Case closed? Hardly. The Blumenthals also demanded that cybercolumnist Matt Drudge reveal his sources–or else. When he didn’t, the couple filed a $30 million defamation suit against Drudge and America Online, Inc., which carries the ““Drudge Report’’ on the World Wide Web. Lawyers for Drudge and AOL are scheduled to respond this week in a case that could make legal history. The Supreme Court has already ruled that the First Amendment applies in cyberspace. But if AOL is found liable for Drudge’s report, the case could redefine the responsibility online providers have for their Internet subscribers. The Blumenthals claim AOL is liable as Drudge’s publisher since the company paid him to provide the column and even promoted his ““hiring’’ in a press release. AOL will argue it was only ““a passive carrier’’ of Drudge’s material–a standard courts have so far upheld. The question: did AOL act as the magazine–or merely the newsstand owner?

Fingering the source in Blumenthal v. Drudge has become a Washington parlor game. Blumenthal, a journalist who wrote unflattering portraits of right wingers for years, has no shortage of political enemies. The false wife-beating allegation was ““idle party chatter for a long time,’’ says John Fund, an editorial writer at The Wall Street Journal. (Fund denies being Drudge’s source.) Blumenthal is not very popular among liberals, either. When Blumenthal, who had long written pro-Clinton pieces for publications like The New Yorker, joined the White House staff, The New Republic, a former employer, sniped: ““Maybe he’ll get his back pay.''

With his fedora and rumpled suits, Drudge styles himself as ““the Walter Winchell of the electronic age.’’ He began his career trolling through the trash at the CBS gift shop in search of movie-industry gossip that he would then post on his Web page. Soon he added political tidbits and became a virtual water cooler for the media elite. A self-described right-wing ““Clinton Crazy,’’ the 30-year-old cozied up to Washington’s Gen-X conservative set; he was feted at a Georgetown dinner hosted by David Brock. When AOL hired Drudge last summer, it touted his ““instant, edgy’’ style. Drudge has said that his sources were ““80 percent reliable’’–and he’s admitted that he sometimes gets things wrong. (Neither Drudge nor Blumenthal would comment on the case.)

Drudge’s acknowledged credibility gap may do him in. Unless his source is revealed and proves to be someone who has been reliable in the past, legal experts say the Blumenthals’ libel claim stands a good chance of winning. But the political battle has only begun. While the Blumenthal camp searches for evidence of a conservative conspiracy, Drudge’s lawyers claim he’s being politically persecuted by the White House for becoming a cyberpest. Most Clinton aides hire lawyers to defend themselves. Blumenthal may be the first to willingly go to court.