A federal judge has tossed out a lawsuit against Craigslist, saying the online classified site is protected from liability even if the housing ads it carries are discriminatory.

In dismissing the case, U.S. District Judge Amy St. Eve ruled that Craigslist serves as an intermediary party, not a publisher, and that federal law protects Craigslist and other sites that allow users to post unedited messages and communicate freely in forums.

The Supreme Court struck down key provisions of the 1996 Communications Decency Act, which criminalized putting adult-oriented material online where children can find it, but the section granting online service providers protections from liability remain intact.

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The protection was affirmed Monday when the California Supreme Court, citing that law, ruled that Web sites cannot be sued for libel for publishing inflammatory information written by other parties.

That's not to say judges necessarily like the protections.

In the California case, Associate Justice Carol A. Corrigan wrote that "the prospect of blanket immunity for those who intentionally redistribute defamatory statements on the Internet has disturbing implications."

Last week, St. Eve said "near-unanimous case law" shields sites like Craigslist, even though she thought that case law has been applied too broadly.

"Congress did not intend to grant a vast, limitless immunity," St. Eve wrote.

A consortium of Chicago attorneys had accused Craigslist of violating federal housing laws by running more than 100 ads that excluded potential buyers or tenants on the basis of race, gender or religion. St. Eve did not rule on the merits of those charges.