The heated legal battle between actors Blake Lively and Justin Baldoni, along with his production company Wayfarer Studios, has been settled just two weeks before the case was scheduled to go to trial in federal court .
The settlement, reached on May 4, cancels a trial that was set to begin on May 18 in the U.S. District Court for the Southern District of New York. The trial would have centered on Lively’s claims of retaliation and a related defamation countersuit from Baldoni .
The Terms of the Agreement
While the joint announcement spoke of bringing “closure” to the dispute, court filings and statements from attorneys on both sides quickly revealed that the legal sparring was not entirely over .
According to court documents, the settlement involved no financial payout between the parties. Justin Baldoni and Wayfarer Studios did not pay Lively any of the $300 million in damages she had demanded, and Lively dismissed her three remaining claims .
However, a key part of the settlement was an exception: Lively preserved her right to seek attorney’s fees and other damages under a novel California law designed to protect survivors of sexual misconduct from retaliatory lawsuits .
Statements From Both Camps
Following the agreement, both sides immediately claimed victory.
Lively’s attorneys, Michael Gottlieb and Esra Hudson, framed the settlement as a “resounding victory” and validated her decision to come forward. “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,” her team said in a statement .
Conversely, Baldoni’s attorney, Bryan Freedman, called it a “total victory” for his clients. “Let’s be clear, this is a win and total victory for the Wayfarer parties. There was no sexual harassment. There was no retaliation. There was no smear campaign,” he said. Freedman emphasized that Lively had 10 of her 13 claims dismissed by the court .
Averted Legal Showdown: Taylor Swift’s Role
The settlement averted a trial that promised to unearth a trove of embarrassing communications. The case had drawn significant public interest due to legal filings mentioning some of Hollywood’s biggest names, including Taylor Swift.
Baldoni’s legal team had attempted to subpoena Swift, claiming that Lively “weaponized” her friendship with the pop superstar to pressure him during production. Documents included text messages between Swift and Lively discussing the film. Swift was never deposed, and with the settlement, her messages will not become public court evidence .
The Final Chapter: Attorney Fees Ruling
Following the settlement, the only remaining issue was Lively’s bid to recover attorney fees under the California law.
On June 12, 2026, Judge Lewis Liman issued a final ruling. He granted Lively’s request for attorneys’ fees, finding that she was the “prevailing defendant” under the statute .
However, the judge rejected her request for more significant punitive and treble damages, ruling that she could not use the fee motion to create an “end run” around the federal trial process . This meant Lively would only recoup legal costs, not the massive financial penalty she had sought .
