Thursday’s ruling comes as part of a case that begin in early 2011 when two Democratic political operatives, Peter Daou and James Boyce, filed a lawsuit stating that they had presented the idea for HuffPo in 2004. The pair claim that Huffington and Lerer then cut them out of the process, launching the site in 2005 and claiming the idea as their own.

In October 2011, New York Supreme Court Judge Charles Ramos threw out seven of eight claims in the case but allowed one claim — based on the state claim of idea misappropriation — to go forward. Since then, the parties have been wrangling over procedural issues and Daou and Boyce filed an amended complaint.

In addressing the amended complaint, Ramos allowed the idea theft claim to go forward as well as those for fraud and unjust enrichment; he tossed a fourth claim for breach of implied contract.

“Plaintiffs have adequately alleged that defendants took the information that plaintiffs provided, secretly shared it with another person, camouflaged the origin to make it appear as it came from that other person and, in effect, stole the idea and developed it with that other person,” Ramos wrote in letting Daou and Boyce go forward with the fraud claim.

In the same ruling, Ramos rejected Daou and Boyce’s request to subpoena the CEO of AOL, Tim Armstrong, rejecting arguments that Armstrong had essential knowledge about the founding of the Huffington Post. AOL bought the Huffington Post for $315 million in the spring of 2011.

Today’s ruling does not mean that Daou and Boyce have won the case. Instead, it means they have cleared a crucial procedural hearing and, thanks to the added claims, can proceed to a trial with a stronger hand.

“The court has made only a preliminary decision based solely on the uncontradicted allegations of the complaint and without any consideration of the proven facts,” a Huffington Post spokeswoman said. “As we have said from day 1, there is no merit to these allegations. They are make believe. With this ruling, we will now be able to move for summary judgment and lay out the actual evidence in this case. We look forward to the opportunity to present the full record to the court.”

Here’s the ruling:

Order upholding HuffPo complaint.pdf by

This story was updated at 8:30 p.m. ET with a statement from the Huffington Post and at 9:30 p.m. ET with a slightly updated version of the statement from the Huffington Post.

The story of the site’s founding is the subject of a bitter lawsuit filed by two Democratic political advisers who claim Huffington blatantly stole their idea for a leftwing alternative to the conservative Drudge Report.

In October, a New York judge dismissed a number of claims but allowed Peter Daou and James Boyce, both former advisers to Presidential candidate John Kerry, to go forward with a state claim based on theft of an idea. The judge later allowed them to conduct document discovery of the defendants.

The discovery process produced a number of emails and minutes from meetings that are described in the amended complaint filed today.

The complaint argues that the emails help show that Huffington and her business partner Kenneth Lerer built the Huffington Post on a stolen idea and that they actively recruited others to help them implement it while stringing along Daou and Boyce:

Huffington and Lerer likewise were secretly communicating in December 2004 with a political activist named Andrew Breitbart in an effort to persuade Breitbart to participate, without Boyce and Daou [..] the timing of these discussions exposes Defendants’ fraudulent intentions, because Defendants were already in discussions with Breitbart about Plaintiffs’ ideas … at a time they were still pretending to be working with Plaintiffs. [...]

Breitbart’s “quick first email pass at the idea” identifies the very same two primary components of the website that Plaintiffs had previously identified for Huffington and Lerer: [...]  This “quick idea” – which became The Huffington Post – is the very idea that was stolen from Boyce and Daou.

The late Breitbart was a prominent conservative journalist who, after falling out with Huffington, claimed that he “created the Huffington Post” and that  “I drafted the plan. They followed the plan.”

The new complaint also includes emails from Daou to his aunt, writer Erica Jong, in which he claims credit for founding the website. In another email to President Obama’s former press secretary, Robert Gibbs, that was allegedly forwarded to Huffington herself, Boyce refers to being “involved with the Huffington Post” from the beginning.

In public statements and legal filings, Huffington and Lerer have downplayed the role of Daou and Boyce and claimed that the ideas they presented in an ideas memo are different from what the website actually became.

The new complaint also contains allegations of a cover-up based on minutes of a meeting held between Huffington, Lerer, Breitbart and an editor in which the group debated what “narrative” to offer the media about the Huffington Post’s origins:

Breitbart proposed this answer: “I knew what was missing in the blogosphere, I just needed the rolodex to be able to put it all together, and Arianna provided that. … Arianna called Andrew to talk about an alternative to the Drudge Report. Andrew called Arianna about the group blog – there’s nobody he knows besides Arianna who could make this work.” [...]Deceitfully, however, the “narrative” wrote Boyce and Daou out of the picture entirely.

The emails and other documents cited in the new complaint don’t appear to contain smoking gun proof that Huffington schemed to cut out Daou and Boyce after stealing their idea. But the new allegations, including an email in which Huffington appears to have forwarded a confidential business plan written by Boyce to a subordinate, could strengthen the plaintiffs’ case.

The plaintiffs also use the documents to reassert new claims for fraud and breach of contract that the judge had initially struck out last October. The overall legal process is likely to drag on for many more months.

AOL bought the Huffington Post for $315 million in the spring of 2011. The acquisition has proved rocky in recent months and led to rumors that the two entities might part ways.

Here is the amended complaint:

Amended HuffPo Complaint

The tale of intrigue amidst the media elite of the Democratic party began last year when Peter Daou and James Boyce, both advisers to the 2004 Kerry-Edwards campaign, filed a lawsuit against the Huffington Post founders last November. Daou says he penned a memo about a “new kind of Democratic news-reporting website and blogging ‘ring’ or collective” but that Huffington stole the idea and cut him out of the loop before she launched the Huffington Post in May of 2005.

Huffington and co-founder Ken Lerer filed to dismiss the suit but state judge Charles Ramos ruled yesterday that the plaintiffs could continue with their claim under a New York law that allows people to sue if someone steals an idea that is both novel and concrete. In the ruling, the judge noted that Huffington appeared to have conceded that the idea was indeed a new one when she told Playboy in 2006, “There’s a tremendous advantage in being the first with something .. We were the first hybrid of news and group blog.”

Ramos found that the plaintiffs had raised enough questions about the origin of the Huffington Post for the issue to be decided at a trial. This does not means that Daou and Boyce have proved their case but rather that they have overcome an important preliminary hurdle. The ruling may also increase the pressure on Huffington to settle the case before further details about the origins of her site are put before a jury.

Huffington has been dismissive about the claims by Daou and Boyce, saying it was “stunning” and “ridiculous” for them to state six years after the fact that they believed they had been partners all along. The spat was also chronicled by Vanity Fair in a February piece entitled “Huffing and Puffing.”

Huffington did obtain a minor victory after the judge threw out the plaintiffs’ related claims for breach of contract, fraud and unjust enrichment. This is not especially significant, however, because plaintiffs in civil lawsuits will often plead multiple claims while knowing that the case will stand or fall on the basis of the strongest of them. The original complaint by Daou and Boyce asked the New York Supreme Court to grant an unspecified amount in damages.

UPDATE: Mario Ruiz, a spokesman for Huffington Post provided the following statement on Wednesday night: “Seven out of the eight claims were thrown out. To describe this as any kind of victory is as laughable as their lawsuit.”

Partha Chattoraj, the attorney for Daou and Boyce, responded on Thursday morning: “Arianna Huffington and Ken Lerer may say that they find “laughable” the court’s decision to uphold our claim that they stole my clients’ ideas for the Huffington Post, but we are gratified to have the opportunity to bring the truth to light.”

HuffPo Judge Ramos Ruling

Daou and Boyce haven’t won, and the lawsuit is still at an early stage. But it sounds like they will be allowed to move ahead with discovery, the evidence-gathering phase of litigation, which tends to be the most expensive and burdensome part of a case like this.

“These people were apparently involved with the earliest efforts to create The Huffington Post,” the judge said, according to a report from the Law360 legal newswire. “This is not a frivolous lawsuit.”

The judge also exhibited some frustration about the point of case law that HuffPo’s lawyer was using to prove their case, although it’s not exactly clear from the Law360 report what that issue was. It has something to do with what is required to prove the existence of a “joint venture” under New York law.

In their lawsuit, Peter Daou and James Boyce say that it was they who drafted a plan for a liberal news website; essentially a Democratic version of The Drudge Report. Now they’re suing Arianna Huffington and her co-founder, Kenneth Lerer, for breach of contract, saying there was a “partnership” between the two. The initial idea was to call the site fourteensixty.com, named after the 1460-day cycle between presidential elections.

Huffington herself has been dismissive of this claim, and early on wrote to Daou and Boyce, saying: “Your suggestion, after nearly 6 years, that you understood all along that we were in a ‘partnership’ to create and operate the Huffington Post is stunning. And ridiculous.”

And why did the two six years to decide to sue? Six years in which they actually voluntarily contributed to HuffPo by as unpaid bloggers? At yesterday’s hearing, Daou and Boyce’s lawyer, Partha Chattoraj, offered a kind of explanation, saying that the two couldn’t have picked a fight with such a powerful liberal publication without angering their clients, who were Democratic politicians. “This is not about two gentlemen who are looking for a quick score,” said Chattoraj.

These types of “stolen idea” claims seem to proliferate, unfortunately, against successful companies; to paraphrase JFK, success has a thousand fathers, but failure is an orphan.

The Boyce-Daou lawsuit got a lot of publicity following an extensive write-up in the February issue of Vanity Fair; a HuffPo spokesman told Business Insider that piece was so weak it should have been killed. He continued: “As we’ve said before, it defies reason and human nature, if they really believed they had created the Huffington Post, that they would wait six years before speaking up. At some point over the last 72 months, they would have contacted us to complain or asked us to credit them somewhere on the site or insisted on getting stock. Something. Anything! But they didn’t, because they know that they have absolutely no claim to ownership.”

»  The lawsuit was filed in New York state court and is being overseen by Judge Charles Ramos.

»  Huffington and Lerer’s motion to dismiss was filed in January. [PDF]