Kyle claimed he punched Ventura in the face at a bar in San Diego, and was dumb enough to go public with the story. Jesse sued him for libel and defamation, and the case was apparently due to start this summer. If Kyle lost the suit, it could have been embarrassing for the Navy.
It should be noted that Ventura himself thought the allegations by Kyle were part of an organized plan, and not just the words of a braggart:
http://www.theblaze.com/stories/navy-seal-smackdown-jesse-ventura-denies-snipers-story/
. .....I am perplexed over the agenda this man has and why a fellow Navy Seal would tell a lie about an event that never happened. Clearly between this story and the previous week’s story about supposedly getting pulled over for tailgaiting (sic) in CA that was also a lie, someone is out to destroy my credibility. I find it very interesting that both these stories are being spread by Fox news and it’s (sic) affiliates. ....