Ayman Abu Aita's "case is settled to the mutual satisfaction" of everyone involved, attorney Joseph Peter Drennan said. Court records show the case was designated settled and closed Wednesday.
Drennan wouldn't discuss the terms. Lawyers for Baron Cohen, Letterman and other defendants involved with the movie and Letterman's "Late Show" didn't immediately return calls.
In the 2009 comedy, Baron Cohen plays an Austrian fashion journalist aiming to make peace in the Middle East. He interviews Abu Aita, who's labeled in a caption as a member of the militant Al-Aqsa Martyrs' Brigade.
Baron Cohen discussed Bruno's encounter with a "terrorist" on Letterman's show on CBS.
A Christian and "a peace-loving person" who was living in the West Bank, Abu Aita has never associated with the Al-Aqsa Martyrs' Brigade or any terrorist activity, his court papers said.
He went to the interview that appeared in "Bruno" thinking he was talking to a journalist about peace activism, his court complaint said. Instead, the movie spurred death threats against him, damaged his business and made him fear for his family's safety, the complaint said.
The suit sought millions of dollars in damages.
Baron Cohen is known for crafting outlandish characters and he often dupes people into interviews to film their reactions to his antics.