That figure is for damages, presumably the number would have been lower if her team hadn't ignored the copyright owner trying to reach out directly—and much lower if they'd asked for a license before the tattoo.

> Plaintiff Jeffrey Sedlik reached out to Kat Von D 'artist to artist' (through her representatives) seeking an amicable resolution of the matter prior to filing suit, but Ms. Von Drachenberg chose to ignore Mr. Sedlik’s good faith effort to avoid litigation.

[from linked Billboard article]

I think part of the deal with asks like $150k for damages like this are a) lawyers will eat a lot of it and b) if the judge sides with the original artist, they might not award the full amount anyway. Ultimately they may just end up with the licensing fee they lost and some compensation for time lost having to chase that fee. It seems greedy but it might be more indicative of a dysfunctional legal system? I’m not sure, just adding a couple cents.

It's legal negotiation. You sue for the maximum allowable penalty/damages in hopes of settling for something in between the maximum and zero.