'American Idol' to Benardo: Dismiss Suit or You'll Pay

9/23/2010 9:00 PM PDT

'American Idol' to Ian Benardo: Dismiss Suit or You'll Pay

"American Idol" is firing back at Ian Benardo, warning the former contestant to dismiss his lawsuit ASAP, or he'll end up paying the show's enormous legal defense costs.

As we previously reported -- Benardo sued "Idol" in federal court in New York last month, claiming "Idol" producers "exploited" his sexual orientation by asking him to "gay it up" on their show.

"Idol" lawyers shot back last week with a letter reminding Benardo that he long ago signed an agreement releasing the show from any liability.

The agreement reads, "I [Benardo] further understand that my appearance, depiction and/or portrayal in the Program may be disparaging, defamatory, embarrassing, or of an otherwise unfavorable nature which may expose me to public ridicule, humiliation or condemnation."

"Idol" lawyers also claim Benardo's contract clearly states that if he sues them and loses, he's going to have to pay all their legal fees -- and you can bet "Idol" lawyers don't come cheap.

UPDATE: Benardo tells TMZ, "I will see them in court. They want me to be quiet about this and I’m not going to back down just because they are a major tv show."