A high-profile legal dispute between actress Blake Lively and actor-director Justin Baldoni has entered a new phase in Manhattan federal court, with Lively pursuing financial remedies under a California statute designed to protect individuals who report workplace misconduct.
The case stems from allegations of sexual harassment that Lively made against Baldoni during the production of their 2024 romantic drama film. Following a private settlement reached in May 2026 that resolved Lively’s employment lawsuit, her legal team is now seeking attorneys’ fees, costs, and both compensatory and punitive damages under California Civil Code Section 47.1.
This California legislation, enacted in response to the #MeToo movement, provides protection for individuals who make sexual misconduct allegations by imposing financial penalties on parties who file unsuccessful retaliatory defamation lawsuits. The statute automatically triples any compensatory damages awarded.
Baldoni had filed a $400 million defamation counterclaim against Lively and her husband, actor Ryan Reynolds, in response to her initial lawsuit. He alleged that the couple had conspired to damage his reputation and interfere with the film’s premiere. However, U.S. District Judge Lewis Liman dismissed this counterclaim entirely last summer.
During Monday’s hearing, Lively’s attorney Michael Gottlieb argued that his client qualifies as the prevailing defendant under the California statute, entitling her to various forms of compensation. He explained that the provision operates similarly to anti-SLAPP laws in other states, designed to discourage retaliatory litigation against those who speak out about workplace misconduct.
Baldoni’s legal team, represented by attorney Ellyn Garofalo, contested Lively’s right to punitive damages, characterizing the motion as an attempt to circumvent the jury trial that was eliminated through their settlement agreement.
When Judge Liman questioned the specifics of how Lively was damaged and what proof existed, Gottlieb indicated that those determinations would be made later in the proceedings.
The original lawsuit included allegations that Baldoni had engaged in inappropriate behavior on set, including improvising kisses, making comments about Lively’s appearance, and sharing personal information she had disclosed to him in confidence. Lively also claimed that after she went public with her allegations in a 2024 media interview, Baldoni’s team launched a publicity campaign to discredit her.
Baldoni has consistently denied all allegations of misconduct, maintaining that Lively’s claims were motivated by a desire to control the film’s narrative and damage his professional standing.
The settlement reached in May 2026 resolved most of the claims in Lively’s lawsuit, including retaliation and breach of contract allegations. While the specific terms remain confidential, reports indicate that Lively did not receive monetary compensation under that agreement. As part of the settlement terms, Lively relinquished her right to appeal.
The film at the center of the controversy, based on a 2016 novel about a woman navigating an abusive relationship, was released in August 2024 and achieved significant commercial success, earning more than $350 million in worldwide box office receipts.
Neither Lively nor Baldoni attended Monday’s court hearing. Judge Liman has reserved his decision on the motion for post-judgment fees and costs, leaving the next steps in this ongoing legal matter uncertain.
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