The Web site had argued that the federal Communications Decency Act immunized it from discrimination lawsuits based on user comments, but the 9th Circuit ruled that the roommate-matching site couldn't rely on that statute because it actively solicited allegedly unlawful information.
"Roommate designed its search and email systems to limit the listings available to subscribers based on sex, sexual orientation and presence of children," wrote Judge Alex Kozinski in a decision issued last week. "Roommate both elicits the allegedly illegal content and makes aggressive use of it in conducting its business."
The case stemmed from a lawsuit by the Fair Housing Councils of San Diego and the San Fernando Valley, Calif. They charged that the site was breaking the law by matching up roommates based on factors like their race or whether they had children.
A lawsuit accusing listings site Craigslist with violating fair housing laws was recently dismissed by another appellate court, the 7th Circuit, but that case had a crucial difference: Craigslist didn't structure questions in a way that elicited the objectionable criteria. Instead, users decided on their own to write ads that expressed racial or religious preferences.
Kozinski's opinion noted that Roommates.com not only asked potentially illegal questions, but also insisted that users provide answers. "The information about sex, family status and sexual orientation," he wrote, "is provided by subscribers in response to Roommate's questions, which they cannot refuse to answer if they want to use defendant's services."
Some digital rights advocates view the Roommates.com case as a significant loss, because it appears to open the door to lawsuits against a variety of Web publishers for reasons that go far beyond discrimination in housing.
"Much of the analysis Judge Kozinski uses can't be cabined into just a Fair Housing Act challenge," said John Morris, general counsel at the Center for Democracy & Technology. "It's unavoidable that we will see, in the 9th Circuit, a huge spike in lawsuits brought."
Morris said that sellers on e-commerce sites like eBay might now be able to sue for defamatory comments left by purchasers, on the theory that eBay solicited libelous remarks by asking users whether the item was as advertised.
Amazon and a host of other Web companies had attempted to weigh in on the case on behalf of Roommates.com, but the 9th Circuit rejected the friend-of-the-court brief because it would have created a conflict of interest for at least one judge.