Article from NY Times (registration required):
Two years ago, when Stanley Young, a Virginia prison warden, learned that two Connecticut newspapers had written stories about his prison's treatment of inmates from that state, he went to read the four articles on the Internet. He did not much like what he saw.
...
Charging in a lawsuit that the articles suggested he was a racist who encouraged abuse by his guards, Mr. Young filed a libel suit against the two publications owned by the Tribune Company, The Hartford Courant, a daily, and The New Haven Advocate, a weekly. (He also sued a writer and news executive from each publication.)
But Mr. Young did not file his case in the defendant's jurisdiction. Instead, he sued in Virginia, even though the newspapers had almost no print circulation there.
That decision on where to sue is the nub of a legal dispute that could reverberate nationally and internationally, lawyers say. Last year, a federal district judge in Big Stone Gap ruled that Mr. Young's lawsuit could proceed in his home state because the newspapers' Web sites were accessible there and that was where injury to his reputation would have taken place.
Some related cases/links: (Updated 5/28/02 -- case sent by Eric Grimm)