See the Powerline post.
Repeating a libel second hand is no defense, if you had reason to believe the libel false or if you act with reckless disregard for the truth. Coffee260 simply repeated what he heard (and a confirming email) and presented it "for what it was worth". FR has enough fact checkers to get to bottom of the matter if Dean and Siebelius have alternative explanations.
Seibelius representations about the state of the Kansas National Guard are so at variance with the facts that it naturally brings her motives into question.
"We therefore associate ourselves with our reader's statements regarding Governor Dean and invite Mr. Sandler to sue us for defamation as he threatens to sue Free Republic. This is to put him and his client on notice, however, that we intend to seek our attorney's fees under federal law for the assertion of a frivolous claim if he does so."