Katie Holmes was outraged after Star magazine published a cover in January reading, "Addiction Nightmare: Katie Drug Shocker! The real reason she can't leave Tom," complete with a picture of the 32-year-old looking spaced out.
The article inside the magazine talks about a device that Scientologists use called an e-meter which they claim has "an effect similar to heroin" because it "emits a low-level electric charge that goes to the brain." The magazine goes on to say that this device may cause an "endorphin release" as well as a crash and craving for more, similar to heroin or opium.
The magazine didn't technically allege drug use, however, Holmes felt the cover insinuated that she was on drugs.
"Star magazine's malicious claims about Katie are untrue, unethical and unlawful. Not only do they cruelly defame Katie, they play a cheap trick on the public, making ridiculously false claims on the cover unsupported by anything inside," Holmes' attorney tells TMZ. "Someone should bring a class action to get all buyers their money back."
Star is now apologizing to Holmes with a cover that says, "Star apologizes to Katie Holmes," and an inside statement reading:
"Star did not intend to suggest that Ms. Holmes was a drug addict or was undergoing treatment for a drug addiction. Star apologizes to Ms. Holmes for any misperception and will be making a substantial donation to charity on Ms. Holmes' behalf for any harm that we may have caused."
The financial terms of the settlement were not disclosed, however, The Kennedys actress said she does accept their apology. "I'm pleased that this lawsuit could be resolved amicably and accept American Media's apology."