Trump's lawyer Charles Harder called the ruling a "total defeat" for Daniels, saying that "no amount of spin or commentary by Stormy Daniels or her lawyer, Mr. Avenatti, can truthfully characterize today's ruling in any way other than a total victory for President Trump".
"The court agrees with Mr. Trump's argument because the tweet in question constitutes "rhetorical hyperbole" normally associated with politics and public discourse in the U.S.", U.S. District Judge S. James Otero in Los Angeles said in a ruling Monday, as Bloomberg reported.
Cohen pleaded guilty in August to campaign finance violations alleging he coordinated with Trump on a hush-money scheme to buy the silence of Daniels and a Playboy model who alleged affairs.
She filed the case after the president tweeted that she had invented a story about being threatened for speaking out about the alleged affair.
Ms Daniels' lawyer, Michael Avenatti, said they would appeal against the decision.
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"Mr. Trump knew that his false, disparaging statement would be read by people around the world and that it would get a lot of press coverage, and that Ms. Clifford would be subjected to threats of violence, economic harm, and reputational damage as a result", the 7-page document of the matter, which was moved out West subsequently, added.
"The First Amendment (of the US Constitution) protects this type of rhetorical statement".
President Donald Trump's attorneys scored a victory in court when a federal judge dismissed adult-film actress Stormy Daniels' defamation lawsuit against Trump on First Amendment grounds and ordered her to pay his legal fees. She then released a sketch of the man.
The judge also ruled that the president is entitled to "reasonable" attorney's fees.
Mr Trump responded by dismissing her claims in a tweet, saying: "A sketch years later about a non-existent man".
With that, and other legal battles between Trump and Daniels in other jurisdictions still on-going and not at all hampered by today's ruling, it became a showdown between the lawyers.
He said: "A sketch years later about a nonexistent man". Ideally one of these individuals would have bragged about it to a member of the public, ' Avenatti said.