Court Forecloses on Consumers’ Facebook Ad Housing Discrimination Case

According to an opinion issued last Friday, a class action stating Fair Housing Act and analogous California and New York law claims against Facebook Inc. has been dismissed for failure to plead facts establishing standing. The case concerned allegations that the social media platform previously allowed advertisers to hand select audiences for their paid housing advertisements, thereby excluding protected classes of consumers from seeing those particular housing ads.

This week’s opinion dealt with the plaintiffs’ third amended complaint filed in March 2021. Judge William H. Orrick explained that he dismissed the first two pleadings without prejudice and with instructions for the plaintiffs to submit additional details. Specifically, he asked that the users plead facts showing that they were “injured by any housing advertiser’s possible use of Facebook’s now-discontinued targeting criteria that could be used to direct paid ads at specific categories of persons.”

The court found the latest iteration of the complaint deficient in so far as the plaintiffs alleged that they each used Facebook to search for housing based on selected criteria and that no fitting results were returned, but nothing further. Judge Orrick explained that he found fault with the filing because the plaintiffs assumed several conclusions without pleading the requisite underlying facts. First, they presumed that their searches were fruitless because unidentified advertisers used Facebook’s targeting ad tools to exclude them based on their protected class statuses, and second, that ads were available and would have otherwise met their criteria, the court said.

Judge Orrick also found that Section 230 of the Communications Decency Act independently barred the plaintiffs’ claims. The defense provision “‘immunizes providers of interactive computer services against liability arising from content created by third parties.’” 

The court found that based on the facts before it, Facebook’s ad tools were neutral and that they simply provided “‘a framework that could be utilized for proper or improper purposes.’” As such, Section 230 shielded Facebook from liability even if the plaintiffs adequately pleaded their discrimination claims.

The consumers are represented by Mantese Honigman P.C., Hertz Schram PC, and Schonbrun Seplow Harris Hoffman & Zeldes LLP. Facebook is represented by Munger, Tolles & Olson and Conrad | Metlitzky | Kane.