Roommates.com Loses Summary Judgment on Remand, and Then Partially Settles

November 28, 2008 · by · in Content Regulation, Derivative Liability

By Eric Goldman

Fair Housing Council of San Fernando Valley v. Roommate.com, LLC, CV 03-9386 PA (RZx) (C.D. Cal. Nov. 7, 2008). Nov. 19 stipulation.

The Ninth Circuit en banc ruling in the Roommates.com remains one of the most noteworthy Cyberlaw developments of the year, but it didn’t end the case. In the April ruling, the court held that some aspects of the Roommates.com service did not qualify for immunization under 47 USC 230 and remanded the case back to the district court to determine if, in fact, there had been a violation of the Fair Housing Act (and the state law analogue) and whether the First Amendment applied.

However, the remand order, while facially neutral, did not provide a blank slate for the district court judge. The majority en banc opinion repeatedly described the service as illegal and referenced its illegality as a key part of the 230 analysis. While the Ninth Circuit didn’t conclude that Roommates.com should lose on remand, any district judge trying to avoid reversal on appeal really only had one way to go.

It’s not surprising, then, that Roommates.com principally lost its substantive case on remand. In a November 7 ruling, the court held that Roommates.com’s system violated the Fair Housing Act and the state law analogue, and Roommates.com was not eligible for constitutional protection (either the First Amendment or any right to intimate association). Consistent with the idea that the court only had one viable option, the court’s analysis is pithy and unforgiving.

After this ruling, the parties conducted a mediation and reached a settlement agreement that partially resolved the case (unfortunately, the settlement agreement wasn’t posted to PACER). The parties agreed on damages, including punitive damages, but didn’t resolve the plaintiff’s claim to attorneys’ fees. The parties also did not reach agreement on injunctive relief. As a result, the parties will go to trial on injunctive relief in January, and the plaintiff can ask for attorneys’ fees after that.