Blacks use that word to describe each other all the time. Visit any criminal court.
In 1992, the California court of appeal affirmed the denail of a black man who tried to change his name to Mr. Nigger. See
Lee v. Sup. Ct. (1992) 9 Cal.App.4th, 510.
http://login.findlaw.com/scripts/callaw
This is a totally bogus issue, as usual.