Adios, Taco Bell.

The local office of TBWA Chiat/Day won a court ruling last month relieving the advertising agency of $42 million in legal costs that followed the success of its 1997 ad campaign for Taco Bell Corp. featuring a talking Chihuahua.

The Taco Bell commercials, created by the shop’s Los Angeles office, were so popular they turned up on toys and T-shirts. In the commercials, the Chihuahua appeared to say, “Yo quiero Taco Bell,” which in English means “I want Taco Bell.”

In 2003, however, Taco Bell, owned by Yum! Brands Inc., was ordered by a jury to pay $42 million in a breach of contract lawsuit filed by two Michigan men who alleged they had met with executives of the Mexican fast-food chain to pitch an ad campaign about a talking “Psycho Chihuahua.”

(The men and the company had broken off talks for the project.)

Taco Bell then sued TBWA Chiat/Day, a subsidiary of Omnicom Group Inc., in Los Angeles federal court claiming that the agency’s contract for the $500 million campaign made it responsible for all its legal costs, including the $42 million settlement.

TBWA Chiat/Day, in a counterclaim, alleged that the case should be dismissed, and a federal judge agreed, throwing out Taco Bell’s claim, according to court papers.

Calls were not returned by Taco Bell’s attorney, Chicago-based Jeffrey Charkow, a partner at Stein Ray & Harris LLP, or by TBWA Chiat/Day’s local attorney, Douglas Emhoff, a partner at Whitwell Jacoby Emhoff LLP.