NEW YORK, March 4 (Reuters) - A judge on Tuesday

signaled he may dismiss the New York Times ( NYT ) as a

defendant in a $400 million defamation lawsuit where the actor

Justin Baldoni alleged the newspaper colluded with the actress

Blake Lively to smear him after she accused him of sexual

harassment.

U.S. District Judge Lewis Liman in Manhattan said the Times'

February 28 motion to be excused from the case offered

"substantial grounds for dismissal" and "a strong showing that

its motion to dismiss is likely to succeed on the merits."

Baldoni has denied sexually harassing Lively or engaging in

a smear campaign.

He and Lively have filed competing civil lawsuits stemming

from Lively's claim that Baldoni sexually harassed her while

filming the 2024 movie "It Ends With Us," which Baldoni also

directed. Lively's husband Ryan Reynolds is also a defendant in

Baldoni's lawsuit.

Lawyers for Baldoni and his production company Wayfarer

Studios did not immediately respond to requests for comment.

Lively's and Reynolds' lawyers did not immediately respond to

similar requests.

Baldoni accused the Times of working behind the scenes with

Lively on a false and malicious narrative and becoming a

"conduit for her revenge," resulting in its December 21, 2024

article "'We Can Bury Anyone': Inside a Hollywood Smear

Machine."

In its dismissal motion, the Times said it engaged merely in

newsgathering and publishing the article, and that the

plaintiffs did not show it acted with actual malice.

The newspaper also said the sole alleged defamatory

statement in the article - that the plaintiffs orchestrated a

"smear campaign" in retaliation for Lively complaining about

sexual harassment - was protected opinion.

Liman also granted the Times' request to put discovery, or

the gathering of evidence, on hold pending a decision on its

motion to dismiss.

"We appreciate the court's decision today, which recognizes

the important First Amendment values at stake," Times

spokeswoman Danielle Rhoades Ha said in a statement. "The court

has stopped Mr. Baldoni from burdening The Times with discovery

requests in a case that should never have been brought."