From Citizen Media Law Project:
the court held that Sinclair's complaint was facially invalid because it did not plead facts necessary to establish the court's subject-matter jurisdiction or personal jurisdiction over the pseudonymous defendants. In addition, the court ruled that Sinclair's defamation claims failed as a matter of law because he did not plead either actual malice or special damages, and because section 230 of the Communications Decency Act protected mzmolly and Owningliars for "simply summarizing and reporting information obtained from" a third party.Unfortunately, the bloggers weren't awarded any damages either.**
And Sinclair? The story has gone stale. He's still peddling his tales somewhere, but he's still not produced any substantiating evidence. Meanwhile, many of his followers have moved onto other Obama conspiracies (e.g., the birth certificate), and his attorney has been suspended in Washington DC and in Florida.
** A reader emailed the following correction: "the motion that was denied was to sanction Sibley (I think for filing motions while suspended, if I remember correctly). The bloggers could still theoretically ask for damages or lawyer's fees." Thank you, reader.
Added: I came to this news via the CMLP, but I'd like to note that The Regulator was the first blog to report the CMLP's report.