The Trade Union of Russian Citizens filed the lawsuit earlier this year, claiming that Madge's advocacy of gay rights during a St Petersberg concert was detrimental to young people.
The Associated Press reports that plaintiff Darya Dedova testified yesterday: "Who will children grow up to be if they hear about the equal rights of the lesbian lobby and manly love with traditional sexual relations?"
Madonna was apparently being pursued for damages of £6.7m.
The judge at St Petersburg Moskovsky district court threatened to throw journalists out of the court room if they didn't stop laughing at the proceedings - and eventually dismissed the case.
Watch MTV News on the hour every hour on MTV - Sky Channel 126 and Virgin Channel 134