May 16, 2026, 8:32 a.m. ET
Blake Lively and Justin Baldoni abruptly reached a legal settlement earlier this month in their nearly two-year-long battle over their dueling allegations of misconduct and smear campaigns around “It Ends with Us.”
The news broke just as Lively, 38, was about to step onto the Met Gala red carpet May 4, beaming for the cameras as she ascended the iconic steps of the Metropolitan Museum of Art in a flowing, pastel-hued Atelier Versace gown. It was a glitzy return to normalcy for the embattled “Gossip Girl” actress, who has been engaged in messy public mudslinging with Baldoni over claims of sexual harassment and retaliation.
“It’s no coincidence that Lively was on the red carpet just hours after the settlement was announced ‒ it was a tactical effort to begin the rebranding process in the minds of Hollywood and homes across America,” says Doug Eldridge, founder of Achilles PR.
But just three days later on May 7, attorneys for Lively said that she will continue to pursue damages against Baldoni, seeking compensation for her attorneys’ fees and other financial penalties stemming from his $400-million countersuit.
“Neither will have a straight path and the climb will inevitably be uphill, at least in the minds of the fans and consumers,” Eldridge adds. “For Hollywood stars, that’s the most important audience of all.”
Blake Lively, Justin Baldoni lawsuit made headlines before surprise settlement
Lively first sued Baldoni in late 2024, accusing him of mistreatment and inappropriate behavior on the set of Colleen Hoover’s domestic violence drama “It Ends with Us.” She further claimed that he and his team launched a “smear campaign” against her when she spoke out about his alleged misconduct.
Baldoni, 42, denied her claims and filed a countersuit accusing Lively and her husband, Ryan Reynolds, of defamation, igniting a public back-and-forth that was set to culminate in a federal trial beginning May 18.
Last month, a New York judge threw out 10 of Lively’s 13 claims, and both parties soon reached a settlement, calling for peace and closure in a remarkably amicable joint statement released May 4. But by seeking damages, Lively and her team now hope to have the final word in their legal sparring.
“By agreeing to this settlement, and waiving their right to appeal, Justin Baldoni and every individual defendant now face personal liability for abusing the legal system to silence and intimidate Ms. Lively,” Lively’s attorneys Michael Gottlieb and Esra Hudson said in a statement, according to the Los Angeles Times.
“They’re certainly on their way to being completely finished with this ‒ pending this one issue ‒ whether or not it blows up into a full-on evidentiary hearing,” says civil trial attorney Tre Lovell, who is not involved in the matter. “It’s interesting, because normally, all of the claims would be wrapped up into the settlement. In most cases, that’s what happens, and I’m assuming that Baldoni’s team probably tried to get that.”
But according to reports from TMZ and Variety, no money was exchanged in the settlement.
“If that’s the case, it was probably still a good deal [for Baldoni] to have settled that, saved money on attorneys’ fees for the trial, which would have been excessive, and then just try to challenge the punitive damages motion in court that [Lively’s team] wants to hold onto,” Lovell adds.
‘Victory’ for both Blake Lively and Justin Baldoni
It ultimately shouldn’t come as a surprise that Lively received no compensation in the settlement.
“Blake Lively doesn’t need the money ‒ at this point, I would venture to believe she wishes she’d never filed this lawsuit, given all the dirty laundry that has come out,” Lovell says. “She’s holding his feet to the fire on the attorneys’ fees, which I think is her way of saving face, in a way.”
A judge tossed out Baldoni’s $400-million countersuit last summer, saying that Lively’s statements are protected under anti-SLAPP laws, which prevent individuals accused of harassment from suing their accusers for speaking about their experiences.
“Basically, if somebody makes a sexual harassment claim, you can’t come after them for defamation unless they made it knowingly false,” Lovell says. “That ties into [Lively] still being an advocate for sexual harassment. She can save a little bit of face by leaning on that statute and pushing for some type of compensation.”
In the days since the settlement was reached, Lively’s attorneys released a statement calling it a “resounding victory” for the “A Simple Favor” star, while Baldoni’s team countered with their own statement calling it a “total victory” on their part.
“They both have a right to claim victory,” says Nisha Verma, an employment attorney who is not involved with the case. “Each party won on significant and novel issues within their respective cases. … I would say there was good lawyering all around with respect to those motions.”
Baldoni, Lively must win back the masses after going for ‘the jugular’
So what happens now? Once the dust settles, both Lively and Baldoni will be tasked with rehabilitating their reputations, and attention will inevitably turn to the next high-profile celebrity case. But repairing one’s image is easier said than done.
“The lawsuit being public set them both up to appear like they were going for the jugular,” Verma says. Eventually, “their feud is going to come up less in the media, and it’s possible the public could move on and be able to focus on their work. Millennials grew up with Lively, and even if there was a distaste for some of the litigation activity, it’s unlikely for them to abandon her altogether.”
But “with Baldoni, I don’t think the connection’s that strong,” Verma continues. “More people know him because of this lawsuit than ever before. So for him to turn a fresh page past this – I think this probably damaged his reputation more than hers.”
