The Los Angeles County district attorney's office said there was insufficient evidence to prove the former Chicago Bulls star committed a crime.
Pippen was dining with his wife, children, brothers and mother-in-law when he was approached by Camran Shafighi, who asked for a photo.
When Pippen allowed Shafighi to take a photo but did not pose with him, Shafighi pressed his case -- and claims he got a faceful of Pippen's fist in return.
Shafighi said Pippen spit on him, knocked him down and kicked him, and only remembers waking up in the hospital.
Pippen tells a different account of events, telling sheriff's investigators Shafighi followed him to the valet stand, spitting and cursing. He said he spat back and pushed Shafighi away.
The basketball star says he lifted his foot to block Shafighi's own kick, aimed at Pippen's crotch. Security and valets who witnessed the incident said they saw Pippen punch and kick Shafighi.
Shafighi was taken to UCLA Medical Center, where he was found to have a possible concussion, with a 0.18% blood alcohol level.
Investigators said he returned to the emergency room the next day, claiming he had a broken ankle and ribs, and said he was visibly drunk and appeared to be "making up stuff to try and have a story."
Because of Shafighi's drunken condition and alleged behavior, a lack of physical injuries and the witnesses description of the altercation, prosecutors concluded he was feigning injury.
Prosecutor William Ryder concluded Pippen's push was "justifiable and spitting is unprosecutable," and declined to pursue Shafighi's $4 million lawsuit.