The Mean Girls star was arrested earlier this week for allegedly leaving the scene after clipping a pedestrian with her car.
Jose Rodriguez said that he was hit in the knee by Lohan's Porsche in New York and claimed in an interview that she was slurring and "smelled like alcohol real bad".
Lohan offered her own account of the night in a statement, denying that she had any alcohol and saying: "A paparazzi sat on the hood of my friend's car and they arrested me.
"It's so absurd, completely unfair and unjust. It's just because it's me - it's unfortunate."
TMZ reports that sources close to the actress say she is planning to sue Rodriguez for defamation.
The 26-year-old is said to be afraid that the false reports of her intoxication may cost her future work and is "tired of people lying just to score a quick paycheck".