Blake Lively Lawsuit: Countersuit Dismissal, Settlement, and Fees

Blake Lively’s lawsuit against Justin Baldoni, his production company Wayfarer Studios, and their publicists ended in a May 2026 settlement in which no money changed hands, followed by a June 2026 order awarding Lively her attorney fees under California’s anti-SLAPP-style survivor protection statute. By the time the case settled, a federal judge had already dismissed most of Lively’s claims and thrown out Baldoni’s $400 million countersuit in full.

What Lively Alleged

Lively played the lead role of Lily Bloom in the 2024 film It Ends With Us, directed by and co-starring Baldoni. She also served as a producer. Her allegations fell into two buckets: sexual harassment on set during 2023 production in New Jersey, and a coordinated retaliatory smear campaign run during the film’s 2024 promotion.

On the on-set side, Lively alleged that Baldoni and Wayfarer CEO Jamey Heath repeatedly entered her trailer uninvited while she was undressed or breastfeeding, shared personal sexual experiences without her consent, and pressured her to simulate full nudity during a birth scene the script did not call for. She alleged that Heath stared at her on May 16, 2023, while she was topless and having body makeup removed, despite her request that he turn around.¹ She also alleged that Baldoni improvised physical intimacy during a June 2023 dance scene.² Baldoni denied these characterizations.

After production paused for the 2023 strikes, Lively’s attorney sent Wayfarer a list of seventeen “protections for return to production” on November 9, 2023, including required intimacy coordinators and signed nudity riders before rehearsing intimate scenes. Those protections were formalized in a Contract Rider Agreement signed by Heath and Lively in January 2024.³

On the smear-campaign side, Lively’s filings alleged that Baldoni and Wayfarer hired crisis publicists to bury her online during the August 2024 press tour. Text messages surfaced in discovery. Publicist Jennifer Abel told crisis manager Melissa Nathan, “I think we need to put the social combat plan into motion.” Another publicist wrote to Nathan on August 2, 2024: “He wants to feel like she can be buried.”⁴ Nathan proposed services for “full social account take downs” and starting “threads of theories” that would be “most importantly untraceable,” and later relayed a message attributed to Texas consultant Jed Wallace: “We are crushing it on Reddit.”⁵ Baldoni, his publicists, and Wallace denied the allegations.

The Lawsuit She Filed

Lively filed an administrative complaint with the California Civil Rights Department on December 20, 2024. The next day, a New York Times article laid out her allegations, and WME dropped Baldoni as a client within hours.⁶

On December 31, 2024, Lively filed her federal lawsuit in the U.S. District Court for the Southern District of New York. The complaint named ten defendants, including Wayfarer Studios, Baldoni, Heath, Wayfarer co-founder Steve Sarowitz, publicists Nathan and Abel, their firms, and Wallace’s firm Street Relations. Her claims included sexual harassment, retaliation, breach of contract, false light invasion of privacy, defamation, and civil conspiracy.⁷

An amended complaint in February 2025 added Wallace as a named defendant and stated that actresses Jenny Slate and Isabela Ferrer were willing to testify.⁸ Testimony unsealed in January 2026 described Baldoni calling Slate and Lively “hot” or “sexy” on set, and telling Ferrer, while directing her character’s first sexual experience, “I’m not supposed to say this, but that was hot.”⁹

Baldoni’s $400 Million Countersuit and Its Dismissal

The same day Lively sued, Baldoni and his publicists filed a $250 million libel suit against the New York Times in Los Angeles County Superior Court.¹⁰ In January 2025, Baldoni and Wayfarer followed with a $400 million countersuit in the Southern District of New York against Lively, Ryan Reynolds, and Lively’s publicist, alleging civil extortion, defamation, breach of contract, and invasion of privacy.¹¹ Judge Lewis J. Liman consolidated the cases on January 30, 2025.⁶

On June 9, 2025, Judge Liman dismissed Baldoni’s countersuit in full. He ruled that Baldoni, as a public figure, failed to meet the “actual malice” standard from New York Times v. Sullivan, finding the arguments “circumstantial and lacked adequate foundation.” The judge also applied the litigation privilege to Lively’s court filings and the fair report privilege to the newspaper’s coverage.¹² Baldoni was given leave to amend some claims but did not, and final judgment was entered on October 31, 2025.¹¹

What Survived Summary Judgment

On April 2, 2026, after what Judge Liman called an “extensive and fiercely contested discovery process,” the court dismissed most of Lively’s claims and let three go forward.³

The sexual harassment claims failed on two independent grounds. First, the court found Lively was an independent contractor rather than an employee, applying the factor tests from Community for Creative Non-Violence v. Reid and Nationwide Mutual Insurance Co. v. Darden. The judge cited her extensive control over the production, including approval rights over scripts, directors, co-leads, hair and makeup, and music, along with her flat-fee payment, specialized skills, and the limited duration of the engagement. Second, the California Fair Employment and Housing Act harassment claims could not reach conduct that took place in New Jersey, because the court declined to apply the California statute extraterritorially.¹³

Three claims survived:

Retaliation under California’s FEHA against It Ends With Us Movie LLC and Wayfarer Studios, because the alleged retaliatory acts were directed from California and a FEHA retaliation claim does not require an employment relationship.³
Aiding and abetting retaliation against The Agency Group PR LLC.³
Breach of the Contract Rider Agreement against It Ends With Us Movie LLC.³

All claims against Wallace and Street Relations had been dismissed earlier for lack of personal jurisdiction, and Sarowitz was effectively out because he was not named on any surviving count.³

The May 2026 Settlement

Lawyers for both sides confirmed a settlement on May 4, 2026, and filed a Notice of Settlement and Stipulation on May 7. Lively received no financial compensation. Baldoni and the other defendants dropped their countersuit and irrevocably waived their right to appeal, and Lively voluntarily dismissed her remaining claims. The agreement preserved her right to keep pursuing attorney fees and damages under California Civil Code Section 47.1.¹⁴

In a joint statement, attorneys said: “We acknowledge the process presented challenges and recognize concerns raised by Ms. Lively deserved to be heard. We remain firmly committed to workplaces free of improprieties and unproductive environments. It is our sincere hope that this brings closure and allows all involved to move forward constructively and in peace.”¹⁵ Lively’s legal team called the outcome “a resounding victory.”¹⁴

Attorney Fees Awarded, Damages Denied

On June 12, 2026, Judge Liman issued a 47-page order granting Lively attorney fees under California Civil Code Section 47.1, the “Protecting Survivors from Weaponized Defamation Lawsuits Act.” The court found Lively was a “prevailing defendant” against Baldoni’s countersuit and that her sexual misconduct complaints were made “without malice.”¹⁶

The judge denied Lively’s request for treble and punitive damages, ruling that Section 47.1 “does not create an end run around the entire set of carefully crafted federal procedural rules” and that such damages would have to be sought through a separate counterclaim or lawsuit.¹⁷ Her attorneys said the settlement preserves her right to pursue those damages elsewhere.¹⁸

Related Cases

Several satellite lawsuits ran alongside the main case. Jed Wallace and Street Relations sued Lively for defamation in the Western District of Texas in February 2025, seeking more than $7 million. A federal judge dismissed that suit on November 17, 2025, for lack of personal jurisdiction.¹⁹

Stephanie Jones and her firm Jonesworks sued publicists Abel and Nathan, along with Baldoni and Wayfarer, in New York in December 2024, alleging the publicists stole proprietary documents and clients. Abel filed counterclaims accusing Jonesworks of turning her work phone over to Lively’s team. Most of Abel’s counterclaims were dismissed on October 3, 2025, though her California computer fraud and conversion claims survived.²⁰

After Baldoni’s defamation claims against the New York Times were tossed, the newspaper filed its own action against Wayfarer in New York Supreme Court on September 30, 2025, seeking at least $150,000 in legal fees and costs under New York’s anti-SLAPP law.²¹

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