A federal judge this week dismissed a defamation suit brought against America Online Inc. for a story the Internet service carried. The suit, filed in the U.S. District Court for the District of Columbia by White House aide Sidney Blumenthal in late August, sought to hold Vienna, Va.-based AOL responsible for libel as the publisher of the story written by Internet columnist Matt Drudge that included allegations--later retracted--of spousal abuse. Internet providers had watched the case closely as an indicator of how much responsibility they would have to take for content on their services. Judge Paul Friedman ruled that the Communications Decency Act of 1996 protects Internet carriers from such suits. The case against Drudge was not dismissed.