Gagliano lawsuit against Paul Martin, government dismissed
Gagliano was seeking $8 million in damages and more than $500,000 in salary he lost after Martin pulled him out of Copenhagen in 2004.
Martin let Gagliano go after a report by the federal auditor general that led to Justice John Gomery's inquiry into the sponsorship scandal.
As public works minister in the late 1990s, Gagliano was responsible for the sponsorship program geared to promote federalism in Quebec.
Gagliano, who has never faced criminal charges in the scandal, was removed from cabinet by then-prime minister Jean Chrétien before being named ambassador to Denmark.
Superior Court Justice Kevin Downs says in his ruling it is the prerogative of governments to remove ambassadors from their posts.