Uh-Oh, the Ninth Circuit Is Messing Again With Its Roommates Ruling–Vargas v. Facebook

The Roommates.com case plays a critical role in the Ninth Circuit’s Section 230 jurisprudence. The (unnecessarily confusing) majority opinion suggested several exclusions to Section 230’s immunity, including these statements:

• “If you don’t encourage illegal content, or design your website to require users to input illegal content, you will be immune.”
• Defendants partially develop content by “materially contributing to its alleged unlawfulness.” This exclusion is implicated by this case.

Roommates.com has become one of the most cited Section 230 cases of all time (per Shepard’s, over 350 times) and ranked #2 on my list of top 10 Section 230 cases. However, it has not benefited plaintiffs as much as I initially expected. Some possible reasons why:

• The 2008 en banc ruling functionally became dicta in 2012 when the Ninth Circuit held that Roommates.com never touched illegal content at all.
• Judge Kozinski wrote the en banc majority opinion, and I’ve sensed judges have become less eager to cite Kozinski opinions given how his judicial career ended in a #MeToo canceling.
• Most judges have interpreted the Roommates.com exceptions narrowly. Many citations to Roommates.com result in defense wins. Plaintiffs have only a limited number of successful wins based on Roommates.com.
• The Roommates.com ruling has been eclipsed by more recent plaintiff-favorable opinions, such as the Henderson ruling in the Fourth Circuit and Lemmon v. Snap in the Ninth Circuit.

For these and perhaps other reasons, the Roommates.com has been fading in importance. That’s why it’s such a jolt to see a Ninth Circuit panel revitalize it–albeit in a non-precedential decision, which may limit the damage.

The court summarizes the plaintiffs’ allegations:

The operative complaint alleges that Facebook’s “targeting methods provide tools to exclude women of color, single parents, persons with disabilities and other protected attributes,” so that Plaintiffs were “prevented from having the same opportunity to view ads for housing” that Facebook users who are not in a protected class received.

Plaintiff Vargas provides an example. She alleges that she is a disabled female of Hispanic descent and a single parent living in New York City with her two minor children and that she is a frequent Facebook user who has posted photos of herself and her children. Because of her use of Facebook, the platform knew that she was “a single parent, disabled female of Hispanic descent.” She sought housing from August 2018 through April 2019 and was ready, willing, and able to move. In an effort to find housing, she accessed the Facebook Marketplace. Although she sought housing in Manhattan, her Facebook searches yielded no ads for housing in Manhattan. After receiving unsatisfactory search results, in early 2019, Plaintiff Vargas sat side by side with a Caucasian friend “and conducted a search for housing through Facebook’s Marketplace, both using the same search criteria . . . . [The Caucasian friend] received more ads for housing in locations that were preferable to Plaintiff Vargas. Plaintiff Vargas did not receive the ads that [the friend] received.” In other words, her Caucasian friend saw more, and more responsive, ads than Plaintiff Vargas received even though they used identical search criteria.

Based on these allegations, the court concluded Section 230 did not apply because “Plaintiffs’ claims challenge Facebook’s conduct as a co-developer of content and not merely as a publisher of information provided by another information content provider.”

Uh oh. When the Ninth Circuit riffs on what constitutes a “co-developer,” it opens up a Pandora’s box of potential Section 230 exclusions. So what exactly would cause Facebook to become a “co-developer”?

The court says Facebook materially contributed to the alleged illegality because “Facebook created the categories [for advertisers to target users by demographics], used its own methodologies to assign users to the categories, and provided simple drop-down menus and toggle buttons to allow housing advertisers to exclude protected categories of persons.”

Facebook pointed out that users are required to input only some data, including age and gender, not all of the demographics at issue in the discrimination case. The court responds that Facebook inferred other protected attributes through data-mining. Thus,

Facebook was “much more than a passive transmitter of information provided by others; it [was] the developer, at least in part, of that information.” Indeed, Facebook is more of a developer than the website in Roommates.com in one respect because, even if a user did not intend to reveal a particular characteristic, Facebook’s algorithms nevertheless ascertained that information from the user’s online activities and allowed advertisers to target ads depending on the characteristic.

Facebook argued that it didn’t require advertisers to select impermissible discriminatory categories, but the court responds that “as in Roommates.com, Facebook identified persons in protected categories and offered tools that directly and easily allowed advertisers to exclude all persons of a protected category (or several protected categories).”

Finally, Facebook argued that its tools were “neutral” because they worked the same across all advertisers, not just housing advertisers. Citing some of Facebook’s marketing touting success stories by housing advertisers, the court tartly responds: “A patently discriminatory tool offered specifically and knowingly to housing advertisers does not become ‘neutral’ within the meaning of this doctrine simply because the tool is also offered to others.”

So what exactly did Facebook do to forego Section 230 protection? Apparently, Facebook provided options for ad targeting based on protected demographic criteria and segmented users into those demographic categories automatically. But would it have been enough to just provide the options without the automatic segmentation? This case seems to extend the Roommates.com approach that a website can lose Section 230 protection merely by asking the wrong questions, regardless of how the third party answers the questions.

Implications

I believe Facebook no longer permits the targeting at issue in this case, so this case may be a battle over legacy practices.

For me, the more vexing situation would have been if the advertisers had selected non-demographic characteristics, but Facebook’s algorithms nevertheless had caused the ads to be delivered on a discriminatory basis. In that circumstance, the advertisers wouldn’t have done anything wrong, so either Facebook added the “illegality” or no one is responsible for that consequence. Here, the court seems to be saying that Facebook would lose Section 230 protection just by giving advertisers targeting options, even if advertisers never selected them. Indeed, we don’t know yet if Vargas’ anecdote was attributable to how advertisers configured their ad campaigns. It remains possible that her differential experience was attributable to entirely unrelated factors–though the Ninth Circuit’s Section 230 exclusion would still apply regardless of causation.

As I mentioned in my prior post in this case, “Anyone rolling out self-service ad tools really ought to anticipate the potential discriminatory uses before launching the tools.” This opinion stands for the proposition that Facebook never should have offered housing advertisers the option to do demographic targeting. That principle seemingly extends to other heavily regulated industries, such as banking/finance.

Unfortunately, the court did not fully engage with many other cases holding that Section 230 applies to anti-discrimination claims. I don’t have a comprehensive list of cases, but some cases off the top of my head include Noah v. AOL, Elansari v. Meta,  NFD v. Harvard (“The CDA exempts certain laws from its reach. Federal and state antidiscrimination statutes are not exempted.”), Divino v. Google, Newman v. Google, Wilson v. Twitter, Chicago Lawyers Committee v. Craigslist, and of course the Roommates.com case itself (which held that Section 230 protected the “free-text boxes” from housing discrimination claims). The Ninth Circuit will surely revisit this issue in forthcoming appeals, including the Divino and Newman cases.

In my prior post, I also noted that “anything could happen” in the Ninth Circuit appeal. I was prescient, no? This case might be appropriate for en banc review by the Ninth Circuit, but anything still could happen in the Ninth Circuit. Will Facebook make that gamble?

Case citation: Vargas v. Facebook, Inc., 2023 WL 4145434 (9th Cir. June 23, 2023)