Lively v. Baldoni & Heath LLC: Countersuit, Settlement, Fees

Blake Lively’s lawsuit against Justin Baldoni, filed on December 31, 2024 in the Southern District of New York, accused her It Ends With Us director and co-star, producer Jamey Heath, and Wayfarer Studios of sexual harassment on set and a coordinated smear campaign to retaliate against her for complaining. After more than a year of litigation, most of her claims were dismissed, Baldoni’s $400 million countersuit was thrown out entirely, and the parties settled in May 2026 weeks before trial. Lively received no money in the settlement, but a judge later ordered Wayfarer to cover her attorney fees.

What Lively Alleged Happened on Set

The film adaptation of Colleen Hoover’s novel about domestic violence was directed by Baldoni, who also starred opposite Lively. Heath was lead producer and CEO of Wayfarer Studios, the company Baldoni co-founded with Paylocity founder Steve Sarowitz.¹

According to Lively’s complaint, Baldoni and Heath repeatedly crossed physical boundaries, made sexual comments, discussed their “pornography addiction,” and showed her graphic personal material without consent. One allegation involved Heath showing Lively and her assistant a fully nude video of his wife giving birth “without warning or consent.”² Other female cast and crew members reportedly voiced discomfort with the men’s conduct.³

The January 2024 Meeting and Contract Rider

After a production hiatus caused by industry labor strikes, Lively, her husband Ryan Reynolds, Baldoni, and other production figures met in January 2024 to address what her complaint described as a “hostile work environment.” The meeting produced a list of protections, including mandatory intimacy coordinators for scenes involving nudity or sexual content, a ban on uninvited visits to Lively’s trailer, and a prohibition on further sexual comments by Baldoni or Heath toward any female cast or crew member.³

These protections were formalized in a Contract Rider Agreement signed by Heath on behalf of the production entity, It Ends With Us Movie LLC. Paragraph 10 explicitly prohibited retaliation against Lively for raising concerns about workplace misconduct.¹ That clause became central to the case that eventually went forward.

The Alleged Smear Campaign

It Ends With Us opened on August 9, 2024 and grossed roughly $350 million worldwide.⁴⁵⁶

Excerpts from text messages and emails obtained via subpoena painted a picture of deliberate narrative management. On August 2, 2024, a publicist working with Baldoni wrote to Nathan: “He wants to feel like she can be buried.” After the campaign gained traction online, Abel called the result a “total success,” writing that “the narrative online is so freaking good and fans are still sticking up for Justin.” Nathan added that the “narrative is CRAZY good” and that “the majority of socials are so pro Justin.”⁵

A related suit by Jonesworks founder Stephanie Jones alleged that Abel and Nathan also planted negative stories in outlets including the Daily Mail and the New York Post‘s “Page Six,” and used Reddit and TikTok to amplify negative content. Abel allegedly coordinated with a Page Six reporter who was Nathan’s sister.⁷

What Lively Filed and What She Sought

Lively first filed a complaint with the California Civil Rights Department on December 20, 2024. Eleven days later, on December 31, she filed Lively v. Wayfarer Studios LLC, Case No. 1:24-cv-10049, in the Southern District of New York.⁸ The complaint named Baldoni, Heath, Sarowitz, Wayfarer Studios, It Ends With Us Movie LLC, Nathan, The Agency Group PR LLC, and Abel.

Her 13-count complaint drew on both federal and state law. Federal claims relied on Title VII of the Civil Rights Act of 1964 for sexual harassment and retaliation. Her California claims invoked the Fair Employment and Housing Act, the California Labor Code, and California Civil Code Section 51.9, among other statutes. She also brought common law claims for breach of contract, defamation, civil conspiracy, and false light invasion of privacy.¹ Lively sought nearly $500 million in damages.⁴

Baldoni’s Countersuit and Its Dismissal

On January 16, 2025, Baldoni and Wayfarer filed a $400 million lawsuit against Lively, Reynolds, and their publicist Leslie Sloane of Vision PR, alleging civil extortion, defamation, false light, and tortious interference. The countersuit claimed Lively had “stolen” the film by threatening to refuse to promote it and to attack Baldoni publicly unless she was given control and credit.⁹ Baldoni also filed a $250 million libel suit against The New York Times on December 31, 2024 over its reporting on the alleged smear campaign.

Judge Lewis J. Liman consolidated the dueling cases in late January 2025 and imposed a gag order, which he called the “Empire State rule,” barring both sides from making extrajudicial statements that could influence a jury.¹⁰

On June 9, 2025, Judge Liman dismissed Baldoni’s countersuit in full. He held that the alleged threats by Lively were not civil extortion under California law but “legally permissible hard bargaining or renegotiation of working conditions.” Defamation claims failed because the statements were in Lively’s own privileged legal filings, and the claims against The New York Times were dismissed for lack of evidence of actual malice.¹¹⁹ Sloane and Vision PR were dismissed with prejudice.¹² Baldoni was given leave to amend certain tortious interference claims but declined, and final judgment was entered on October 31, 2025.¹³

How the Court Narrowed Lively’s Case

On April 2, 2026, Judge Liman issued a sweeping ruling on the defendants’ motions for judgment on the pleadings and summary judgment. He dismissed most of Lively’s 13 claims, including all Title VII claims. The court found that Lively was an independent contractor rather than an employee, placing her outside the reach of the federal workplace discrimination statute.⁴ Her sexual harassment claims were also dismissed, with the judge ruling that Baldoni’s suggestions regarding sexually charged scenes were not legally actionable.

Three claims survived. Lively’s California law retaliation claim against It Ends With Us Movie LLC and Wayfarer Studios remained, along with an aiding-and-abetting retaliation claim against The Agency Group PR LLC and a breach of contract claim under the Contract Rider Agreement against the production entity.¹ The trial heading to a jury was no longer about the alleged harassment itself. It was about whether the defendants retaliated against Lively for complaining.

The Settlement

Trial was scheduled for May 18, 2026. In early May, the parties settled. Lively received no financial compensation in the deal.¹⁴ The agreement resolved “all differences and disputes” and included a mutual waiver of appellate rights. It expressly left open Lively’s pending motion for attorney fees under California Civil Code Section 47.1, the Protecting Survivors from Weaponized Defamation Lawsuits Act, with both sides agreeing that Judge Liman’s ruling on that motion would be final and unappealable.¹⁵

A joint statement released through counsel acknowledged the film “is a source of pride to all of us who worked to bring it to life” and that “concerns raised by Ms. Lively deserved to be heard.” The statement expressed a commitment to “workplaces free of improprieties and unproductive environments” and a hope for “closure” and a “respectful environment online.”¹⁶

The Attorney Fees Ruling

On June 12, 2026, Judge Liman issued a 47-page order granting Lively’s motion for attorney fees. He found she qualified as a prevailing defendant under Section 47.1, concluding her sexual misconduct complaints had been made “without malice” and that the defamation suit against her met the criteria for the kind of retaliatory litigation the statute was designed to deter. He denied her request for treble and punitive damages, ruling those remedies were unavailable through the procedural mechanism she had used.¹⁷¹⁸

As of mid-2026, Lively’s legal team had not yet submitted the billing records needed to determine the specific dollar amount Wayfarer Studios would owe.¹⁹

1
United States District Court, S.D.N.Y. Lively v. Wayfarer Studios LLC, Opinion and Order
2
People. Blake Lively Claims It Ends With Us Producer Failed to Hand Over Alleged Video of His Nude Wife Giving Birth
3
BBC News. Blake Lively Justin Baldoni It Ends With Us Legal Battle
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ABC News. Blake Lively Justin Baldoni Legal Battle Timeline
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The New York Times. Blake Lively Justin Baldoni It Ends With Us
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The Hollywood Reporter. It Ends With Us Blake Lively Justin Baldoni Fight PR Battle
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Deadline. Jones v. Abel, Proposed First Amended Complaint
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CourtListener. Lively v. Wayfarer Studios LLC
9
ABC News. Justin Baldoni’s Lawsuit Against Blake Lively Dismissed by Federal Judge
10
Deadline. Blake Lively Justin Baldoni Feud Timeline
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BBC News. Judge Dismisses Baldoni Countersuit Against Lively
12
Boies Schiller Flexner LLP. BSF Secures Motion to Dismiss for Client
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ABC News. Justin Baldoni’s $400M Countersuit Against Blake Lively Ended by Judge
14
Deadline. Blake Lively Settlement Details Justin Baldoni
15
USA Today. Blake Lively Justin Baldoni Settlement Agreement Revealed
16
NPR. Blake Lively Justin Baldoni Settle Before Trial Over It Ends With Us
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The New York Times. Blake Lively Legal Fees Ruling Justin Baldoni Settlement
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Variety. Blake Lively Attorney Fees Justin Baldoni It Ends With Us
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Los Angeles Times. Blake Lively Awarded Legal Fees From Justin Baldoni but Not Damages