Just came across this sobering article from a few weeks ago. Summary: LiveJournal has been sued, possibly successfully, over their ONTD group -- apparently somebody posted copyright-infringing material there, and because ONTD is vaguely official and (volunteer-)moderated, there's a strong suggestion that the traditional "safe harbor" provisions may not apply.
Suffice it to say, this is not good news. The precise details of how this falls out will determine how much (if at all) it damages the assumptions of zillions of websites, but a broad interpretation of it could be hugely damaging. One to keep an eye on...
ETA: Okay, it's worth reading the actual appellate decision, at least the summary at the top. (Much of this decision is nicely readable.) This clarifies several things:
First and most important, this wasn't a decision against LJ per se. Rather, it was the reversal of a summary judgement in favor of LJ. That is, the district court had simply dismissed the case on the grounds that LJ was clearly protected by the DMCA. The appellate court is essentially saying, "No, this one is kind of complicated -- let it go to trial".
Second, the key reason why this is muddy is that the moderation team of ONTD is apparently led by an LJ employee. ("Although users submitted Mavrix’s photographs to LiveJournal, LiveJournal posted the photographs after a team of volunteer moderators led by a LiveJournal employee reviewed and approved them.") So it's not just "the users" involved: LJ has a quasi-official presence in the group, so they might be legally liable. That's not actually surprising -- I could have told LJ that that's a legally dumb policy.
(This is why Querki is designed to be strictly self-policing by the users, and why it's intentionally difficult (at the technical level) for company employees to mess with user Spaces: the line between "official" and "user-directed" needs to be crisp and sharp in order to enjoy solid DMCA protections.)
Third, ONTD isn't a normal LJ group. "In 2010, LiveJournal sought to exercise more control over ONTD so that it could generate advertising revenue from the popular community. LiveJournal hired a then active moderator, Brendan Delzer, to serve as the community’s full time “primary leader.” By hiring Delzer, LiveJournal intended to “take over” ONTD, grow the site, and run ads on it." So claiming that this group is run by "users", and therefore is protected by DMCA, is a bit disingenuous.
Overall, I'm somewhat less worried about it, having skimmed the decision. My read of this is that LJ got way too casual about DMCA, and did something strikingly stupid; Mavrix' claim that ONTD is not sufficiently independent to enjoy DMCA protection seems at least somewhat plausible on its face. The court is simply saying that, in this case, it is not obvious that LJ is covered by the DMCA.
While I do think Mavrix are kinda being assholes about it, by the spirit of the DMCA they may well have reasonable grounds for the suit. I'm not sure they're right, and I don't know how this will play out in court, but IMO the appeals court was probably correct in rejecting the summary judgement -- this one is messy, and does need to be properly litigated...