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Infamous blogger of thedirty.com Nik Richie, has inked a deal with James McGinniss at McGinniss Associates for his memoir, ALWAYS JUDGE A BOOK BY ITS COVER, the story of how one man rose from an office cubicle to becoming the internet’s Larry Flynt. The headline making Richie is also embroiled in a ground breaking legal battle.

When people think of Kentucky, they think of fast horses and fine bourbon, not cutting-edge Internet cases. But what’s happening in a shocking legal battle currently pending in a Kentucky federal court could not only shut down www.thedirty.com, it may potentially have a devastating impact on thousands of U.S.-based websites, especially social networking and blogging sites that allow users to post comments and share ideas.

The case involves a lawsuit filed against Nik Richie by a Kentucky woman named Sarah Jones who was featured in several postings on www.thedirty.com in late 2009. In her lawsuit, Ms. Jones claims that these posts were defamatory and she’s asking the court to award her millions of dollars in damages against Nik Richie for “allowing” these posts to be published on his site.

Generally speaking, federal law strictly prohibits actions against website owners for material posted on their sites by third parties. Since this law was enacted in 1996, literally hundreds of courts have consistently ruled that websites which allow third parties to post content — like Facebook, Twitter, YouTube and Wikipedia – cannot be sued for false or defamatory content posted by a third party user of the site.

In the Kentucky case, the judge reached exactly the opposite conclusion, finding that Nik Richie could be held personally responsible for every single post submitted to his website. This ruling has the potential to drastically affect any and all websites that allow users to post comments – including sites such as Facebook — by exposing website owners to unlimited liability for material posted by third parties.

Experts in this area have been quick to condemn the Kentucky court’s decision, calling it “a troubling and probably lawless ruling.” The case will be immediately appealed to the Sixth Circuit Court of Appeals, which has authority over courts in Michigan, Ohio, Kentucky and Tennessee. The issues involved are so important, the case may eventually end up being heard by the United States Supreme Court.