The chow-Finnish spitz mix was returned by Lynne and Joseph Welsh of Doylestown, who adopted the dog, to Sheila Combs, of New Orleans, attorneys for both parties announced Wednesday.
The attorneys would not comment further on the settlement. Under terms of the agreement, Combs dropped a civil lawsuit against the Welshes that was filed in October in Bucks County Court.
The Welshes took in the now 2-year-old dog from a local shelter last November and renamed him Rusty.
Combs' lawsuit had alleged that Rocket was "wrongfully adopted out" after the dog was sent to Pennsylvania following its hurricane rescue. The suit also had claimed that the Welshes reneged on promises to return Rocket.
The first hearing on the suit had been scheduled for Thursday.
The case involving Rocket is not unique. Similar animal custody battles are brewing in states including Florida and Maryland over pets that were left behind during Hurricane Katrina and the mass evacuations afterward.