The Mean Girls star found herself at the centre of a new scandal amid claims she struck Thaer Kamal with her Porsche as she left The Sayers Club in L.A. in March (12).
After initially telling cops he didn't require medical attention, the alleged victim checked into a hospital emergency room for treatment and threatened to file an incident report.
Lohan denied the accusations and branded the claim "a complete lie".
However, the investigation stalled as neither Lohan nor Kamal chose to co-operate with officers, who were left with little evidence to prove a crime had been committed.
Authorities passed the files on to the District Attorney's office on Friday (04May12) to decide upon any possible charges, but the case was rejected after officials deemed Kamal a "non-credible witness", according to TMZ.com.
Detectives also studied surveillance tapes from the night in question and found there was "no collision".