A federal judge has ruled that Craigslist is not liable for ads listed on its site.

A federal judge in Illinois has dismissed a lawsuit by Cook County sheriff Thomas Dart accusing Craigslist of creating a public nuisance by allegedly running prostitution ads.

U.S. District Court Judge John Grady in Illinois ruled Tuesday that the federal Communications Decency Act protects Craigslist from liability for unlawful ads submitted by users.

“Sheriff Dart may continue to use Craigslist’s website to identify and pursue individuals who post allegedly unlawful content,” Grady wrote. “But he cannot sue Craigslist for their conduct.”

Good. The attacks on Craigslist have been ridiculous and unfair. Imagine the consequences of holding sites liable for everything posted on their sites. Social networking and new media are revolutionizing the way we communicate and will have significant implications for business as well. We don’t need the morals police holding companies liable for individual behavior they deem to be problematic.