A district court should decide whether an Internet service pairing roommates violates U.S. fair housing laws by including categories such as straight or gay only, a federal appeals court ruled on Tuesday.

The Fair Housing Councils of San Fernando Valley and San Diego sued Roommates.com, alleging the Internet site violated the federal Fair Housing Act, which bars discrimination.

The case is the latest in which courts are grappling with the legal responsibility Internet operators have for content posted by others.

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Roommates.com has about 150,000 listings a day and includes drop-down menus for users to indicate they are willing to live with straight or gay housemates, among other categories.

A lower court did not review in detail the Fair Housing Act claims, but the U.S. 9th Circuit Court of Appeals said on Tuesday the court should consider the issue.

"While Roommate provides a useful service, its search mechanism and email notifications mean that it is neither a passive pass-through of information provided by others nor merely a facilitator of expression by individuals," Judge Alex Kozinski wrote for a three-judge panel.

"By categorizing, channeling and limiting the distribution of users' profiles, Roommate provides an additional layer of information that it is 'responsible' at least 'in part' for creating or developing."

"Whether these actions ultimately violate the FHA is a question the district court must decide in the first instance."

Among Internet content lawsuits now under review are whether Google Inc. (GOOG) online video sharing site YouTube is responsible for copyright infringement in user postings.

In a separate case last year, the California Supreme Court ruled that individuals who use the Internet to distribute information from another source may not be held to account if the material is considered defamatory.