Tax attorney Ellen Batzel regrets the day she hired Bob Smith to work on her Asheville, N.C., home. “I hired him to be a handyman,” she says. “I wanted someone to repaint and refinish the floors: odd jobs.”

At first, that’s what she got: Smith did the floors in a few weeks in July 1999. But soon their relationship soured, leading first to a small-claims lawsuit over payment for the repairs, and ultimately to a multimillion dollar federal lawsuit that involves charges of Nazi war looting — and raises fundamental questions about Internet libel law.

In an act that has legal repercussions today, Smith (who could not be reached for comment for this story, despite extensive efforts to reach him by phone and e-mail) apparently fired off an e-mail to Ton Cremers, the solo operator of the Museum Security Network, a Netherlands-based non-profit that tracks news of art theft, looting and forgery. Cremers’ e-mail newsletter reaches about 1,000 readers worldwide — a small but hardcore group of museum security professionals, curators, art historians, art dealers, art collectors, lawyers, law enforcement officials and journalists.

In the e-mail, dated Sept. 8, 1999, Smith identified himself as a building contractor in Asheville, and Batzel as his client. The e-mail then linked Batzel to the Nazis. “[Batzel] bragged to me about being the grand daughter of ‘one of Adolph Hitler’s right-hand men.’ At the time I was concentrating on performing my tasks, but upon reflection, I believe she said she was the descendant of Heinrich Himmler,” it alleged, adding, “Ellen Batzel has hundreds of older European paintings hanging on her walls, all with heavy carved wooden frames. She told me she inherited them. I believe these paintings were looted during WWII and are the rightful legacy of the Jewish people.”

The e-mail included Batzel’s address and Smith’s phone number, information that Cremers left intact when he distributed the e-mail to Museum Security Network subscribers on Sept. 9.

Several readers, outraged by the posting, shot off critical e-mails to Cremers. He promptly published them, beginning on Sept. 11 with a posting from Christopher Atkins, a media licensing coordinator at the Museum of Fine Arts in Boston:

“Mr. Smith is completely out of line for suggesting that some woman with old paintings in her home has amassed a collection of paintings from Nazi war booty. His claims, evidence and assumptions were ridiculous, and he was very disrespectful of this woman’s privacy in offering this woman’s address.” Atkins concluded by admonishing Cremers: “I think it was wrong for you to take this man’s story seriously. Please respond.”

Cremers replied in the same newsletter (and soon struck Batzel’s address from the archived version of the e-mail). “I do share your opinion about the quite odd contents of this message,” he wrote. “However, I am convinced that most of our subscribers have enough common sense to see the difference between sane and insane… In this case I have not chosen to behave as a censor. I hate to do that anyway. I must admit that my decision to forward Mr. Smith’s message may have been wrong. What is worse: forwarding messages with strange contents or censor[ing] messages?”

Another Museum Security Network reader, Earl Merkel, warned Cremers that he could be sued for libel. Merkel criticized Cremers for jeopardizing the credibility of the forum “by blithely passing along what are, without dispute, unsubstantiated rumors. You may also risk legal consequences, if your act of ‘publishing’ this woman’s name and address causes her damage. By no definition is she a ‘public figure’ who can usually be libeled with impunity as long as no ‘malice’ can be proven. At the very least, you owe this woman an apology; at worst, you may end up owing her much of what you personally own.”

Merkel’s warning was prophetic. Though Batzel says she and Smith eventually settled their dispute over the home repairs (she says she gave Smith $250, a ladder and some halogen lamps), the e-mail’s allegations have led to a multimillion-dollar lawsuit. Batzel, who now lives in Los Angeles, is suing both Smith and Cremers in federal court for $10 million in defamation, invasion of privacy and intentional infliction of emotional distress. And while the suit against Smith is relatively conventional, the one against Cremers — which could reach court by the end of this year — tests the cutting edge of Internet legislation.

Should a Web site based in the Netherlands be subject to the laws of every country in which it has readers? Should the landmark 1996 Telecommunications Act, which protects Internet Service Providers like AOL from libel in the case of third-party postings, also cover an e-mail newsletter that publishes unedited letters and press clippings? And what future is there for a one-man publishing operation that may have just enough resources to make editorial judgments, and errors of judgment, but too few for legal safeguards like fact-checking?

Batzel did not learn about the e-mail until four months after it was posted, but she says that the false statements damaged her career. According to her complaint, filed in September, 2000, Batzel has a Nazi-free lineage and an art collection acquired from “reputable dealers,” but suffered from Smith’s allegations to the contrary. She “lost as clients one prominent Jewish family” and was the victim of a letter-writing campaign to have her disbarred. (The campaign was unsuccessful and its author has not been identified.)

“I had to sell my home in Asheville,” says Batzel from Los Angeles. “Once this came out, I was afraid to be there. As someone in the district attorney’s office told me: If the real neo-Nazis find you, we’ll never find your body; if the wannabe neo-Nazis find you, we will find your body.”

Or, as Batzel’s attorney Howard Fredman puts it, “Before taking this case I had to ask myself: Has my client really been hurt? Is this all going to go away if we just ignore it? Then she showed me the letters seeking to have her disbarred. One traditional reason for defamation suits is to clear your reputation.”

While Fredman seeks to clear his client’s name, Stephen Newman of Latham and Watkins in Los Angeles, which represents Cremers on a pro bono basis, is trying to salvage his client’s career. Cremers, who says he “does not make a penny” from the Museum Security Network, recently lost his salaried job as the security manager for the Rijksmuseum in Amsterdam. He was asked to leave in March, after 13 years of service.

As Cremers recounted over the phone, in an energetic Dutch accent, “The museum director reacted very sympathetically when I first informed him about the possibility of libel, but the plaintiff has been harassing the museum, sending them letters, trying to involve them in the lawsuit. It’s very intimidating.”

Batzel’s attorney admits that his team, “under the impression that the Rijksmuseum was formally affiliated with and supported the Museum Security Network,” contacted the Amsterdam museum at one point. But he stresses that the museum was not named in the suit.

Cremers also says that cultural differences cloud the issue. “In our country we are not used to this sort of litigation. If this happened in the Netherlands, I don’t think any court would accept the case. But if they did, I might be asked to apologize and fined $2.”

Cremers and his attorney have asked that the case be dismissed on four grounds, three of which have been denied.

One argued, unsuccessfully, that Cremers, a citizen of the Netherlands with no real business in California, rests far outside the court’s jurisdiction. Another failed attempt at dismissal asserted inconvenience of forum. The third, also denied by the judge, identified Cremers as an Internet service provider, which under the 1996 Telecommunications Act would protect him from libelous statements made by third-party “content providers” using his service. The final motion, and the only one still pending, uses a California free speech act known as “anti-SLAPP” to try to force the plaintiff to produce more evidence. A ruling is expected by August.

If the suit does reach court, some pretrial arguments are likely to be revisited. First, there’s the question of location: are U.S. libel laws applicable to an e-mail newsletter that’s generated in the Netherlands but that reaches some U.S. readers? And, for that matter, are they enforceable? Then there’s the issue of retraction, a common mitigator in defamation cases. After posting Smith’s e-mail, did Cremers make a sufficient retraction and apology?

But what really has the attorneys talking is a single point of law: whether the Museum Security Network qualifies as an Internet service provider, which would give it immunity from libel under the 1996 Telecommunications Act.

A key precedent in this issue is Zeran vs. AOL, 1997. In a chat room operated by America Online, an unidentified visitor had posted a prank note identifying Kenneth Zeran as a seller of “Oklahoma City Bombing” T-shirts. After being barraged by angry phone calls, Zeran sued. AOL won, on the grounds that the allegedly libelous material was posted by a third party.

Newman cites the ruling when discussing Batzel’s suit against Cremers. “Even though AOL is a classic ISP in terms of connecting you to the Internet,” he says, “it does a lot more: maintaining forums and channels. In this particular case, AOL had stepped out of the role of being pure ISP provider, but the court still applied statutory immunity.” Newman completes the analogy by saying that the Museum Security Network too represents an “open forum for information” that deserves protection under the law.

But Batzel’s lawyer sees things differently. “My reading of the case is that if all you do is provide a bulletin board, it’s unlikely that there’s any liability,” says Fredman. “On the other hand, if you are carefully deciding what goes on the newsletter and adding headlines and comments, there is no exoneration of responsibility.”

In other words, both sides recognize the legal distinction between a “content provider” (a publisher which is liable for content) and an “ISP” (a platform for third-party publishing which, so far, anyway, is not). The question is: Which category does the Museum Security Network fall into?

Newman argues that the Museum Security Network qualifies as an ISP for legal purposes because it offers a neutral forum for the third-party exchange of news and information. Fredman counters that the Network is more of a content provider, since Cremers has a hand in the selection process and posts an occasional moderator’s note.

Along with testing the boundaries of Internet case law, this issue strikes at the heart of the Museum Security Network’s enterprise. If Fredman is right, Cremers’ involvement with the newsletter will leave him vulnerable in a court of law. But it’s precisely this human touch that readers appreciate. Cremers was honored by the Smithsonian this year for launching the site; his involvement in the newsletter clearly adds value over the automatic news alert that, say, a software program could generate.

Even Cremers’ loudest critics, who were quick to question his publishing of Smith’s letter, sound supportive. When contacted for this story, Atkins at the Museum of Fine Arts in Boston said he used to read the Museum Security Network for “articles on art sales, art theft, art smuggling, art forgeries, etc. from all over the world. … As an added bonus, I found that there was a lot of contribution from a cast of regular characters and others who happened upon the site for professional advice and suggestions. I thought that it was a great site and a friendly atmosphere.”

Merkel, a partner in a Chicago public relations firm who just sold a novel on Nazi-looted art to Penguin, agrees. While he reiterates his warning to the Museum Security Network about “serving as ‘cop on the beat,’” he also praises the newsletter as “a valuable tool, particularly for helping alert museum security professionals to the ongoing news of art thefts — more occur than you might think.”

Cremers himself received similar endorsements this March, when he asked his readers for feedback on the service. He was overwhelmed by the response: “Within two days, I heard from 176 subscribers from all over the world, from UNESCO to ICOM (International Council of Museums) in Paris,” he says. Almost all comments were raves.

Whether or not the endorsements help Cremers’ case, they do underscore the ambitiousness, and vulnerability, of his project. The international black market for art and antiques is sprawling (recent estimates put it at $6 billion to $10 billion annually, almost as large as the legitimate art market), and tracking the stolen goods is no easy feat. A news bulletin about stolen art is the kind of service that the Internet in general, and the Museum Security Network in particular, was born to deliver.

Now, saddled with the defamation lawsuit, the Museum Security Network’s strengths have become liabilities. Cremers’ involvement in the site could prove his Achilles’ heel, suggesting that an automated service is safer. Likewise, the newsletter’s international reach could pull the Netherlands citizen straight into U.S. federal court, suggesting that the Web venture would do better to keep its readership low and local. While the lawyers debate the definition of an ISP, the future of Cremers’ newsletter — and with it one model for online publishing — hangs in the balance.

I live in Manhattan. I work at an art magazine that sends me into auction houses, fashion houses and galleries on a regular basis. And I have not seen a pair of Manolo Blahniks since Sept. 11.

One Manolo disciple I know is wearing a pair of flat-as-a-pancake Tods; the women who work at Chelsea galleries are sporting military-inspired shoes and boots by Prada and Gucci; and my most adventurous shoe-shopping friend, who happens to be a corporate lawyer, is wearing Pumas to the office. As I write, I’m wearing a pair of plain black Max Mara loafers.

The bitch is back.

Once again, VH1 has gathered together for one concert a handful of the most “demanding, dramatic and often outrageous” singers ever to share — or monopolize — center stage.

Back in 1998, the middle-of-the-road music video channel launched its divas series by bringing together Mariah Carey, Celine Dion, Gloria Estefan, Aretha Franklin and Shania Twain. The second concert, in 1999, featured Brandy, Cher, Whitney Houston and Tina Turner. Tuesday night, VH1 broadcasts “Divas 2000: A Tribute to Diana Ross,” with Carey, Faith Hill, Ross and Donna Summer.