A federal judge today dismissed a libel suit brought by the Church of Scientology International against Time magazine over a 1991 article that described Scientology as "a hugely profitable global racket that survives by intimidating members and critics in a Mafia-like manner."

U.S. District Judge Peter Leisure threw out the suit, which sought $416 million in damages for a cover story titled "Scientology: The Cult of Greed." Last year the court dismissed most of the case but heard new arguments on a remaining issue.

The article charged that Scientology, rather than being a bona fide religion, is organized for the purpose of making money by both legitimate and illegitimate means. It was written by then-Time staffer Richard Behar, who now works for Time Inc.'s Fortune magazine.

"It's a tremendous defeat for Scientology, but of course their doctrine states that the purpose of a suit is to harass, not to win, so from that perspective they hurt us all," Behar said today. "They've had a real chilling effect on journalism, both before and after my piece."

The magazine and its parent corporation, Time Warner Inc., reportedly spent more than $7 million defending Time against Scientology-related litigation. "This was a valid story worth fighting for," said Time Managing Editor Walter Issacson. "There are fewer and fewer institutions willing to fight for the investigative story."

Behar's report criticized the church -- which obtained its IRS tax exemption in 1993 -- on several fronts, including the validity of its belief system, the harmfulness of its counseling methods and its tactics of fiercely combating journalists, judges and defectors from the church.

"These statements were either not challenged by plaintiff or were held to be nonactionable by the Court on the grounds that no reasonable jury could find that they were published with actual malice," the judge wrote.

The remaining issue in the case involved the statement that one source of the church's funds is "the notorious, self-regulated stock exchange in Vancouver, B.C., often called the scam capital of the world."

Leisure ruled that the statement was not made with actual malice and was not libelous.

Time's attorney Floyd Abrams said the ruling "affords significant First Amendment protection in an area where there has not been a lot of law. The court said that when you've {published} something that is not actionable . . . subsidiary statements are also not actionable."

The church said it would appeal the decision, based on its belief that the Time article remained "false, defamatory, and actionable."