A federal appeals court has upheld the dismissal of a defamation lawsuit filed against ConsumerAffairs.com by Nemet Chevrolet Ltd., a New York City auto dealer.

Nemet, which operates Nemet Chevrolet in Jamaica, Queens, and other dealerships in the New York area, argued that statements published on the ConsumerAffairs.com Website were defamatory and claimed that at least some of the 49 complaints were created by the consumer site rather than by disgruntled customers.

In its notice of appeal, Nemet contended that U.S. District Court Judge Gerald Bruce Lee of the Eastern District of Virginia erred by dismissing Nemet's lawsuit and a subsequent amended complaint.

But in its opinion, the U.S. Court of Appeals for the Fourth Circuit said Nemet's pleading "does not show, or even intimate" that ConsumerAffairs.com contributed to the allegedly fraudulent nature of the complaints.

As to Nemet's claims regarding the alleged "drafting or revision" of complaints by ConsumerAffairs.com, the appeals court said it found the claims "threadbare."

ConsumerAffairs.com argued that it has immunity from defamation and tortious interference under section 230 of the Communications Decency Act, which was enacted by Congress to preserve the "vibrant and competitive free market" of ideas on the Internet.

'Victory for consumers'

"We are grateful to the Court for protecting our readers' right to free expression," said ConsumerAffairs.com President and Editor In Chief James R. Hood. "This is a victory for consumers who every year become more adept at sharing and seeking out mutually beneficial information through the Internet."

"We believe that our site, and the many other review, complaint and opinion sites on the Internet, serve as an invaluable asset not only to consumers but to businesses who seek to provide the highest possible levels of service and quality to their customers," Hood said.

Nemet had sought injunctive relief and $500,000 in damages and $1,500,000 in punitive damages.

The long-running case was not the first time Nemet has sued the consumer site. In July 2006, the company filed suit in New York Eastern District Court in Brooklyn. That case was dismissed Oct. 11, 2006 by Judge Brian M. Cogan.