Hollywood legal battles usually end with a quiet settlement and a heavily vetted joint statement. But the two-year war over the movie It Ends With Us just bucked the trend.
U.S. District Judge Lewis J. Liman issued a final ruling that orders Justin Baldoni and his production company, Wayfarer Studios, to cover Blake Lively's legal fees. Almost immediately, both sides started spinning the decision as a massive victory. Lively’s team called it a vindication of her good faith. Baldoni’s lawyer declared it a total failure for the actress.
Don't buy the spin from either camp. This ruling isn't a sweeping moral victory for anyone. It's a highly technical legal compromise that leaves both stars bruised, out of pocket, and eager to close the book on a PR disaster.
What the Judge Actually Decided
The headlines look simple. Judge Liman ruled that Lively can claw back defense costs from Baldoni. But the mechanics matter here. The decision hinges on California Civil Code Section 47.1, a 2023 statute known as the Protecting Survivors From Weaponized Defamation Lawsuits Act.
This law protects people who speak out about sexual harassment or discrimination. If an accuser gets hit with a retaliatory defamation lawsuit and succeeds in getting that countersuit thrown out, the law dictates that the person who filed the defamation claim must pay the other side's legal bills.
Because Baldoni filed a massive countersuit against Lively back in December 2024—which the court dismissed in June 2025—the judge found that Lively qualifies as a prevailing defendant under that specific narrow rule.
But Lively didn't get everything she wanted. Far from it. Her legal team aggressively pursued triple damages and heavy punitive damages under the same California statute. Judge Liman shut that down completely. He stated that those financial penalties don't fit within federal procedural rules designed to protect both parties.
The Reality Behind the Spin
To understand why both sides are claiming victory, you have to look at what they originally demanded versus what they actually walked away with.
Lively originally sought over $300 million in fees and damages. She alleged that Baldoni created a hostile, sexually charged work environment on set and orchestrated a coordinated online smear campaign to ruin her reputation. But by April 2026, the court had gutted 10 of her 13 legal claims. Critically, the judge tossed her core sexual harassment claims because Lively worked as an independent contractor on the film, not a standard employee.
When the two stars quietly settled the bulk of the lawsuit in May 2026 right before a scheduled trial, Lively walked away with zero dollars in direct settlement money. Her only remaining leverage was this specific motion for legal fees.
Baldoni’s attorney, Bryan Freedman, pointed out this reality. He noted that Lively was only awarded limited attorney fees for a single claim in a slice of litigation that lasted only a few months. From his perspective, the fact that the court threw out the harassment and retaliation claims means his client stands cleared.
Lively’s lawyers, Michael Gottlieb and Esra Hudson, view it differently. They argue the ruling proves Lively didn't act with malice. Under the law, Baldoni would have escaped paying fees if he proved Lively sued him out of pure spite. He couldn't clear that bar.
How the Chaos Started on the Set of It Ends With Us
The courtroom drama is just the final act of a production that collapsed under the weight of creative friction and personal animosity back in 2024. Baldoni directed the adaptation of the bestselling Colleen Hoover novel and starred alongside Lively.
During the post-production phase and the subsequent press tour, rumors of a massive rift flooded the internet. The cast refused to do joint interviews. Lively reportedly commissioned her own edit of the movie, utilizing her husband Ryan Reynolds to rewrite scenes, which deeply fractured the creative hierarchy.
By December 2024, the dispute transformed into a multi-million-dollar legal web. Baldoni filed a $400 million lawsuit against Lively, Reynolds, and their publicist, alleging extortion and defamation. He even sued the New York Times over its coverage of Lively’s initial civil rights complaint. The court system consolidated those suits in early 2025 and systematically dismantled them over the next 18 months.
The Real Next Steps for Both Sides
The legal battle is technically over. Both parties signed a settlement agreement that waives their right to appeal this final ruling. But two practical steps remain before the public chapter completely closes.
- Auditing the Bills: Lively's legal team must submit a meticulous, line-by-line accounting of every hour spent defending against Baldoni's failed countersuit. The judge will review these records to set the final dollar amount Baldoni has to pay. Expect Baldoni’s team to fight to trim that number down to the absolute bare minimum.
- Rebuilding the Brands: Both stars face a long road to repair the professional fallout. Baldoni spent a year defending his reputation against severe misconduct allegations. Lively faced intense internet backlash during the film's release for her handling of the movie’s sensitive domestic violence themes.
Ultimately, this ruling shows the limits of using the court system to settle Hollywood power struggles. It Ends With Us made money at the box office, but the cost to the people who made it was astronomical.
