California Man to Drop eBay Libel Claim
Mon Jan 27, 9:58 PM

LOS ANGELES (Reuters) - A Los Angeles man said on Monday that he will drop part of a libel lawsuit against eBay Inc. (NasdaqNM:EBAY - news) after the online auctioneer removed offending statements from the "feedback" section of its Web

Roger Grace, publisher of a Los Angeles legal newspaper, sued eBay and Hollywood memorabilia dealer Tim Neeley after the Web site operator refused to remove negative comments Neeley made after selling Grace six vintage entertainment magazines.

According to the Jan. 22 lawsuit, Neeley said Grace "should be banned from eBay," and was "dishonest all the way" for alleging in the online forum that the magazines he bought had arrived late and in a worse condition than advertised.

In his lawsuit, Grace demanded $2.5 million in punitive damages from eBay and $100,000 from Neeley. He also asked a judge to force the cyber auction house to filter words like fraud, liar and scam artist from the site or to warn users of that potentially libelous retaliation could result from a complaint against a seller.

On Monday, Grace contacted eBay attorneys, who said they were reviewing whether to remove Neeley's statements because they had had trouble contacting him.

When he checked the Web site later in the day, Neeley's feedback against him was gone, he said.

Chris Donlay, a spokesman for eBay, confirmed that the negative feedback had been taken down, but said that decision had "nothing to do with the lawsuit."

"We realized the contact information for the seller was not correct and that is one of the circumstances in which we will consider removing the feedback," Donlay said.

The action does not mean the company is changing its policy, he said. "Our policy stands," he said.

EBay attorneys had no reaction to the news that Grace would withdraw his libel claims, Donlay said. "We believe the lawsuit is completely without merit

Neeley said last week that Grace had unfairly maligned him first, and that he could not retract his own statements even if he wanted to.

Grace said he will "think over" whether to pursue his demand that eBay change the way it handles feedback, but planned to pursue his claims against Neeley.

"There are some problems with their policies," Grace said. "I have received scads of e-mails from people -- including somebody who was complaining there were comments about his performance in bed -- that they wouldn't take down."