Blake Lively vs. Justin Baldoni Lawsuit: Settlement and Legal Fees

The lawsuit between Blake Lively and Justin Baldoni began in December 2024, when Lively accused her It Ends with Us co-star and director of sexual harassment on set and of orchestrating a retaliatory smear campaign against her. Baldoni denied the allegations and countersued for $400 million. After 18 months of litigation, a judge dismissed Baldoni’s entire countersuit and later gutted most of Lively’s claims. The two sides settled in May 2026, weeks before trial. Lively received no money, but the court ruled she was entitled to her legal fees.

How the Dispute Started

It Ends with Us, adapted from Colleen Hoover’s novel about domestic violence, opened on August 9, 2024, and grossed $350 million worldwide.¹ By the premiere, the two leads were promoting the film separately, and online speculation about a rift had turned hostile toward Lively.

On December 20, 2024, Lively filed a complaint with the California Civil Rights Department alleging sexual harassment by Baldoni and Wayfarer Studios CEO Jamey Heath during filming.² The same day, the New York Times published “‘We Can Bury Anyone’: Inside a Hollywood Smear Machine,” drawing on thousands of pages of texts and emails obtained by Lively’s team.³ Within days, talent agency WME dropped Baldoni, and the advocacy group Vital Voices rescinded an award it had given him.¹

Lively converted her California complaint into a federal lawsuit in the Southern District of New York on December 31, 2024.²

What Lively Alleged

Harassment on Set

Lively’s complaint accused Baldoni of unwelcome comments about her appearance and weight, leaning in to kiss her without consent, and rubbing his face against her neck. She alleged that after she was asked to remove her jacket, exposing a lace bra, Baldoni said “pretty hot,” and when told the comment was inappropriate, responded: “Sorry, I missed the sexual harassment training.” She said Baldoni and Heath pressured her to perform a birth scene naked and filmed it over several hours without closing the set.⁴ She further alleged Heath entered her trailer while she was topless and showed her a nude video of his wife giving birth.⁵

In mid-November 2023, the parties agreed in writing to a set of production protections. Lively then negotiated a “Contract Rider Agreement” signed on January 19, 2024, requiring an intimacy coordinator during scenes with Baldoni, prohibiting non-consensual touching, and barring retaliation for raising misconduct concerns.⁶

The Alleged Smear Campaign

The second half of Lively’s case concerned what happened after filming wrapped. She alleged that Baldoni, Heath, and Wayfarer Studios hired crisis PR specialists to run a retaliatory campaign against her. Texts filed in court showed publicist Jennifer Abel writing to crisis communications expert Melissa Nathan: “I think we need to put the social combat plan into motion,” with Nathan replying, “So do I.” Another exchange showed Abel writing that Baldoni “wants to feel like she can be buried.”³

An amended complaint filed February 18, 2025, added Jed Wallace, a Texas-based social media consultant whose firm Street Relations allegedly ran “untraceable” campaigns amplifying negative content about Lively and suppressing negative content about Baldoni.⁷ Lively’s lawyers also alleged the defendants coordinated on Signal with auto-delete enabled and asked the court to draw an adverse inference from the destroyed messages.⁸

Baldoni’s $400 Million Countersuit

Baldoni denied all harassment allegations. His attorneys called Lively’s claims “exaggerated charges of misconduct” used to gain control of the film and described the alleged on-set conduct as “minor grievances.”⁹ His team argued the online backlash against Lively was “organic,” driven by fan reactions to her press-tour behavior rather than any paid campaign.⁸

On December 31, 2024, Baldoni sued the New York Times for $250 million, alleging the paper had “cherry-picked” messages to portray him as a villain. On January 16, 2025, he filed a $400 million countersuit against Lively, her husband Ryan Reynolds, and their publicist Leslie Sloane, alleging defamation, civil extortion, and invasion of privacy. The suit claimed Lively had “stole the film” by threatening to withhold promotion and had conspired to plant a “hit piece” in the Times.¹⁰ Unsealed texts later showed Baldoni telling his agent in December 2023 that Lively was “setting me up for a trap.”¹¹

Judge Lewis J. Liman of the Southern District of New York consolidated the cases under case number 24-cv-10049 on January 30, 2025.²

The Countersuit Is Dismissed

On June 9, 2025, Judge Liman dismissed Baldoni’s countersuit in full. On extortion, the judge found Baldoni had not shown that Lively’s alleged threats amounted to “wrongful extortion” rather than “legally permissible hard bargaining or renegotiation of working conditions.”¹⁰ On defamation against Lively, the judge ruled her harassment allegations were legally protected under a California law passed in the wake of #MeToo, foreclosing a defamation claim built on them.¹² On defamation against the Times, Baldoni, as a public figure, had to show actual malice; the court found his arguments “circumstantial and lacked adequate foundation,” and the paper’s reporting was also protected under the fair report privilege.¹³

Judge Liman offered Baldoni a chance to amend certain claims. Baldoni declined, and on October 31, 2025, a final judgment ended the countersuit.²

Most of Lively’s Claims Are Dismissed

On April 2, 2026, Judge Liman issued a ruling that dismissed 10 of Lively’s 13 claims, including the sexual harassment allegations at the heart of her case.⁶

The harassment claims failed on two grounds. First, the judge ruled Lively was an independent contractor rather than an employee, making her ineligible under Title VII of the Civil Rights Act.⁴ Second, her California state harassment claims were dismissed because the alleged incidents occurred during filming in New Jersey, which lacked the “substantial connection” to California the court required.¹⁴ The judge also observed that some of the alleged conduct occurred while Baldoni was “acting in the scene,” and that artists need room to experiment within a script. Claims for defamation, false light, and conspiracy were also thrown out.

Three claims survived and were headed to trial:

Retaliation under California law against It Ends With Us Movie LLC and Wayfarer Studios, based on the alleged post-production campaign to damage Lively’s reputation.
Aiding and abetting retaliation under California law against The Agency Group PR LLC.
Breach of the Contract Rider Agreement against It Ends With Us Movie LLC, based on the anti-retaliation clause Lively had negotiated.⁶

Judge Liman noted that hiring PR and crisis management specialists is generally permissible, but found “certain conduct at least arguably crossed the line.”¹⁴ The case had shifted from harassment to retaliation.

The May 2026 Settlement

On May 4, 2026, two weeks before a scheduled May 18 jury trial, the parties announced a settlement. A joint statement from their attorneys acknowledged the production “presented challenges” and expressed hope the resolution would “bring closure and allow all involved to move forward constructively and in peace, including a respectful environment online.”¹⁵

The terms became public on June 15, 2026. Lively received no financial compensation. Both sides agreed to end “all differences and disputes” and irrevocably waived all appellate rights.¹⁶ In the joint statement, Baldoni acknowledged that Lively’s claims “deserved to be heard.”¹⁷ Lively voluntarily dismissed her three remaining claims but preserved her right to pursue legal fees under California Civil Code Section 47.1.¹⁸

Both sides claimed victory. Lively’s attorney Michael Gottlieb called the preserved fee claim a “resounding victory.” Baldoni’s attorney Bryan Freedman pointed to the absence of any monetary payout as a “total victory” for his client.¹⁷

The Legal Fees Award

On June 12, 2026, Judge Liman issued a 47-page order granting Lively’s request for attorney’s fees tied to her defense against Baldoni’s dismissed countersuit. The ruling applied a California statute intended to prevent defamation suits from being used as weapons against people who bring sexual harassment complaints. Under the law, a plaintiff whose defamation claim is dismissed must pay the defendant’s legal fees unless the plaintiff can show the underlying complaints were made with malice. Judge Liman found that Baldoni and Wayfarer produced no evidence that Lively acted with malice in bringing her original claims.¹⁹

The judge denied Lively’s requests for punitive damages and for tripling of damages under the California statute, ruling those remedies fell outside “carefully crafted federal procedural rules designed to protect the rights of the parties.” The specific fee amount had not been set as of mid-June 2026, though Lively had initially sought $300 million in combined fees and damages.²⁰ Because the defendants had waived their appellate rights in the settlement, the fee ruling stands as the final word.²¹

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