Blake Lively could still score legal payout from Justin Baldoni as both claim victory after settlement

Just when it seemed like the legal battle between Blake Lively and Justin Baldoni was finally over, a new twist revealed the fight is not completely over yet.

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After months of lawsuits, countersuits, and public back-and-forth tied to It Ends With Us, the two sides reached a last-minute settlement hours before the Met Gala, just weeks before trial, with neither of them earning a payout. 

But according to TMZ, despite the agreement, Lively is still pursuing one remaining claim against Baldoni and the Wayfarer parties related to the defamation suit previously filed against her.

According to newly filed documents acquired by the outlet, part of the settlement allows Lively to continue seeking attorneys’ fees along with compensatory and punitive damages under a California law designed to protect people who report sexual harassment or retaliation from retaliatory defamation lawsuits.

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Instead of heading to a jury trial, the remaining issue will now be decided directly by the judge, who will determine whether Baldoni’s side owes damages or fees, and how much. TMZ notes that Baldoni has "already agreed to abide by whatever the judge decides on the matter."

Under the California statute, Lively now has to prove that she successfully defeated the defamation claims against her, that the lawsuit was connected to her allegations of harassment or retaliation, and that her statements were made without malice, per PEOPLE. One major condition of the settlement is that neither side can appeal whatever decision the judge ultimately makes.

Still, both camps are already framing the outcome as a win. The move comes after Baldoni’s $400 million defamation countersuit against Lively, Ryan Reynolds, and her publicist was dismissed by the judge.

“This settlement is a resounding victory for Blake Lively,” her attorneys Michael Gottlieb and Esra Hudson said after details of the agreement emerged. "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."

Following the settlement, both sides seemed more united in a joint statement. But it might be what bites Baldoni. “By admitting that Ms. Lively’s concerns ‘deserved to be heard,’ the defendants have ended once and for all the fiction that Ms. Lively fabricated claims of sexual harassment and retaliation," her attorneys continued. "From day one Blake Lively’s mission was clear: expose and hold accountable those who weaponize smear campaigns and retaliatory lawsuits to intimidate and silence survivors. That mission continues."

A Lively insider also told TMZ, it was "never about money."  It was about "exposing bad actors who are also harming others," they said, adding that she didn’t settle her claims "until the documents exposing the bad actors behind smear campaigns were made public – documents that have led to other lawsuits and investigations. With this motion, she is breathing life into a groundbreaking statute designed to protect survivors from retaliatory lawsuits."

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Meanwhile, Baldoni’s attorney Bryan Freedman strongly rejected that narrative in a statement to TMZ. “Let’s be clear, this is a win and total victory for the Wayfarer parties,” he said. “The court had already dismissed 10 of Ms. Lively’s 13 claims, including every sexual harassment claim, every defamation claim, and all claims against the individual defendants. Ms. Lively voluntarily dismissed the rest. In our view, they settled because they knew they were going to lose in court.”

Freedman added that “all that remains is a pending request for fees based on a very narrow issue that has been with the court since September 2025.”

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The legal battle first exploded in December 2024 when Lively accused Baldoni, her co-star and director on It Ends With Us, of sexual harassment. Baldoni denied the allegations and countersued for defamation and extortion before much of the case was eventually dismissed.

Even with a settlement in place, the case still has one final chapter left, and both sides seem convinced they've won. But in the end, the court of public opinion may be the most important when it comes to their careers.