The legal saga between Blake Lively and Justin Baldoni, the two stars whose creative friction on the set of It Ends With Us became public fodder, has reached a conclusion that is anything but final. While their attorneys announced a settlement on May 4, a subsequent filing in a Manhattan federal court suggests that the “end” of the dispute is more of a tactical pause than a total resolution.
For the casual observer, a settlement usually implies a closed book and a signed check. However, the notice of settlement filed on May 7 reveals a critical carve-out: Blake Lively is not releasing her claims for attorneys’ fees, treble damages, and punitive damages. This means that while the “heart of the matter”—the primary trial—has been avoided, a significant financial battle remains in the hands of a judge.
At the center of this latest twist is a specific piece of California legislation designed to shield survivors of sexual misconduct from the very tactics that defined this legal war: retaliatory lawsuits. By invoking this law, Lively’s team is attempting to turn a settlement into a financial penalty for Baldoni, arguing that his legal response was an attempt to silence her.
The complexity of the filing highlights a broader trend in high-stakes celebrity litigation, where the goal is often not just a monetary payout, but a definitive legal declaration of “victory” to protect one’s brand and reputation. In this instance, the settlement is less a peace treaty and more a transition from a jury trial to a judicial ruling.
The ‘Anti-Retaliation’ Clause: Why the Case Isn’t Over
To understand why the battle continues, one must look at California Civil Code Section 47.1. Passed in 2023 as a response to the #MeToo movement, this law provides a critical safety net for plaintiffs who file sexual misconduct claims in good faith. Its primary purpose is to prevent the “chilling effect” caused by retaliatory defamation lawsuits—where an accused party sues the accuser for millions of dollars to intimidate them into silence.
Lively’s legal team, led by Michael Gottlieb and Esra Hudson, is now arguing that she is entitled to legal fees and punitive damages because her initial sexual harassment complaint was filed “without malice.” Under Section 47.1, if a judge determines that the initial claim was reasonable and the subsequent defamation suit was retaliatory, the court can award the plaintiff significant damages.
This represents a high-stakes maneuver. As NBC News senior legal correspondent Laura Jarrett noted, it is surprising that this was not handled as part of the primary settlement negotiations. By leaving this to the judge, both parties have entered a “winner-take-all” scenario regarding the fees. Crucially, both sides have agreed to irrevocably waive their right to appeal any order the judge makes on this matter. The ruling will be final, leaving no room for further litigation.
A War of Attrition: The Road to the Settlement
The path to this settlement was marked by a series of “gutting blows” for both parties, as U.S. District Judge Lewis J. Liman systematically dismantled the most extreme claims of the case. The litigation evolved from a set-dispute into a sprawling federal battle involving not just the two leads, but also Ryan Reynolds and Lively’s public relations team.
| Date | Legal Action / Ruling | Outcome |
|---|---|---|
| Dec 2024 | Lively files harassment complaint | Alleged boundaries crossed during intimate scenes. |
| Jan 2025 | Baldoni files federal lawsuit | Accused Lively and others of defamation and contract breaches. |
| June 2025 | Judge Liman’s First Major Ruling | Baldoni’s $400 million defamation countersuit is dismissed. |
| April 2026 | Judge Liman’s Second Major Ruling | 10 of Lively’s 13 claims (including harassment) are thrown out. |
| May 2026 | Notice of Settlement filed | Primary trial avoided; damages under CA law pending. |
The dismissal of Baldoni’s $400 million countersuit in June 2025 was a massive victory for Lively, removing the existential financial threat of a nearly half-billion-dollar judgment. However, the tide turned in April 2026 when Judge Liman dismissed the bulk of Lively’s claims, including the sexual harassment allegations. It was this specific blow that likely forced both parties to the settlement table, as neither side could guarantee a victory at trial.
Conflicting Victories: Who Actually Won?
In the wake of the May 4 settlement, both legal teams have engaged in a public relations battle to define the outcome. Because the terms of the settlement remain undisclosed—and a source confirmed to NBC News that no money changed hands—the “victory” is being measured in narrative rather than dollars.
Lively’s attorneys frame the settlement as a triumph of accountability. They point to the joint statement acknowledging that Lively’s concerns “deserved to be heard” as a tacit admission that her claims were not fabricated. From their perspective, the waiver of the right to appeal leaves the defendants personally liable for “abusing the legal system.”
Conversely, Bryan Freedman, representing the Wayfarer parties, describes the outcome as a “total victory” for Baldoni. His argument is based on the judicial record: the court had already dismissed nearly all of Lively’s claims before the settlement was reached. In Freedman’s view, Lively settled because she knew she would lose the remaining three claims at trial.
The reality is likely found in the middle. Both parties avoided the unpredictability of a jury and the public spectacle of a trial, but they have left a narrow, potent legal window open. The final word now rests with the judge, who must decide if the filing of the original complaint was a good-faith effort to ensure set safety or a move made with malice.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.
The next official checkpoint in this dispute will be the judge’s ruling on the Motion for Attorneys’ Fees and Punitive Damages under California Civil Code Section 47.1. While there is no set timetable for this decision, it represents the final legal hurdle in a conflict that has spanned nearly two years.
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