updated 2/9/2006 9:55:25 PM ET 2006-02-10T02:55:25

A federal lawsuit accuses the online site Craigslist of violating fair housing laws by publishing discriminatory classified ads, reviving the question of what legal boundaries, if any, should exist for postings on the Internet.

But legal experts say the lawsuit against Craigslist, a fast-growing online network of classified ads and forums, faces an uphill battle because of laws in place to protect online service providers.

The lawsuit, filed by a Chicago fair housing group in U.S. District Court last Friday, contends that Craigslist's Chicago site distributed more than 100 ads that violated the federal Fair Housing Act by excluding prospective buyers or tenants on the basis of race, gender or religion.

Among the housing ads cited as objectionable by the Chicago Lawyers' Committee for Civil Rights Under Law Inc. were ones that read "NO MINORITIES," "Requirements: Clean Godly Christian Male," and "Only Muslims apply."

While it remained unclear Thursday if the suit is the first of its kind, it signifies a burgeoning effort by housing watchdog groups to extend to the Internet the same legal restrictions facing those that publish print classifieds.

"Our goal is to have the Internet places like Craigslist treated no differently than newspapers and other media who have traditionally been posting real estate advertisements," said Stephen Libowsky, a counsel for the housing group. "All of the gains are going to get lost if the same rules don't apply."

The nonprofit group is an affiliate of the National Fair Housing Alliance. Its Louisiana affiliate, the Greater New Orleans Fair Housing Action Center, recently filed a similar complaint against the hurricane relief Web site Katrinahousing.org, alleging it found 68 discriminatory housing ads.

San Francisco-based Craigslist, founded in 1995 as a roundup of local events, now has listings in more than 20 countries and 150 cities and runs 8 million new classified ads a month. Its huge scope means the Chicago case will likely be watched closely by other online sites. EBay Inc. owns 25 percent of Craigslist.

A ruling against it "would have a chilling effect on the Internet and what it was intended to provide, and that is an open forum and free expression," said Melissa Klipp, a Florham Park, N.J.-based attorney who practices Internet law.

The lawsuit seeks, among other things, to require Craigslist to report to the government any individual seeking to post a discriminatory ad and to develop screening software to preclude discriminatory ads from being published on its Web site.

Craigslist, which has 19 employees, maintains that screening its almost-nonstop classified listings would be impossible. Jim Buckmaster, its chief executive officer, said Thursday that the system is automated and that users can flag postings. If enough do, it comes off automatically. The "NO MINORITIES" ad was removed within two hours, he said.

"We admit that one or two postings per 100,000 are discriminatory," Buckmaster said. "But we feel we're in the forefront of promoting fair housing for everyone."

The site last month added a yellow link on each housing ad warning that "Stating a discriminatory preference in a housing post is illegal." When clicked, users get information about the Fair Housing Act and guidance on how to write ads that comply.

Several Internet law experts said the suit seems likely to fail, citing a 1996 federal law that says an online service provider isn't considered a publisher or a speaker when it merely passes along information provided by someone else.

Jennifer Rothman, a law professor at Washington University in St. Louis, called it "a complete nonstarter" despite legitimate concerns about discrimination.

"Congress decided it was more important not to chill speech on the Internet and not to shut down these Internet providers," she said. "If you start holding them responsible, essentially you shut down the business."

"From a moral standpoint, of course, people will expect that if you're going to run a site like that you ought to police it," said Houston-based attorney Jeff Diamant. "But all Craigslist is doing is running a forum for people to communicate."

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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