Here's the link to a video h3h3 made explaining the whole situation.
So what I've understood so far is that someone got made fun of on one of h3h3's videos, and didn't like it, so he sued h3h3. If you think that sounds silly, you should watch the video and see what the terms of settlement were. Wow. Just, wow...
I do like what has come out of the whole situation. Majority of the money raised for the lawsuit was stored into an account under the protection of Morrison Lee and will only be used for the purpose of fair use protection and to support people who are being bullied through such lawsuits.