This may be just my shaky grasp on the legal system speaking, but in what way is anything Dear Author wrote libellous? They were working with information reported to them and, as far as I can see, backed up each statement they made with a link to the source of that information.
Or am I misunderstanding something? It just seems very odd to me that Ellora's Cave would take legal action against a third party rather than one of their authors. Not that I believe their authors have done anything wrong either.
Aiming for the deepest pockets possible and she's actually delusional enough to believe she can win?