US District Judge Nannette Olivette Brown dismissed the case on Monday after the plaintiffs "firmly agreed" to a compromise, according to documents filed in federal court in New Orleans.
The case could be re-opened if the settlement, details of which were not disclosed, is not consummated within 60 days.
The case against the now-defunct US independent was brought by the families of the three Filipino guest workers who were killed in the blaze and others who say they were harmed in the incident.
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