ of the ‘underlying misinformation.’”  Id.

The Ninth Circuit’s most recent decision, Fair Housing Council of San Fernando Valley, et al. v. Roommates.com, LLC, is difficult to reconcile with these prior decisions, particularly Carafano.

In Fair Housing Council, housing advocacy organizations sued an online roommate matching service for violation of the federal Fair Housing Act and various state laws.  The district court held that the CDA barred the federal claims and dismissed the lawsuit.  The Ninth Circuit reversed.  Each of the three judges (Alex Kozinsky, Stephen Reinhardt, and Sandra Ikuta) wrote a separate opinion.

The circumstances of the Fair Housing Council case are not easily distinguishable from those presented in Carafano.  Roommates.com solicited information from users through questionnaires that mostly provided a range of pre-established responses.  It also solicited unscripted responses through an “additional comments” form.  It compiled the information and provided it in the form of member profiles, in response to queries from other users who expressed an interest in potential roommates with certain characteristics.  The court addressed three asserted bases for liability: (1) the content of the questionnaires themselves (i.e., without any responses); (2) the member profiles created based on user responses to the questionnaires; and (3) the distribution of comments submitted by users through the “additional comments” form.

All three judges agreed that Roommate.com was not immune from liability for the content of the questionnaires.  Two (Kozinsky, who wrote the main opinion, and Reinhardt) agreed that liability could be imposed for the member profiles.  One (Reinhardt) argued that there was no immunity for the “additional comments,” either.  One (Ikuta) argued that there should be no liability for either the member profiles or the additional comments.

The core holding of the case was the conclusion that the CDA did not immunize Roommate.com from liability for the information contained in the user profiles.  The court held that the CDA does not provide immunity “in a situation where defamatory, private, or otherwise tortious or unlawful information was provided by users in direct response to questions or prompts from the operator of the website.”  At least, the majority said, there is no immunity from liability if the service provider also “channels the information” to other users.  (The majority decision suggests that it may be necessary to meet both tests in order to lose CDA immunity.  Judge Reinhardt’s concurring decision says that the tests are independent, and that immunity will be lost if either test is met.)

The exception to CDA immunity created by this decision is potentially quite broad.  Internet service providers routinely solicit information and commentary from users.  Many service providers do so in the context of questionnaires with structured, multiple-choice responses.  Virtually all could be said to “channel” responses to specific categories of users.

The apparent conflict between the decision in Fair Housing Council and the Ninth Circuit’s prior decisions means further debate is likely.  Stay tuned, but please do not submit your comments on this topic to our web site.