The lawsuit was over the fact that Hustler published nude photos of Nancy a year after she and Daniel Benoit were murdered by Chris Benoit. The pictures were from a private modeling session done when Nancy was young and she believed they had been destroyed at her request. The family had initially received a $20 million judgment, but it was reduced and then dismissed in appeals. It was argued by Hustler that the photos were newsworthy and those protected under freedom of the press.
It is worth noting that this could bode poorly for Hulk Hogan's lawsuit against Gawker, as Gawker has been making the same argument over posting a small clip of Hogan's sex tape that Hustler did. The Hogan lawsuit has not been going well for him, as he has had temporary injunctions denied that demanded the removal of the clip from the website.