After a dramatic 18-month legal battle, Blake Lively and Justin Baldoni reached a last-minute settlement last month – one in which Lively, remarkably, got nothing. But the agreement did allow her to continue to pursue attorneys’ fees and damages related to another part of their dispute.
A federal judge awarded her a partial victory on Friday, granting her attorneys fees but denying her request for additional damages to the tune of millions of dollars.
On Friday’s show, Megyn was joined by defense attorneys Mark Geragos, host of In The Well, and Arthur Aidala, host of Arthur Aidala Power Hour, to discuss the judge’s decision and whether this will finally bring an end to the legal saga.
The Court Battle
The court battle between the It Ends With Us co-stars that began in December 2024 when Lively alleged Baldoni, who directed and starred in the project, sexually harassed her and later orchestrated a retaliatory smear campaign to destroy her reputation. Baldoni denied the allegations and countered with a $400 million defamation claim against Lively that was dismissed a year ago.
After failed attempts at mediation and a very messy discovery process that aired a lot of dirty laundry, what remained to be settled was a very slimmed down version of the Gossip Girl star’s complaint. U.S. District Judge Lewis J. Liman dismissed 10 of Lively’s 13 claims – including sexual harassment, defamation, and conspiracy – in April, meaning only her accusations of breach of contract and retaliation would move forward to trial.
Just two weeks before the trial was set to begin in Manhattan federal court, Lively and Baldoni settled. And while reports indicate she and Baldoni each earned no money in the settlement, the actress argued she was entitled to recoup her legal fees and, potentially, damages related to Baldoni’s countersuit.
That caveat is thanks to a California law called the Speak Your Truth Act, which was signed by Gov. Gavin Newsom back in 2023 and makes certain communications about sexual harassment privileged. That is why Baldoni’s defamation claim was dismissed, but it is not all the law does.
It also allows individuals sued over privileged sexual harassment communications to be paid attorneys fees and other damages, per California Civil Code section 47.1(b). Lively’s team argued any fees and damages should be trebled (read: tripled) under the California statute. Additionally, she was seeking a separate award of punitive damages.
Baldoni’s attorneys accused Lively of trying to do “an end run” around a trial that was canceled when the two agreed to settle, while Lively’s lawyers claimed the lawsuit Baldoni brought against his client was exactly the kind of case the California law was designed to prevent.
The Judge’s Decision
The woman behind the law, Victoria Burke, told Megyn earlier this month that she was not comfortable with the statute being used in the case and did not envision it being used to award people like Lively. The judge, meanwhile, ruled somewhere in between.
In a 47-page order, Judge Liman found that Lively’s case did fulfill the criteria of the law, which requires that the accuser made sexual misconduct complaints “without malice.” He also determined she could only ask for fees, not damages.
“This judge kind of split the baby from the look of it, saying, under the explicit terms of 47.1, I guess I have to give her her attorney’s fees, but I’m not doing any of that other nonsense,” Megyn explained. “It is a loss for Team Baldoni, which made the argument that this law couldn’t even be enforced and that it’s probably unconstitutional. They wanted him to not give her anything. They didn’t quite get that, but it is much better to just get her fees awarded to her than to get her fees, and punies, and times three.”
What Comes Next
As part of their settlement agreement, both sides agreed not to appeal Judge Liman’s ruling. But, as Geragos explained, that does not mean the case is closed.
“The strict language of the statute would seem to suggest that you have to award fees, but there is still yet another battle, even though the order says case closed,” he noted. “They’re going to submit their fees requesters and costs, and then the judge is going to whittle it down. And then [Baldoni’s] team is going to file something that says, ‘No, this was not what was intended,’ and they’re going to go back and forth.”
Whatever the number ends up being, Geragos added, will not be for Baldoni to worry about. “It is not going to come out of Justin Baldoni’s pocket. This is all going to be a fight between the insurance companies over who is going to pay this,” he said. “So, it is really much ado about nothing and confirms what you said, Megyn, that that settlement was a massive loss for Blake Lively.”
Because while Lively may recoup some of her fees, it will only be the ones related to the defamation case Baldoni filed. “She paid out of pocket to her attorneys for the entire case. She is not going to get all of her attorney’s fees back, she is only going to get a siloed… amount that are cabined to and tethered to the defense of that countersuit, not the entire case,” Geragos explained.
“So, it’s not like she is getting some windfall. She is getting… some small percentage of what she spent on this case,” he continued. “She got no damages, and… the woman who actually authored the laws running as fast away from her as she possibly can.”
You can check out Megyn’s full interview with Aidala and Geragos by tuning in to episode 1,338 on YouTube, Apple Podcasts, or wherever you like to listen. And don’t forget that you can catch The Megyn Kelly Show live on SiriusXM’s The Megyn Kelly Channel (channel 111) weekdays from 12pm to 2pm ET.