The judge declared a mistrial after jurors said they were hopelessly deadlocked as to whether the actress' character was killed off on the ABC show in an act of retaliation or simply for creative reasons.
The jury found 8-4 in favor of Sheridan, one vote shy of a verdict.
The 48-year-old Sheridan had sought at least $5.7 million from creator Marc Cherry and Touchstone Television Production.
Sheridan accuses series creator Marc Cherry of killing her character, Edie Britt, and ending her employment in revenge for her complaints against him for a slapping incident during a rehearsal.
Last Tuesday, Michael Reinhart, the set construction coordinator for "Desperate Housewives," took the stand as an 11th-hour witness.
He testified that he received an e-mail that suggested a "conspiracy to cover up" information regarding Sheridan's lawsuit.
Reinhart told jurors that he contacted Sheridan's attorney, Mark Baute, about an e-mail he received in the fall of 2010, soon after Sheridan filed her lawsuit.
He said he came forward because he had begun to lose sleep over what he read in the e-mail.
"It was my understanding that they were going to delete e-mails from the hard drives," Reinhart testified.
He read the e-mail and immediately deleted it because he believed it was not intended for him, he said.
What he read made him uncomfortable "because if the proposed actions were carried out, I felt it would create an imbalance between the parties in this case," he testified.
"I just wanted to make it equal for both sides."
Reinhart said he feared he was committing "professional suicide" by revealing the e-mail, but had he not come forward, he "would've had to live with that doubt the rest of my life."
During cross-examination, Cherry's lawyer suggested Sheridan's attorney offered to help Reinhart find a job if he was fired by ABC. Baute denied that outside the courtroom.
The defense later called Jean Zoeller, ABC's chief litigation lawyer, to testify that she sent memos to every employee connected to the case instructing them to save all their electronic documents.
When asked if she told anyone to delete e-mails, she responded "Absolutely not."
The defense won one victory on Tuesday when the judge issued a directed verdict dismissing Sheridan's battery claim against Cherry.
Sheridan testified that Cherry hit her because he was frustrated during a discussion over her lines in a scene.
Sheridan's lawyer downplayed the significance of that decision, saying jury deliberations will be simplified without it.
The jury will have to decide whether Sheridan's character was axed from the show in retaliation for her complaints against Cherry, or whether the move was simply a creative decision, as Cherry's attorneys have contended.
They maintain that her violent death was a way to shock viewers and raise ratings.
They also say the decision to kill of Britt in season five was made in May 2008, months before the alleged hitting incident. That claim was supported by testimony from ABC executives.
ABC is a defendant because its executives allegedly failed to properly investigate Sheridan's accusation that Cherry hit her and then agreed with his decision to fire her.
If Sheridan wins, she stands to collect about $4 million, the equivalent of one year's salary.