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The service providers--ISP's-consider themselves pretty safe. I don't think anyone's going to be going after them. From what I've heard, they pretty much ignore any/all complaints of this nature, I don't think they're liable for what a customer posts on the net. Whether that's right or wrong, they just don't care. Of course in cases such as child porn they have to pay attention.

I wonder why Yahoo just didn't delete the offensive posts for her.

Cyberspace laws are still pretty weak. Free speech is valued over all else, to the detriment of privacy and reputation. Just speaking objectively it's unlikely she will win this. Even in cases of libel lawyers are reluctant to go forward; it has to be proved that the persons rep was damaged.

I feel sad for her but a little thing like this will go nowhere. It has to be huge. That she even got a willing lawyer is incredible to me. She has an absolute right to be upset I say I think it has to be way much more extensive than this.
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