I've removed the recent pictures of Lansing from the homepage of the site, http://develop.metrolansing.com, because a complaint came in about a video that was being linked to. Apparently the video is copyrighted material and the author wanted me to remove the link to the video.

The thumbnails that are on the site are generated by an automatic search of Flickr for pictures and videos that are tagged 'Lansing construction'. There is no way to have the search only return images and videos that are licensed under Creative Commons.

I'm not sure how copyright works with embedding a thumbnail, I am almost positive that it is entirely legal when it is just a link. In fact, Wikipedia says that using a thumbnail to link to a copyrighted image is not infringement.

So for now I removed the Flickr section. What do you think I should do? (Keep in mind that I've never broke even on the website and it's not worth it to get sued)

Thumbnails are considered a 'de minimis' use, and therefore are a fair use of copyrighted material (this is how Google Images is able to function legally). Additionally, linking to copyrighted material is not a violation of any of the copyright holder's rights. Actually embedding the video on your site can be considered an infringement, but from your post it sounds like you were not doing that. If I understand correctly, the issue is that a copyrighted video comes up in a Flickr-generated listing of pictures and videos tagged 'Lansing.' If that is the case, the complaining author is seriously misinformed about their rights, as linking to copyrighted material is not infringement on your part or Flickr's part. To find that it is infringement would be akin to telling people they cannot publish a map to a location - for that is essentially what a link is. If the video is posted on a website, anyone can link to it. As long as you are not embedding the video on the site (so that the video could be viewed here, without requiring the viewer to visit the original site), and whatever appears on the site simply takes viewers to the original video, you're in the clear. Furthermore, if you are simply embedding a Flickr stream that automatically generates results based on tags, the copyright holder in the video should take up the issue with Flickr. If the copyright holder uploaded or linked the video to Flickr themselves and tagged it, through Flickr's terms of use they have consented to its appearance in search engines and streams, and cannot claim any sort of infringement.

This isn't meant to be legal advice in any way, just a general statement of the law...I can't speak on the details, as I'm not sure your exact situation. If you want detailed advice I'd contact an attorney locally.

I updated the forum software today from version 1.1.6 to 1.1.10. Please let me know if something isn't working anymore.

I've added the thumbnails back on to the website. I've made it so the thumbnail feature won't display any images from the guy who complained.