The 9th U.S. Circuit Court of Appeals on Thursday reinstated portions of a federal lawsuit filed by the owners of Phoenix New Times stemming from their late-night arrests by Maricopa County sheriff's deputies in October 2007 after the paper published details of overreaching subpoenas sent to the editors.

The U.S. District Court for Arizona had rejected the newspaper's claims that its constitutional rights had been violated and sent the remainder of the case back to state court.

The 9th Circuit judges upheld the lower court's determination that former Maricopa County Attorney Andrew Thomas had complete prosecutorial immunity and that there were no reasonable claims against Sheriff Joe Arpaio.

But, the judges ruled New Times owners Michael Lacey and Jim Larkin, whose bylines appeared on the disputed article, had grounds to sue special prosecutor Dennis Wilenchik for malicious prosecution and violations of the First Amendment, which addresses free speech.

At the time of the arrests, Wilenchik alleged that Lacey and Larkin had violated state grand-jury secrecy laws by publishing the information. But, in fact, it was discovered that Wilenchik had not even impaneled a grand jury and that he had issued the subpoenas himself without grand-jury input.

Therefore, the 9th Circuit determined that he could be sued for making the arrests without probable cause.

The deputies who arrested the newspaper's owners, however, could be given the benefit of the doubt in trusting that the prosecutor had grounds to order the arrests, the judges said.

And as for the First Amendment claims, the judges felt that the arrests showed a definite "chilling effect" on the paper's right to publish without fear of political and government pressure.

The 9th Circuit ruling did not address former Chief Deputy David Hendershott, who has gone on record to say that he - not Wilenchik - ordered the arrests.

One of the judges on the panel, however, believed Arpaio deserves no immunity in what he described as "a sordid tale of abuse of public office."

Sheriff's Deputy Chief Jack MacIntyre said the court's decision has no bearing on Arpaio.

"This is the result we expected all along," he said. "Other than the wild conjecture in the plaintiff's lawsuit, there's nobody that even said Arpaio was even involved in the decision process in the New Times case. That was an Andrew Thomas-Dennis Wilenchik decision. It sure makes Dennis Wilenchik's life slightly less happy because they reinstated a couple of the federal claims against him. As to Arpaio? It doesn't do a thing."

Lacey, Thomas and Wilenchik did not respond to requests for comment.

Phoenix attorney Michael Manning, who brought the lawsuit on behalf of Lacey and Larkin, said Thursday's ruling will play into the ongoing civil lawsuits and criminal and ethical investigations into Thomas, Arpaio and others over their prosecutions of political foes.

"This and the (Sandra) Dowling case were the first abuse of power claims that started it," Manning said.

The Sheriff's Office investigated former County School Superintendent Dowling alleging theft of funds. She was acquitted. Thomas had no part in that prosecution.

In recent months, the county has averaged $100,000 a month in legal bills to prepare its defense against lawsuits and notices of claim totaling $177 million. Many of those claims have been filed by current and former county employees, supervisors, judges and a private citizen. All stem from failed corruption investigations by Arpaio and Thomas.

Meanwhile, Arpaio, Thomas and their employees since December 2009 have been under investigation by the U.S. Attorney's Office and the FBI, which is examining whether they abused the power of their offices.

In 2004, New Times published a series of articles critical of Arpaio and in one of them violated an obscure law by publishing Arpaio's address online. It is not illegal to publish the same information in a newspaper.

According to the initial lawsuit, filed in April 2008 in Maricopa County Superior Court, Arpaio pressured Thomas to prosecute the case, and Thomas tried unsuccessfully to send it to the Pinal County attorney. Thomas then appointed his former employer, private attorney Wilenchik, as special prosecutor. Wilenchik issued a subpoena demanding not only documents related to the reporting and publishing of several articles but also information about New Times readers.

Among other things, the subpoena demanded that the alternative weekly turn over the names and addresses of its online readers, as well as details of their Internet viewing habits.

Over the course of the case, Wilenchik tried to arrange a private meeting with the judge hearing the case. That could constitute an ethics violation.

Lacey and Larkin then decided to violate the judge's order not to publicize the case and published a story about the subpoena. They were arrested Oct. 18, 2007, the night after the story came out.

When confronted by public disapproval over the arrests, Thomas dropped the charges and fired Wilenchik as a special criminal prosecutor.

Lacey and Larkin sued, alleging negligence on Arpaio's part for the arrest and prosecution, state and U.S. constitutional violations of free speech, false imprisonment, retaliation by law enforcement, abuse of process, conspiracy and racketeering.

Because of the constitutional issues, the case was removed to federal court, but the District Court threw out the constitutional, conspiracy and racketeering claims and sent the rest back to Superior Court.

Thursday's ruling reinstated some of the constitutional claims under the First and Fourth amendments, while rejecting the conspiracy and racketeering claims.