In June 2012, the "Crouching Tiger, Hidden Dragon" actress sued the U.S.-based newspaper and Weican Null Meng, who wrote an article saying she earned more than $100 million for having sex with high-ranking Chinese officials, including ousted former Communist Party leader Bo Xilai, The Hollywood Reporter said.
Zhang demanded the journalist reveal the anonymous sources who told him the actress was a prostitute, but he refused.
"Either divulge their anonymous sources inside the People's Republic of China so that they may be subject to cruel, unusual and inhumane persecution, or surrender their own rights to free expression under the United States Constitution," Meng's lawyer said.
"If reporters are permitted to write false statements and then hide behind anonymous sources known only to them allegedly out of concern about what might happen to such sources if they are disclosed, they can say whatever they want with impunity," Zhang's lawyers argued.
A Los Angeles judge ruled the two parties should undergo mediation, and on Thursday they announced a settlement for an undisclosed amount, The Hollywood Reporter said.