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Just when Hollywood thought the explosive legal saga between It Ends With Us co-stars Blake Lively and Justin Baldoni had finally reached its closing credits, the two are back in the headlines and the courtroom.
Only weeks after signing a highly publicized out-of-court settlement that effectively canceled a scheduled May 2026 jury trial, attorneys for both A-listers returned to a Manhattan federal court on Monday. The reason? A high-stakes battle over multi-million-dollar legal fees and punitive damages that threatens to blow the entire dispute wide open again.
The New Battleground: California’s Fee-Shifting Laws
While the core of Lively’s civil lawsuit regarding on-set behavior was put to rest in May, her legal team is now aiming to collect substantial financial penalties from Baldoni.
Lively’s attorney, Michael Gottlieb, argued before U.S. District Judge Lewis J. Liman that Lively is legally entitled to have Baldoni cover her attorney’s fees, litigation expenses, and additional punitive damages. They are leveraging a powerful California #MeToo statute designed to protect individuals who report workplace sexual harassment or retaliation from being silenced by retaliatory defamation lawsuits.
Last year, Baldoni and his production company, Wayfarer Studios, had filed an aggressive $400 million defamation countersuit against Lively and her husband, Ryan Reynolds, claiming the couple had engineered a smear campaign to “destroy” him and hijack the film’s creative direction. Because Judge Liman fully dismissed Baldoni’s defamation claim last summer, Lively’s legal team argues she is the “prevailing defendant” under the California law, which mandates that unsuccessful retaliatory suits are subject to automatic triple damages.
The Legal Argument: Lively’s counsel asserts that Baldoni’s massive countersuit was exactly the kind of “protracted and damaging legal fight” the California legislation was built to prevent.
Baldoni’s Camp Fires Back: An “End Run” Around the Settlement
Neither Lively nor Baldoni were physically present for the hour-long hearing on Monday, but their legal representatives made the tension in the room palpable.
Baldoni’s attorney, Ellyn Garofalo, fiercely resisted the move, characterizing Lively’s post-judgment motion as a blatant attempt to bypass the spirit of their recent truce. Garofalo argued that Lively is essentially trying to orchestrate an alternative trial after choosing to walk away from a jury.
Furthermore, Garofalo shed new light on the confidential May settlement, revealing that Lively chose to dismiss her remaining claims without Baldoni or Wayfarer Studios paying “a single cent of the $300 million in damages she was demanding.”
According to Baldoni’s defense, reopening the case to litigate attorney fees and punitive damages would require a painful unraveling of the progress made:
- Reopening discovery
- Introducing new expert witnesses
- Re-litigating claims that were supposedly buried by the settlement
How Did We Get Here?
The courtroom drama stems from the notoriously fraught production of the 2024 cinematic adaptation of Colleen Hoover’s bestselling novel It Ends With Us.
The feud originally spilled into the legal system in late 2024 when Lively sued Baldoni, who directed and co-starred in the dark romantic drama accusing him of making inappropriate comments on set, violating physical boundaries during a love scene, and pushing for unscripted nudity.
The case took multiple dramatic turns over the next year and a half, including Baldoni attempting to subpoena pop star Taylor Swift over her alleged behind-the-scenes involvement in scene rewrites. By April 2026, Judge Liman had gutted 10 of Lively’s 13 claims, ruling that her core sexual harassment allegations could not proceed under federal employment law because she operated as an independent contractor on set rather than an employee.
With only retaliation and breach of contract claims left against Wayfarer Studios, both parties opted to settle out of court in May, releasing a joint statement affirming that workplaces should be “free of improprieties.”
What Happens Next?
The fate of this post-settlement legal aftershock rests entirely in the hands of Judge Liman, who reserved his decision at the end of Monday’s hearing.
Because Baldoni has reportedly agreed to accept the judge’s bench ruling without a jury, whatever Liman decides next will be final. If the court rules in Lively’s favor, Baldoni could be handed a massive bill for one of the most expensive legal battles in recent Hollywood history. If the judge denies the motion, the book may finally close on the It Ends With Us saga.