A former Miss Pennsylvania USA, who gave up her state crown shortly after the Miss Universe organization announced its decision to allow transgender participants, has been ordered pay the pageant organization $5 million for defamation.

Sheena Monnin, who quit the pageant in June, told national media that the pageant was “rigged,” and that she saw the list of the Top 5 on the morning of the pageant, “before the show ever started.”

But pageant officials refuted her claim, and said that Monnin emailed the Miss Universe organization and said allowing transgender participants was the basis for her decision:

“I refuse to be part of a pageant system that has so far and so completely removed itself from its foundational principles as to allow and support natural born males to compete in it. This goes against ever moral fiber of my being. I believe in integrity, high moral character, and fair play, none of which are part of this system any longer.”

Pageant officials claimed Monnin’s allegations on Facebook and NBC’s “Today” show that the contest was rigged, cost the Miss Universe organization a $5 million fee from a potential 2013 sponsor.

Miss Universe co-owner Donald Trump retaliated by filing the lawsuit against Monnin, calling her allegations an “utterly baseless claim.”

U.S. District Court Magistrate Judge Theodore H. Katz, acting as an arbitrator, agreed, and said Monnin’s statements were false, harmful and malicious.

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Monnin had two motives, Katz said: “She was a disgruntled contestant who failed to make it past the preliminary competition” and she objected to the pageant’s decision to allow transgender contestants.

He wrote that the way the contest is judged “precludes any reasonable possibility that the judging was rigged.”

“We cannot allow a disgruntled contestant to make false and reckless statements which are damaging to the many people who have devoted their hearts and souls to the Miss Universe, Miss USA and Miss Teen USA pageant systems,” Trump said in a statement.

“While I feel very badly for Sheena, she did the wrong thing. She was really nasty, and we had no choice. It is an expensive lesson for her,” Trump added.

In April, The Miss Universe Organization, which operates the Miss USA pageant, announced that it is changing its rules and will allow transgender women to take part in all of its competitions starting in 2013.