July 15 (Bloomberg) -- Developer Donald Trump lost his bid for $5 billion in libel damages from New York Times editor Timothy O’Brien, whose 2005 book questioned Trump’s billionaire status.

A judge in Camden, New Jersey, today tossed out Trump’s case, finding there weren’t sufficient grounds to justify a trial.

In January 2006, Trump, 63, sued O’Brien and the publisher, Time Warner Book Group Inc., now part of Paris-based Lagardere SCA, for allegedly misrepresenting his assets in the book “TrumpNation: The Art of Being the Donald.” The New York Times wasn’t sued.

Trump contended in court papers that O’Brien wrongly wrote that Trump was worth from $150 million to $250 million.

Lawyers for O’Brien told New Jersey state Superior Court Judge Michele M. Fox in May that the case should be dismissed, in part, because Trump failed to show he suffered monetary loss or defamation.

Trump hasn’t shown “clear and convincing evidence to establish malice” by O’Brien, Fox said in an opinion today.

Trump said he will appeal the decision.

In a 2007 deposition for the case, Trump said “I am a billionaire, many times over, on a conservative basis.”

Independent Contractor

Fox also ruled that as an author, O’Brien was an independent contractor and thus the publisher couldn’t be held liable for his actions.

“The issue for this court is not whether O’Brien’s investigation was negligent, but whether a reasonable fact- finder could find actual malice,” and the case doesn’t sufficiently rise to that level, Fox decided.

The judge also echoed O’Brien’s argument that similar estimates of Trump’s net worth by three confidential sources were excerpted in 2004 in the Sunday business section of the New York Times, yet Trump continued to cooperate with O’Brien as he wrote the book.

O’Brien’s underestimating his net worth hurt Trump’s business and credit interests, the developer had alleged.

“We proved our case,” Trump said in an interview after Fox read her decision in a teleconference. “We showed the net worth is much more than $5 billion, even $6 billion. And she said that while the reporter may have been negligent or even grossly negligent, it doesn’t equate to malice.”

‘Condones Negligence’

William Tambussi, a lawyer for Trump, said there were “disputed material facts” that should be heard by a jury.

“It’s unfortunate that the court’s decision today in effect condones the gross negligence” of a reporter, Trump’s lawyer said.

O’Brien said in a statement that he’s “deeply gratified that the court’s decision has vindicated the reporting in ‘TrumpNation.’”

Through their lawyers, the publishers said they’re “fully supportive” of O’Brien and his reporting, and termed the lawsuit “meritless.”

Trump tried to get the names of O’Brien’s sources, but an appeals court ruled in October that O’Brien was protected by journalist confidentiality laws.

Defense Argument Cited

In her decision, Fox also cited a defense argument that O’Brien wasn’t able to obtain “any reliable or verifiable financial information that established the confidential sources’ estimates were false.”

Last month, Trump began a debt-restructuring plan to buy his namesake Trump Entertainment Resorts Inc. out of bankruptcy after severing all ties with the casino firm in February.

Trump Entertainment fell less than 1 cent to 13.5 cents in over-the-counter trading.

The company reported a $232.2 million net loss on $922.7 million in sales last year.

The New Jersey Casino Control Commission said last month that casino revenue has been falling as recession-strapped consumers spend less on gambling.

The case is Trump v. O’Brien, Time Warner Book Group, L- 545-06, New Jersey Superior Court (Camden).

To contact the reporters on this story: Phil Milford in Wilmington at pmilford@bloomberg.net; Robert DiGiacomo in Camden, New Jersey.

Last Updated: July 15, 2009 18:37 EDT