The settlement reached on Monday may have averted a public trial, but the legal friction between Blake Lively and Justin Baldoni is far from over. On Thursday, May 7, 2026, Lively’s legal team made a calculated final move, filing for damages and the reimbursement of legal fees based on a specific 2023 California statute designed to protect victims of harassment.
The “Retaliatory” Fee Claim
Despite the broader settlement, Lively is seeking to hold Baldoni and Wayfarer Studios financially accountable for the defamation lawsuit they filed against her in 2024 (which was dismissed last June).
Lively’s attorneys, Michael Gottlieb and Esra Hudson, are utilizing a relatively new California law that penalizes “retaliatory” defamation suits—legal actions intended to silence or intimidate those who speak out about sexual harassment.
“Justin Baldoni and every individual defendant now face personal liability for abusing the legal system to silence and intimidate Ms. Lively,” her lawyers stated in a joint filing in Manhattan federal court.
A War of Words: Resounding Victory vs.Total Victory
Both camps are currently engaged in a strategic PR battle to frame the settlement in their favor:
Lively’s Team: Labels the settlement a “resounding victory,” arguing that by waiving the right to appeal, Baldoni has opened himself up to these specific fee-based damages.
Baldoni’s Team: Lawyer Bryan Freedman countered that the settlement was a “total victory” for the director, alleging that Lively settled because she realized her case wouldn’t hold up in court. Freedman dismissed the new filing as a “pending request for fees based on a very narrow issue.”
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Context: A Troubled Production
The dispute stems from the filming of the 2024 blockbuster It Ends With Us. What began as creative differences reportedly escalated into a toxic workplace environment, leading to Lively’s December 2024 complaint with the California Civil Rights Department.
While the May 18 trial is officially off the calendar, this latest filing ensures that the financial fallout of the “Hollywood Smear Machine”—as famously dubbed by the New York Times—will continue to be litigated in the weeks to come.