UPDATE 1-Anna Nicole Smith friend can sue, not for gay claim

Wed Aug 12, 2009 9:16pm EDT

* Anna Nicole Smith companion can sue author for libel

* Judge says gay claims not among defamatory statements (Adds Stern lawyer comment)

By Christine Kearney

NEW YORK, Aug 12 (Reuters) - A companion of late Playboy model Anna Nicole Smith can sue an author for defamation but not over gay sex claims because homosexuality is no longer viewed as contemptible, a U.S. judge said on Wednesday.

Howard K. Stern is suing Rita Cosby and the Hachette Book Group over Cosby's bestseller "Blonde Ambition: The Untold Story Behind Anna Nicole Smith's Death."

Stern is the former lawyer and boyfriend of Smith, the Playboy playmate and Guess jeans model who died in 2007 from an accidental prescription drug overdose.

Stern claimed the book, which was published six months after Smith's death, contained 19 libelous statements, including that he had engaged in oral sex at a Los Angeles party with Larry Birkhead, the father of Smith's child, and that Smith had later called Stern gay.

U.S. District Judge Denny Chin ruled the defamation case could proceed on 11 of the statements.

Chin dismissed Stern's claims that statements implying he was homosexual were defamatory, although he acknowledged that gays and lesbians still suffered prejudice.

"I respectfully disagree that the existence of this continued prejudice leads to the conclusion that there is a widespread view of gays and lesbians as contemptible and disgraceful," the judge said.

Chin ruled that Hachette could not be sued because it had no reason to doubt the truth of the book. But he noted Cosby, who is also a television reporter, had to answer to claims that she knew some of her sources were not truthful.

"Cosby's actions are extremely troubling, and suggest that she was attempting to obstruct justice by tampering with witnesses," the judge said.

Hachette gave Cosby an advance of $405,000 plus royalties for the instant bestseller, the ruling said.

A lawyer for Cosby, Elizabeth McNamara, said she was pleased the case had been narrowed down.

"As to the remaining statements, we are fully confident that a jury will dismiss them as well once it hears all the evidence surrounding Howard K. Stern's life with Anna Nicole Smith," she said.

Stern's lawyer, Lin Wood, called the decision a victory.

"Defamation cases brought by public figures, such as Mr. Stern, only go to a jury in the most egregious of cases, and Judge Chin has found the case against Cosby to be one of those cases," Wood said in a statement.

In a separate case, Stern, 40, and two doctors face an October hearing in Los Angeles on charges they were illegally supplying Smith with prescription drugs for years. (Additional reporting by Sinead Carew; Editing by DoinaChiacu)

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