9th Circuit Reversal of Civil Rights Ruling vs. Facebook a 'Major Victory:' Free Press

Facebook’s conduct was “discriminatory and exacerbated the persisting effects of historic discrimination,” said The Free Press Friday, hailing the 9th U.S. Circuit Court of Appeals’ 3-1 reversal of a lower court’s ruling in a civil rights case that Facebook was immune from liability under Section 230 protection of the Communications Act.

Plaintiffs Rosemarie Vargas, Jazmine Spencer, Kisha Skipper, Deillo Richards and Jenny Lin sued Facebook for its advertising targeting methods that “provide tools to exclude women of color, single parents, persons with disabilities and other protected attributes,” so plaintiffs were “prevented from having the same opportunity to view ads for housing” that Facebook users who aren't in a protected class received, said the 9th Circuit’s Friday memorandum (docket 21-16499).

The 9th Circuit’s decision aligns with arguments made by The Free Press, the American Civil Liberties Union, the Lawyers’ Committee for Civil Rights Under Law and the National Fair Housing Alliance in an amicus brief in support of plaintiffs. Vargas claimed Facebook had excluded her based on her ethnicity from seeing certain real-estate ads. The 9th Circuit said she sufficiently alleged Facebook’s conduct injured her by denying her equal treatment.

The appeals court decision is “a major victory for digital civil rights against the array of ways that platforms have tried, for far too long, to evade accountability for their own discriminatory practices,” said Nora Benavidez, Free Press director of digital justice and civil rights. “Facebook has tried to argue that it’s simply a passive transmitter of information to users on its services,” but the 9th Circuit “rightly found that a claim exists when someone alleges Facebook’s creation and implementation of algorithms and ad platforms deny specific users equal experience and opportunity online," she said.

The district court erred by dismissing the operative complaint for failure to allege a concrete injury sufficient to confer Article III standing, said the 9th Circuit’s memorandum. The district court faulted the complaint for not identifying specific ads that Vargas didn't see, but her claim is that Facebook’s practices concealed information from housing-seekers in protected classes, said the memorandum: “Nothing in the case law requires that a plaintiff identify specific ads that she could not see when she alleges that an ad-delivery algorithm restricted her access to housing ads in the first place.”

The district court also erred in saying Facebook is immune from liability under Section 230, said the ruling. Plaintiffs’ claims challenge Facebook’s conduct as a “co-developer of content and not merely as a publisher of information provided by another content provider,” it said, noting Facebook created an ad platform that advertisers use to target ads to categories of users. Facebook selected the categories, then determined which categories applied to each user, it said. “Facebook knew that Plaintiff Vargas fell within the categories of single parent, disabled, female, and of Hispanic descent.” Facebook “created the categories, 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,” it said.

In his dissent, U.S. Circuit Judge John Byron Owens asserted plaintiffs’ theories of injury -- denial of truthful information, the opportunity to obtain a benefit, the social benefit of living in an integrated community, and stigmatic injury -- depend on having been “personally discriminated against by at least one housing advertiser that used Facebook’s Ad Platform.” To survive a motion to dismiss, plaintiffs would need to “plausibly allege that a housing ad that would otherwise have appeared in their News Feeds or in their search results on Facebook Marketplace did not appear because the advertiser used Facebook’s Ad Platform to exclude their protected class.”

For each named plaintiff, the third amended complaint “does not identify any such ad or advertiser,” nor does it allege facts supporting an inference that housing discrimination is “plausibly the reason” plaintiffs couldn’t find housing ads meeting their search criteria, said the memorandum. “Plaintiffs have alleged nothing to exclude the possibility that suitable housing was not available or not advertised on Facebook.” Facebook didn’t comment.