Judge Finds Big Flaws in Facebook Housing Bias Suit

A group of Facebook users fighting to sue the social media giant for housing bias must add more details on their efforts to find lodging through the platform before their lawsuit can advance, a federal judge said Wednesday.

In this March 29, 2018, file photo, the logo for Facebook appears on screens at the Nasdaq MarketSite in New York’s Times Square. (AP Photo/Richard Drew)

SAN FRANCISCO (CN) — An old journalism adage urges writers to include five details at the top of their stories: who, what, when, where and why.

On Wednesday, a federal judge imparted similar advice to a lawyer for a proposed class of Facebook users fighting to advance a housing bias suit against the social media giant.

“Your complaint’s going to need a lot more facts in order to establish standing,” U.S. District Judge William Orrick III said during a virtual court hearing.

Orrick said the lawsuit filed in August 2019 by lead plaintiff Rosemary Vargas lacks basic details, such as when Vargas searched for housing on Facebook, what she saw and how it differed from the results seen by her white male friend.

A second amended complaint claims Vargas looked for housing on Facebook using the same criteria as her male white friend but saw fewer results than he did. It also states that when Vargas included her use of a Section 8 housing voucher and her status as a veteran, the search produced no results.

Orrick found those allegations too lacking in specificity as to when the searches occurred and what search terms or parameters were used.

“I think those are significant issues with the way the case is currently pled,” Orrick said.

Vargas’ attorney Gerarde Mantese, of Mantese Honigman in Troy, Michigan, implored the judge to reconsider, arguing that Supreme Court precedent makes it easier to establish standing in housing discrimination suits. 

He cited the 1981 decision in Havens Realty Corp. v. Coleman, which found standing under the Fair Housing Act was established simply by showing an apartment complex owner lied to a Black person by saying no units were available while telling a white person there were vacancies.

“The mere exclusion, the mere segregation creates injury,” Mantese said.

Judge Orrick rejected the notion that the facts in that case were as detailed as those presented in the lawsuit before him.

“It’s very unclear to me what your client did,” Orrick said.

Mantese also cited the Supreme Court’s 1979 decision in Gladstone, Realtors v. Village of Bellwood, which held that Congress intended standing under the Fair Housing Act to extend to the full limits of Article III of the U.S. Constitution, which empowers courts to resolve civil and criminal cases.

Facebook attorney Rosemary Ring, of Munger, Tolles & Olson in San Francisco, replied that prior Supreme Court decisions say Fair Housing Act standing “extends to the full extent of Article III but not beyond it.”

Prior cases in which courts found standing under the Fair Housing Act included “very specific allegations” on interactions between the plaintiffs and defendants, she said.

After Mantese assured the judge his clients could add more details to their lawsuit, Orrick said he would dismiss the complaint with leave to amend.

Mantese requested permission to seek discovery from Facebook, saying the company’s data could reveal precisely when his clients searched for housing, what criteria they used and what results were produced.

Orrick said the plaintiffs must first show what they did in terms of searching for housing, and if any gaps exist in that knowledge, he will consider letting them seek data in Facebook’s possession.

“You have a lot of detail you could add that you haven’t added yet to make me get to the threshold of requiring jurisdictional discovery,” Orrick said. “Address the deficiencies I see, then we’ll take another look at it.”

Vargas filed her lawsuit a few months after Facebook agreed in March 2019 to change its advertising platform as part of a settlement to resolve five discrimination lawsuits filed against it in courts across the country.

Facebook vowed to carry out sweeping reforms that will prevent advertisers for housing, jobs and credit from excluding certain groups from seeing targeted ads. 

The changes are intended to prohibit discrimination based on race, national origin, ethnicity, age, sex, sexual orientation, disability, family status or other characteristics covered by federal, state and local civil rights laws.

One of the lawsuits, brought by the National Fair Housing Alliance and other groups in 2018, accused Facebook of “virtual redlining.” The groups ran an experiment that found the company let advertisers exclude families with children or women from seeing housing ads. The tools also allowed ads to be blocked for users with interests in disabilities or national origin based on their Facebook profiles.

Despite the settlement of those claims, the U.S. Department of Housing and Urban Development sued Facebook in March 2019, nine days after it resolved the five civil lawsuits filed against it. HUD claimed Facebook’s ad tools discriminated against protected groups on the basis of race, sex, national origin, religion, familial status and disability.

The lawsuit filed by Vargas and five other named plaintiffs seeks damages for Facebook’s alleged discriminatory conduct and an injunction to ensure it never again operates a “segregated housing marketplace through its advertising platforms.”

“While Facebook has claimed that it is committed to changing its illegal advertising practices, Facebook has yet to offer or pay any compensation to tens of thousands of users who were subjected to its discriminatory segregated housing marketplace over a period of several years,” the plaintiffs state in their lawsuit.

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