• by Wendy Davis  @wendyndavis, June 15, 2010

Gawker Media has settled a libel lawsuit filed against Jalopnik by deleting a post alleging that Confederate Motors faced so many lawsuits that it couldn't conduct business in New York.

The auto blog also issued a correction backing away from the original item. No money changed hands as part of the settlement, says Gaby Darbyshire, Gawker's chief operating officer.

Gawker agreed to settle the case "because it was too trivial an issue to take to court," Darbyshire says. "One must pick one's battles," she adds.

The settlement resolves a dispute dating to April of 2009, when Jalopnik wrote that it was "surprising" to see Confederate at the New York Auto Show. "Last we heard the Alabama-based company was being sued so heavily in state courts by disgruntled owners that they were unable to do business here," the post continued, according to the court records.

The original item also said that Confederate's motorcycles "have proven so unreliable that you'll probably have to push them."

The correction states that Jalopnik doesn't "have any proof that Confederate is 'unable to do business' in New York," but doesn't address the motorcycles' reliability.

Last year, Confederate Motor asked Gawker to remove the post before filing suit. At the time, the site refused. In an email exchange that was attached to the lawsuit, Darbyshire told Confederate Motors' lawyer that nothing in the article was "a false statement of fact about the craftsmanship or performance of the bikes."

She added in the email that Jalopnik's post alleged only that Confederate had been sued in "state courts" -- not necessarily New York courts -- and referenced six cases filed in other states against the predecessor company Confederate Motorcycles Inc.

In May of 2009, Confederate Motors filed a libel lawsuit in the federal court in the Northern District of Alabama. Earlier this year a judge ruled that much of the post was opinion, but that one portion of the item was actionable. "The court must find that the last statement that the plaintiff "was being sued so heavily in state courts by disgruntled owners that they were unable to do business here," is more akin to a statement of fact than an opinion," U.S. Magistrate Judge John Ott wrote in a decision issued in March. "It is reasonably capable of a defamatory meaning."

The correction that was posted on Friday also notes that Confederate contends that a former employee provided Jalopnik with bad information. "Gawker Technology LLC and Jalopnik.com were unaware of this situation despite our usual due diligence regarding all articles published on our websites," the correction states.

But Darbyshire tells Online Media Daily that even had Jalopnik known that a source was a former Confederate employee, the site likely would have posted the item. "We always take the credibility of sources into account in our reporting, but we don't think it would have affected this post," she says.

Chance Turner, Confederate Motors' lawyer, says that the correction's language "satisfied" both sides, but that neither got exactly what it wanted.

The settlement was first reported by media expert Ben Sheffner on his blog CopyrightsAndCampaigns.