Lopez is a both a film and pop star
The singer and actress, also known as J-Lo, claimed invasion of privacy involving the distribution of videos which were said to be in circulation.
Last year a case against Death Row Records and its head, Marion "Suge" Knight, was dismissed, leaving only unnamed defendants.
Lopez's lawyer Stanton "Larry" Stein told a settlement hearing in Los Angeles the singer had dropped the final part of the case in January.
The Wedding Planner star filed the suit following the publication of an article on the internet which alleged Knight had a "a videotape of Jennifer Lopez making love to a long-time-ago boyfriend" and was "planning to market it on the internet".
Lopez, an ex-girlfriend of Knight's rap rival Sean "P Diddy" Combs, wanted to prevent anybody from releasing any footage of her.
But Mr Stein confirmed Knight and his company quickly "acknowledged that there was no tape and they didn't have any tape with Jennifer involving any nudity".
The filed against unnamed defendants was left open because "we didn't know whether somebody else who was in some way affiliated with them would claim some kind of tape or ownership," Mr Stein added.
"We wanted to make sure we had a lawsuit on file so we could take immediate action," he added.
Knight's lawyer Michael Blaha confirmed the case had been settled but added the details were confidential.