• by Wendy Davis , Staff Writer @wendyndavis, June 14, 2011

In a sweeping ruling, New York's highest court ruled today that Web site operators can't be sued for libelous posts submitted by users even if those posts are edited or promoted by the site.

The 4-3 decision dismissed a defamation lawsuit brought by Ardor Realty Corp. head Christakis Shiamili concerning disparaging comments that appeared online. The comments -- including statements alleging that Shiamili "screws his agents over on commission," that his company "can't retain anyone," and that he makes anti-Semitic and racist remarks -- were posted on a blog run by an employee of the rival realty company Real Estate Group of New York.

One comment referred to an agent as "his token Jew." Shiamili alleged that the blog administrator made that comment a "stand-alone post" and gave it the headline "Ardor Realty and Those People," and the sub-head, "and now it's time for your weekly dose of hate, brought to you unedited, once again, by 'Ardor Realty Sucks'. and for the record, we are so. not. afraid," according to the court's opinion.

The opinion additionally noted that the post carried "a traditional image of Jesus Christ with Shiamili's face and the words, 'Chris Shiamili: King of the Token Jews.' "

Although the four judges in the majority said the statements were "unquestionably offensive and obnoxious," they also ruled that the site operator was immunized by Section 230 of the Communications Decency Act. That law provides that sites aren't responsible for material uploaded by users.

The judges specifically ruled that site operators don't lose that immunity by performing traditional editorial tasks like promoting posts.

Shiamili had attempted to argue that a federal appellate court's controversial decision in a lawsuit against Roommates.com supports the view that Web site owners can be liable for "developing" unlawful content, even if they don't author it themselves. In that case, the 9th Circuit Court of Appeals ruled that a roommate-matching site could be sued for violating discrimination laws because it actively solicited allegedly unlawful information.

But the New York court rejected that reasoning on the ground that the site operator didn't develop the posts disparaging Shiamili.

Three judges dissented, largely because the image attached to the post, along with the tagline "Chris Shiamili: King of the Token Jews," was allegedly created by the site operator and not the user who submitted the original post.

This case marks the first time that New York's highest court has ruled on the scope of the Communications Decency Act's immunity provisions. The broad ruling sends an unmistakable signal to trial court judges, that they should promptly dismiss libel cases against Web publishers who have allowed users to post questionable comments.