After an 18-month legal battle, Blake Lively and Justin Baldoni reached a last-minute settlement just two weeks before they were set to go to trial in Manhattan federal court last month.
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 last summer.
In September 2025, Lively filed a motion for attorneys fees, triple damages, and punitive damages under a 2023 California law meant to protect sexual abuse accusers from retaliatory defamation suits. The “Speak Your Truth Act” allows individuals sued over privileged sexual harassment communications to be paid attorneys fees and other damages, per California Civil Code section 47.1(b).
That motion was awaiting ruling when Lively and Baldoni settled what remained of her case against him in May, and she earned nothing for her claims in the settlement. As part of the agreement, both sides also said they would abide by U.S. District Judge Lewis J. Liman ruling on the fee motion and not appeal.
The Decision
Judge Liman gave Lively a partial victory on Friday, ruling she was entitled to recover her defense costs related to the countersuit that was only active for less than five months. Baldoni, on the other hand, got a major win when the judge denied Lively’s request for punitive damages that she wanted to be tripled.
In a statement following Judge Liman’s decision, Lively’s attorneys, Esra Hudson and Michael Gottlieb, seemed to suggest their client is still entitled to damages:
“Blake Lively won her motion under Civil Code Section 47.1. Today’s ruling makes it clear that Ms. Lively brought her claims in good faith, that there was no evidence she acted with malice, and that she is the prevailing defendant under Section 47.1. The Court is awarding Ms. Lively attorneys’ fees and costs and has explained that a prevailing defendant under Section 47.1 may seek damages using different procedural mechanisms. The parties’ settlement agreement expressly preserves Ms. Lively’s rights to obtain those damages. Ms. Lively is gratified that her lawsuit shows how Section 47.1 and laws like it create a path for survivors to hold accountable those who weaponize online attacks and retaliatory lawsuits to intimidate and silence survivors.”
The settlement allows Lively to continue to pursue those damages? The settlement agreement, along with Judge Liman’s order from Friday, cast serious doubt on that. And in a Megyn Kelly Show exclusive, we have obtained the full settlement agreement between Lively and Baldoni.
Read the Settlement
Baldoni’s Team Responds
On Monday’s show, Baldoni’s attorney, Bryan Freedman, who is also Megyn’s lawyer, joined her to discuss why he chose to release the settlement amid the latest confusion in the case.
“From day one, it’s been about the receipts. So I thought, what would be really important is to release the settlement agreement, which is not confidential, which is not subject to any kind of order which restricts the public from seeing it,” Freedman told Megyn. “I think that will provide some clarity for people to be able to take a look at the settlement agreement and see exactly what it says, which is that Judge Liman will have the right to rule and only the right to rule on this particular motion.”
He called out a few key sections of the settlement agreement as it relates to Judge Liman’s order. As part of the settlement, the parties agreed all proceedings under 47.1 would be heard by Liman:
(b) The Parties agree that, notwithstanding anything herein to the contrary, Lively does not release, and retains all claims, rights, and remedies relating to her pending 47.1 Motion. The Parties agree that any and all proceedings related to the pending 47.1 Motion will be heard before Judge Lewis Liman. The Wayfarer Parties expressly reserve all claims, rights and remedies relating to Lively’s 47.1 Motion including, without limitation, the right to oppose any substantive or procedural motion, letter to the court, request for relief or argument asserted by Lively.
The agreement also waives all appeals or challenges to Judge Liman’s disposition of the motion:
(c) The Parties agree to irrevocably waive any and all appellate rights associated with the Wayfarer SDNY Complaint or the Lively SDNY Complaint, including any appeal of or challenge to disposition of the 47.1 Motion, whether by Judge Liman or otherwise.
In Judge Liman’s 47-page ruling, he determined that Lively cannot seek compensatory, punitive, or treble damages the way she attempted to. He wrote:
Because treble and punitive damages are neither “costs” nor “attorneys fees” under Rule 54(d), Lively cannot seek them pursuant to the procedures outlined in that provision.
The judge went on to write that her attempt to do so was to do an “end run” around an actual trial without giving the defendants a right to a jury trial as required under the 7th Amendment:
In effect, she seeks through Section 47.1 much of the same relief that she would have had to obtain through a jury verdict in her affirmative lawsuit. This fact only underscores the ways in which her current request seeks to bypass the full panoply of rights guaranteed a defendant under federal law…
By its own terms, and especially when viewed in the context of the Federal Rules as a whole, Rule 54(d) does not sweep so broadly. It does not create an end run around the entire set of carefully crafted federal procedural rules designed to protect the rights of the parties. It instead establishes a narrow exception to the usual litigation process for a specific and limited kind of relief. Compensatory and punitive damages do not fall within that exception.
Per the settlement agreement, Lively and her team “irrevocably and unconditionally fully and forever waive, release, and discharge the Wayfarer Parties [Baldoni]… from any and all demands, actions, judgments, rights, fees, damages, debts, obligations, liabilities, expenses (inclusive of attorneys’ fees), causes of action and claims for relief of whatever kind or nature, under any theory, whether legal, equitable or other, under the law.”
Freedman said that prevents Lively from using other avenues to obtain damages. “The parties wanted finality, and there is no form in which she can then take this, based on the settlement agreement, and say, ‘I want to redo any of these provisions like punitive damages, like treble damages, like compensatory damages,'” he explained. “The only issue left is for Judge Liman to rule on what’s the amount of the attorney’s fees under 47.1 pursuant to the limited cause of action of the defamation claim.”
As it relates to those fees, Freedman said the scope of what Lively can recoup is limited. “The attorneys fees are limited by the statute to, first of all, [those] that were spent on Blake Lively defending a cause of action, and that is the defamation cause of action,” he explained. “That’s one cause of action. It’s also one defendant, which was Blake Lively. You’re not talking about something that would be involving a number of defendants or a number of causes of action.”
“Also, we have to recall that that’s during a time period that what was filed was a motion to dismiss. There wasn’t any discovery… There were no depositions taken at that time, so there wasn’t a significant amount of work that was done at that period of time,” Freedman continued. “So, we believe that those should be a pretty reasonable, relatively nominal amount given what was actually happening during that period of time.”
The End of the Case?
After 18 months and over 1,400 entries on the docket, Megyn asked Freedman if he believes this high-profile case is, at last, wrapping up. “I think it’s finally over. I’m hoping it’s finally over with respect to allowing Blake to move on, allowing Justin and the other parties to move on,” he said. “There are still some collateral matters involved in this that have to be resolved, but the crux of the case and the crux of the issues, I think people are going to be able to move on.”
“Hopefully, people will wish the best for each other and come to that place that says… ‘Enough is enough, we can agree to disagree. I feel I’m right; you feel you’re right; and everyone, through transparency and authenticity, has been able to make their own decisions,'” Freedman added. “From the beginning, where we had nothing in our favor, we had no one in our favor so today, where I believe that the great, great majority of people see who Justin Baldoni is, it’s really changed significantly, and I’m really happy for him.”
You can check out Megyn’s full interview with Freedman by tuning in to episode 1,339 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.