By David Thomas

March 6 (Reuters) - A New York state appeals court on Thursday dismissed billionaire investor Leon Black's lawsuit against the Wigdor law firm and its former client Guzel Ganieva over their failed case accusing him of defamation and rape.

New York's Appellate Division, First Department said Wigdor and Ganieva can recoup attorney fees from Black under the state's anti-SLAPP law, which is meant to deter lawsuits that are designed to punish defendants for speaking out on public issues.

Black, the co-founder of Apollo Global Management, failed to show there was a "substantial basis" for his malicious prosecution claim against Wigdor and Ganieva, the appeals panel said.

"This is now the second lawsuit that Leon Black has brought against Wigdor that has been dismissed," Wigdor partners Douglas Wigdor and Jeanne Christensen said in a statement. "Unfortunately, being a billionaire buys access to our court system and lawyers who attempt to silence sexual assault survivors through SLAPP lawsuits," they added.

Susan Estrich, a lawyer for Black, said they plan to appeal and "believe that Wigdor has and continues to engage in malicious prosecution."

Wigdor and Christensen said they are "exploring the possibility of seeking compensatory and punitive damages under NY’s anti-SLAPP law against all appropriate defendants."

The lawsuit from Ganieva, a Russian model, claimed Black defamed her by falsely claiming she tried to extort him after accusing him of rape. Black denied the allegations.

Ganieva fired Wigdor as her legal counsel in March 2023. Five months later, Black sued Wigdor, claiming the firm's business model is based on threatening "to sue defendants with scandalous allegations that can be avoided only at the cost of a large settlement, of which Wigdor takes a substantial cut."

In September, a New York state judge denied Wigdor and Ganieva's requests to dismiss the case, finding that Black's allegations of malicious prosecution were sufficient for his lawsuit to proceed for now. The appeals court's Thursday ruling overturned that decision.

A Wigdor spokesperson said another lawsuit Black filed against the firm and Ganieva — a 2022 case alleging claims of breach of contract, unjust enrichment and tortious interference — should also be dismissed in line with the appeals court ruling.

Ganieva's lawsuit against Black was dismissed after a New York state judge ruled she could not pursue her defamation claims against Black after receiving $9.5 million from him under a nondisclosure agreement that followed their six-year relationship. A state appeals court upheld the dismissal in January.