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Case 1 18 cv 02689 JGK Document 48 Filed 08 17 18 Page 2 of 31. TABLE OF CONTENTS,INTEREST OF THE UNITED STATES 1,PRELIMINARY STATEMENT 2. BACKGROUND 3, A Plaintiffs Allege That Facebook Classifies Its Users Solicits Demographic and Other. Preferences from Advertisers and Then Implements Those Preferences by Including or. Excluding Certain Users 3, B Facebook s Advertising Practices Become Public 6. C Facebook Amends Its Targeting Technology in 2017 7. ARGUMENT 9, PLAINTIFFS HAVE STATED A CLAIM AGAINST FACEBOOK FOR. VIOLATIONS OF THE FAIR HOUSING ACT 9,A The Legal Framework 9.
1 The Fair Housing Act and Implementing Regulations 9. 2 The Communications Decency Act 13, 3 Websites Are Not Entitled to Immunity Under the Communications. Decency Act When They Act As Content Providers 14, B Plaintiffs Have Sufficiently Alleged that Facebook Is a Content Provider Not. Entitled to Immunity Under the CDA 17, 1 Plaintiffs Allegation That Facebook Mines User Data to Create. Categories for Advertisers to Target or Exclude 17. 2 Plaintiffs Allegation That Facebook Invites Advertisers to Target. Certain Users Based on Unlawful Criteria 21, 3 Plaintiffs Allegation That Facebook Uses Its Algorithms to. Deliver Discriminatorily Targeted Ads 23,CONCLUSION 25.
CERTIFICATE OF COMPLIANCE 26, Case 1 18 cv 02689 JGK Document 48 Filed 08 17 18 Page 3 of 31. TABLE OF AUTHORITIES,CASES PAGE,Ashcroft v Iqbal 556 U S 662 2009 3. Atl Recording Corp v Project Playlist Inc 603 F Supp 2d 690 S D N Y 2009 19. Bragdon v Abbott 524 U S 624 1998 7, Brooklyn Center for Independence of Disabled v Bloomberg. 980 F Supp 2d 588 S D N Y 2013 1,Cabrera v Jakabovitz 24 F 3d 372 2d Cir 1994 9. Chicago Lawyers Comm For Civil Rights Under Law Inc v Craigslist Inc. 519 F 3d 666 7th Cir 2008 14, Cohen v Facebook 252 F Supp 3d 140 E D N Y 2017 16.
Cross v Facebook Inc 14 Cal App 5th 190 1st Dist 2017 16. Disabled in Action v Board of Elections of the City of New York. 752 F 3d 189 2d Cir 2014 1,Fair Housing Council v Roommates com LLC. 521 F 3d 1157 9th Cir 2007 13 16 18 19 22 24, Fair Housing Council v Roommate com 666 F 3d 1216 9th Cir 2012 15. Fed Trade Com n v Accusearch Inc 570 F 3d 1187 10th Cir 2009 21. Fed Trade Com n v LeadClick Media LLC 838 F 3d 158 2d Cir 2016 15 16. Force v Facebook 16 CV 5158 NGG LB 2018 WL 472807,E D N Y Jan 17 2018 16. Fraley v Facebook Inc 830 F Supp 2d 785 N D Cal 2011 3 17 19 20. Guevara v UMH Props Inc No 2 11 cv 2339 SHL tmp 2014 WL 5488918. W D Tenn Oct 29 2014 12, Herrick v Grindr LLC 306 F Supp 3d 579 S D N Y 2018 22. Housing Opportunities Made Equal v Cincinnati Enquirer Inc 731 F Supp 801. S D Ohio 1990 aff d 943 F 2d 644 6th Cir 1991 12 13. Case 1 18 cv 02689 JGK Document 48 Filed 08 17 18 Page 4 of 31. Klayman v Zuckerberg 753 F 3d 1354 D C Cir 2014 16. Martinez v Optimus Props LLC Case Nos 2 16 cv 08598 SVW MRW. 2017 WL 1040743 C D Cal Mar 14 2017 12, MCW Inc v Badbusinessbureau com L L C No CIV A 3 02 CV 2727 G.
2004 WL 833595 N D Tex Apr 19 2004 19, MHANY Mgmt Inc v Cty of Nassau 819 F 3d 581 2d Cir 2016 9. Perkins v LinkedIn Corp 53 F Supp 3d 1222 N D Cal 2014 21. Ragin v Harry Macklowe Real Estate Co 6 F 3d 898 2d Cir 1993 11. Ragin v N Y Times Co 923 F 2d 995 2d Cir 1991 11, Ricci v Teamsters Union Local 456 781 F 3d 25 2d Cir 2015 13 14. Rodriguez v Vill Green Realty Inc 788 F 3d 31 2d Cir 2015 11. Selevan v New York Thruway Authority 584 F 3d 82 2d Cir 2009 3. Twombly v Bell Atl Corp 550 U S 544 2007 3, United States v Hunter 459 F 2d 205 4th Cir 1972 11. United States v Space Hunters Inc 429 F 3d 416 2d Cir 2005 11. FEDERAL STATUTES AND REGULATIONS,28 U S C 517 1,42 U S C 3601 9. 42 U S C 3604 passim,42 U S C 3610 1,42 U S C 3612 1.
42 U S C 3614 1,47 U S C 230 2 13 14, Case 1 18 cv 02689 JGK Document 48 Filed 08 17 18 Page 5 of 31. 24 C F R 100 75 10,24 C F R 100 80 b 4 12,45 Fed Reg 57 104 Aug 26 1980 10. Case 1 18 cv 02689 JGK Document 48 Filed 08 17 18 Page 6 of 31. The United States by its attorney Geoffrey S Berman United States Attorney for the. Southern District of New York respectfully submits this Statement of Interest pursuant to 28. U S C 517 in support of Plaintiffs National Fair Housing Alliance Fair Housing Justice. Center Inc Housing Opportunities Project for Excellence Inc and Fair Housing Council of. Greater San Antonio Plaintiffs regarding the potential liability of defendant Facebook Inc. Facebook under the Fair Housing Act 42 U S C 3601 et seq. INTEREST OF THE UNITED STATES, Facebook s motion to dismiss involves significant questions regarding the application of. the Fair Housing Act FHA The Justice Department and the Department of Housing and. Urban Development share responsibility for the enforcement of the FHA See e g 42 U S C. 3610 3612 3614 The United States frequently files Statements of Interest in cases. concerning the applicability and interpretation of federal law in which it has enforcement. interests See e g Brooklyn Center for Independence of Disabled v Bloomberg 980 F Supp 2d. 588 641 n 9 S D N Y 2013 noting statement of interest filed in Americans with Disabilities. Act challenge to NYC emergency planning procedures see also Disabled in Action v Board of. Elections of the City of New York 752 F 3d 189 194 95 2d Cir 2014 noting appearance of. United States to propose remedial plan to address lack of accessible election facilities in. Americans with Disabilities Act case, On August 14 2018 HUD served an administrative complaint against Facebook for. conduct similar to that alleged in the First Amended Complaint Complaint alleging. violations of Sections 3604 a b c and f of the FHA. Case 1 18 cv 02689 JGK Document 48 Filed 08 17 18 Page 7 of 31. PRELIMINARY STATEMENT, The Complaint alleges that Facebook s classification of its users and its ad targeting tools.
permit landlords developers and housing service providers to limit the audience for their ads. based upon characteristics that Plaintiffs claim are outright prohibited by the FHA including. sex religion familial status and national origin and pretexts for protected characteristics These. allegations are sufficient to state a claim under the FHA. Facebook s argument that the Communications Decency Act 47 U S C 230 et seq. CDA immunizes it from the FHA rests on the faulty premise that it is merely an interactive. computer service To the contrary the Complaint sufficiently alleges that Facebook is an internet. content provider and that it may be held to account for that content Specifically the Complaint. alleges that Facebook creates and harvests user data to develop profiles for each user. categorizing them into groups based on demographics interests behaviors and other criteria. Facebook then solicits demographic and other audience preferences from advertisers and. implements those preferences using Facebook s proprietary algorithms to enable advertisers to. include some customers and exclude others The Complaint sufficiently alleges that for purposes. of housing advertisements the categorizing of Facebook users based on protected characteristics. and the mechanism that Facebook offers advertisers to target those segments of the potential. audience violate the FHA Facebook s motion should therefore be denied 1. Facebook has also moved to dismiss the complaint for lack of standing and to transfer. venue Br at 6 17 The Government expresses no view on these arguments. Case 1 18 cv 02689 JGK Document 48 Filed 08 17 18 Page 8 of 31. BACKGROUND, On a motion to dismiss under Fed R Civ P 12 b 6 the Court is obliged to accept the. well pleaded allegations of the Complaint as true and draw all reasonable inferences in the. plaintiff s favor See Selevan v New York Thruway Authority 584 F 3d 82 88 2d Cir 2009. The Court should not dismiss the complaint if the plaintiff has stated enough facts to state a. claim to relief that is plausible on its face Twombly v Bell Atl Corp 550 U S 544 547 570. 2007 the plaintiff satisfies this burden by pleading facts that support a reasonable inference. that the defendant is liable for the misconduct alleged see Ashcroft v Iqbal 556 U S 662 677. A Plaintiffs Allege That Facebook Classifies Its Users Solicits Demographic and Other. Preferences from Advertisers and Then Implements Those Preferences by. Including or Excluding Certain Users, Facebook is a well known social media platform that among other things permits each. user to create a personal profile to share information with others also on Facebook including. those designated by the user as friends who may be family friends acquaintances or people. whom the user has never met, As Plaintiffs allege advertising to its users is the core of Facebook s business model. While members join Facebook com for free Facebook generates its revenue through the sale of. advertising targeted at its users Fraley v Facebook Inc 830 F Supp 2d 785 790 N D Cal. 2011 Facebook offers to advertisers a number of different ways to engage with people on. Facebook the most important of which is the News Feed which displays an algorithmically. ranked series of stories and advertisements individualized for each person Comp 44. quoting Facebook Inc Annual Report for the Fiscal Year Ended December 31 2017 As a. result Facebook users see advertisements on their News Feeds interspersed between or. Case 1 18 cv 02689 JGK Document 48 Filed 08 17 18 Page 9 of 31. alongside postings from their friends and other Facebook users these users may or may not be. aware that advertisements have been targeted at them Plaintiffs allege that Facebook s greatest. advertising asset is its user base of over 2 billion people concerning whom Facebook has. collected a remarkable amount of information by harvesting the information that users. voluntarily post on their profile pages share with or receive from friends or unwittingly reveal. about themselves through for example their web browsing activity on and off Facebook and the. precise location from which they log into Facebook each time Comp 45 53. Plaintiffs allege that Facebook gathers collates and evaluates user data to categorize its. users across hundreds of demographics behaviors and interests which it then makes available to. advertisers by creating lists of users that share certain demographics behaviors and interests. which Plaintiffs refer to as a Facebook Pre Populated List Comp 52 53 55 2 Facebook. then prompts each advertiser to define the audience to which Facebook should target the ad by. including certain types of people and excluding others Comp 54 If an advertiser. decides that it does or does not want users with certain demographics to see its advertisement. the advertiser can include or exclude the users that share that demographic by clicking a. selection on a dropdown menu or by inputting criteria into a search box Comp 56 60 And. even before further limiting their audience through the dropdown menus advertisers can also. The phrase Facebook Pre Populated List appears to refer to both the lists of categories. on Facebook s include and exclude options as well as the lists of users that Facebook. maintains as belonging to each of those categories To the extent that different considerations. apply to each this brief will distinguish between lists of categories on the one hand and lists of. users on the other and apply the term Facebook Pre Populated List to both. Case 1 18 cv 02689 JGK Document 48 Filed 08 17 18 Page 10 of 31. exclude men or women from seeing their ads by selecting men or women on a toggle button. As the advertiser makes these choices a graph on the screen indicates how large or how small. the audience for the ad will be Comp 61 Using the results of its algorithms Plaintiffs. allege Facebook then delivers the ad only to the users that Facebook determines match the. preferences Facebook solicited from the advertiser Comp 69 Facebook charges advertisers. based on the number of users that view each ad, At issue in this litigation are two of Facebook s advertising functions entitled Boosts. and Ads Manager Plaintiffs allege that these functions make use of data aggregated by. Facebook from information supplied by users on their personal profile pages as well as. information inadvertently revealed by users such as their location or web browsing history to. target delivery of ads to users with or without particular traits or interests Comp 52 53. Plaintiffs allege that both Boosts and Ads Manager allow advertisers including landlords. developers and housing service providers to restrict which Facebook users will see their ads and. other posts based on criteria that are explicitly discriminatory and pretexts for characteristics. protected by the FHA, According to the Complaint Ads Manager allows advertisers to create and place new.
advertisements then click on a box to include or exclude the Facebook Pre Populated Lists of. desirable or undesirable customers Comp 69 70 Boosts allow a Facebook user typically a. business to publicize an existing post on its Facebook page and have Facebook circulate the. advertisement more widely to selected users by including or excluding audience members who. fall into the categories presented by the Facebook Pre Populated Lists Comp 64 68 As. alleged in the Complaint whether a landlord developer or housing service provider uses Boosts. or Ads Manager Facebook invites such advertisers to construct a desired audience by including. New York Thruway Authority 584 F 3d 82 88 2d Cir 2009 The Court should not dismiss the complaint if the plaintiff has stated enough facts to state a claim to relief that is plausible on its face Twombly v

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