Craiglist Case and the Significance to the MLS

By
Thomas N. Jacobson
The Law Offices of Thomas N. Jacobson
and
John Rees
Callister Nebeker & McCullough

March 24, 2008

The recent decision by the 7th Circuit Court of Appeals relating to whether craigslist is responsible for derogatory and discriminatory ads placed with its online service provides an interesting insight into the future of similar types of online sites.

Craigslist is an online website where people can list almost anything, including real property opportunities, such as rentals and the sale of property. Craigslist has virtually no rules relating to content and does not perform any editorial function.

Some of the recent listings on craigslist have included such items as rentals of real property setting forth certain conditions relating to the gender, ethnicity and other profiles of the renter. Not too surprising, given the diversity of people in our country, some people boldly proclaim they will only rent to "Good Christian Males" while others make no apology for proclaiming "Whites only".

Craigslist has contended it is not a republisher and does not screen listings. It contends it is merely an online service providing "interactive computer services". The 7th Circuit Court of Appeals agreed with craigslist and found craigslist was no more responsible for the discriminatory postings than a phone company, courier service, or the computer manufacturers that built the machines used to transmit the discriminatory posts.

This has profound significance for the MLS industry because MLSs have often found themselves in the position of a republisher of information and responsible to some extent, if not all, for the content. The question that obviously arises is whether an MLS is now able to take advantage of the craigslist case.

The answer may not be so simple, because there is a substantial distinction between what craigslist does and what is done by the MLS. Craigslist does not act as a data technology company. The listings found on the craigslist site are posted by the individuals seeking to disseminate their information, and the formatting, rules and other prerequisites are minimal. On the other hand, in the MLS, the information sought to be inputted is subject to a comprehensive set of rules and regulations. In several states, such as California, there are statutes that specifically define an MLS and its function. It is set up to be a republisher of information and there is considerable control over what is allowed to be published and under what conditions.

The MLS also takes ownership of, or has a license to use, the information and establishes a proprietary right to some of the MLS content. Unlike craigslist, MLSs have worked for years to preserve the right of the MLS or brokers to copyright the content and to control the use and dissemination of the content. The act of taking ownership of the MLS content, or accepting a license to use the content, establishes a requirement of responsibility for the form and substance of the content.

As MLSs become more involved in data management, the MLS content becomes more and more under the control and auspices of the MLS. The content is managed to provide users with many additional services not available ten years ago. These services include arranging the data into specific groupings, mapping and other services. Craigslist makes no attempt to manage its listings in such a fashion.

The lesson from the craigslist case is found in the losing argument. There are many groups promoting fair housing and enforcement of the civil rights laws. They are constantly watching organizations that handle real property information to assure there are no violations of existing laws relating to discrimination in housing. The craigslist case demonstrates there is an element in our society that continues to discriminate in the housing market and if those people are willing to be as brazen as they have been when entering listings on craigslist there is every reason to suspect they will try to convince their agents to make similar attempts when filing listings with the MLS.

MLSs should be proactive in assuring that discriminatory language does not creep into remarks sections, or is present even by innuendo in MLS listings. Real estate organizations have taken a strong stance against any form of discrimination or steering and the craigslist case establishes that there are still many people that will attempt to discriminate in housing. Litigation is expensive and MLSs should have a proactive preventive policy to police the enforcement of fair housing laws and regulations.

If you have any further questions on this subject please do not hesitate to contact us.