Sarah Palin, former governor of Alaska, speaks to members of the media in the spin room after the third U.S. presidential debate in Las Vegas, Nevada, U.S., on Wednesday, Oct. 19, 2016.

A federal appeals court on Tuesday reversed a judge's decision dismissing former Alaska Gov. Sarah Palin's defamation lawsuit against The New York Times for a 2017 editorial that suggested an image produced by Palin's political action committee incited the 2011 shooting of Rep. Gabby Giffords of Arizona.

The appellate panel said Judge Jed Rakoff of U.S. District Court in Manhattan in 2017 had relied on facts outside of legal filings in the case to dismiss the suit against the Times by Palin, who was the Republican vice presidential nominee in 2008.

Rakoff had "erred" by relying on evidence introduced at a hearing in the case, according to the decision by the 2nd Circuit Court of Appeals.

That evidence was testimony by James Bennet, the editorial page editor who had written the editorial in dispute, who said he had been unaware past articles in the Times and The Atlantic, where he previously had been editor-in-chief, which reported that there was no connection between Palin and her PAC and Jared Loughner, the man who seriously wounded Giffords in a mass shooting.

The appeals court sent the case back to Rakoff, and directed the suit to proceed to the discovery phase, in which parties would begin taking depositions and collecting evidence from each other.

Palin's lawyers, Elizabeth Locke and Ken Turkel, in an emailed statement said, "This is—and has always been—a case about media accountability. We are pleased with the Court's decision, and we look forward to starting discovery and ultimately proceeding to trial."

Danielle Rhoades Ha, a spokeswoman for the Times said, "We are disappointed in the decision and intend to continue to defend the action vigorously."

The appeals panel's ruling noted that Rakoff had taken the unusual step of holding an evidentiary hearing on the Times' motion to dismiss Palin's suit after it was filed in mid-2017. That hearing was to assess whether Palin's defamation claim had "sufficient allegations of actual malice" by the Times.

Under defamation law, public figures such as Palin must show that a media outlet published false information "with knowledge that it was false or with reckless disregard of whether it was false or not."

Rakoff's decision to dismiss Palin's case was on Bennet's testimony that he had not meant to blame Palin for Giffords' shooting, but was instead trying to make a point about the atmosphere of political anger in the United States, along with Bennet's claim that he had not known about the prior articles discounting any link between Palin and Loughner's attack.

In saying Rakoff made an error by relying on that testimony, instead of court filings in the case, the appeals panel said, "This case is ultimately about the First Amendment, but the subject matter implicated in this appeal is far less dramatic: rules of procedure and pleading standards."

The Times editorial at the center of the case, headlined "America's Lethal Politics," was published in June 2017 on the heels of the shooting of House Whip Steve Scalise during a baseball practice in Alexandria, Virginia.

Six days after that shooting, the Times noted that Palin's SarahPAC political action committee had, shortly before the 2011 shooting of Giffords by Loughner, circulated a map that superimposed a crosshairs target over some Democratic congressional districts, including that of Giffords.

The Times editorial argued "that these two political shootings evidenced the 'vicious' nature of American politics," the appeals court ruling noted.

"Reflecting on the Loughner shooting and the SarahPAC crosshairs map, the editorial claimed that the 'link to political incitement was clear,' and noted that Palin's political action committee had 'circulated a map of targeted electoral districts that put Ms. Giffords and other Democrats under stylized cross hairs,' suggesting that the congress members themselves had been pictured on the map."

The appeals court went on to note, "In the next paragraph, the editorial referenced the Hodgkinson shooting that had happened that day: 'Though there's no sign of incitement as direct as in the Giffords attack, liberals should of course hold themselves to the same standard of decency that they ask of the right.'"

Hodgkinson refers to James Hodgkinson, the shooter in the incident where Scalise was injured.

The Times "faced an immediate backlash for publishing the editorial," the appellate ruling said. "Within a day, it had changed the editorial and issued a correction."

The newspaper also "removed two phrases suggesting a link between Palin and the Loughner shooting," the ruling said,

And the correction added to an online version of the article said, "An editorial on Thursday about the shooting of Representative Steve Scalise incorrectly stated that a link existed between political rhetoric and the 2011 shooting of Representative Gabby Giffords. In fact, no such link was established."