A Chicago fair housing group has sued groundbreaking Web site Craigslist for allegedly publishing discriminatory advertisements, a case that could test the legal liabilities of online ad venues, the Chicago Tribune reported.

The Chicago Lawyers Committee For Civil Rights Under Law sued San Francisco-based Craigslist, claiming that during a six-month period beginning in July, the site ran more than 100 ads in Chicago that violated the federal Fair Housing Act, reports said.

The suit is part of an emerging attempt by housing watchdogs nationally to hold online classified sites to the same strict standards as the publishers of print classifieds, such as newspapers.

In October 2005, Inman News reported that the U.S. Department of Housing and Urban Development was reviewing complaints of Internet-based real estate postings that may violate the federal Fair Housing Act.

While there are established cases in which newspapers have been found liable for printing ads that are deemed in violation of the federal act, the department is treading in new territory as it considers the wide range of Web sites that carry real estate information.

Some Web sites are passive forums that allow users to post real estate information, for example, while other sites may play a more direct role in preparing and publishing the listings information online.

The Chicago suit is potentially significant because it suggests that the rules for an Internet site should be the same as for a traditional publisher, in which every ad should be vetted to conform with the law, reports said.

The committee that filed the suit, a public interest consortium of the city’s leading law firms, said in a federal suit that those ads discriminated on race, religion, sex, family status or national origin, reports said.

Among the ads cited in the suit: “Non-women of Color NEED NOT APPLY”; “African Americans and Arabians tend to clash with me so that won’t work out”; and “Requirements: Clean Godly Christian Male,” according to reports.

Craigslist acknowledges that completely screening its vast classified listings–which range from babysitters seeking work to people selling tickets to White Sox games–would be “physically impossible,” Jim Buckmaster, Craigslist’s chief executive officer, told the Tribune in an e-mail interview Tuesday.

The site doesn’t pre-screen or approve ads, Buckmaster told the Times, and 8 million new classified ads are submitted each month.

Craigslist does have a system in which its own users can flag inappropriate or illegal ads for removal. Such inappropriate ads are quickly removed, Buckmaster said, according to reports.

Housing-oriented listings on the site now carry a notice at the top, “Stating a discriminatory preference in a housing post is illegal – please flag discriminatory posts as “prohibited.”

The site, founded 10 years ago by computer programmer Craig Newmark, is remaking the classified-ad business. Once a listing of services for San Francisco residents, Craigslist now covers the nation and has helped erode the print classifieds business at newspapers.

Craigslist charges employers for help-wanted listings in three cities: San Francisco, Los Angeles and New York. But the rest of its ads are free. Last week, craigslist announced that it will begin charging a $10 fee for broker apartment listings in New York City in March.

The privately held company, which has 19 employees, does not disclose its revenue, and estimates vary.

But one 2004 study by consultant Classified Intelligence said the Web site has cost San Francisco Bay Area newspapers $50 million to $65 million in annual revenues for employment ads.

Buckmaster told the Tribune the site is “very concerned about discrimination in housing ads.”

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Send tips or a Letter to the Editor to janis@inman.com or call (510) 658-9252, ext. 140.

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