The D.C. Court of Appeals rejected the request from Roy L. Pearson to overturn a 2007 ruling that denied him damages. Pearson had argued that Custom Cleaners failed to live up to its promise of "Satisfaction Guaranteed."
Three appellate judges agreed Pearson failed to show the store's advertising amounted to fraud and said his argument defied logic.
Pearson can still ask the entire nine-judge appellate court to review the case or appeal to the U.S. Supreme Court.
Pearson did not immediately respond to an e-mail or telephone message seeking comment.
Jin Chung, the dry cleaner owner, said through his lawyer that his family is "very very happy" with the decision. The family said they hope Pearson won't take any further action.
The American Tort Reform Association lauded the court's move, saying the city's easily exploited consumer protection law should be reformed.
The case has taken its toll on both sides. The Chungs have sold the dry cleaning shop, citing a loss of revenue and the emotional strain of defending the lawsuit. Pearson lost his job when a D.C. commission voted not to reappoint him.