It Ends With Us Settlement Postmortem: Blake Lively Made a Bold Wager on a Legal Theory and Lost

The aftermath of Blake Lively‘s 11th-hour deal to avert a headline-splashing trial years in the making over alleged sexual harassment on the set of It Ends With Us saw both sides jockeying for a legal and public relations edge.

Baldoni’s lawyers played up the absence of any monetary payout to Lively, who initiated the legal saga in 2024 when she accused the director and his production company Wayfarer of marshaling a plan to undermine her reputation in retaliation for speaking up about misconduct on the set of the movie.

On the other side, Lively’s lawyers celebrated an acknowledgement from Baldoni in the joint statement that the actress’ claims “deserved to be heard.” They also made a bold wager: Lively would soon see damages and the recovery of her legal costs by way of a California law intended to shield sexual harassment victims from retaliatory defamation claims. If not, the settlement would not involve any financial concession after years of legal wrangling and not-so-great headlines. Michael Gottlieb, Lively’s lead lawyer, called the preservation of the claim a “core issue” in an industry podcast after the deal was reached.

That gambit ended with a whimper on Friday when the court ordered Baldoni to pay Lively’s legal fees but rejected her bid for damages. The decision ends her last chance at a payout in the case.

Now, Baldoni’s lawyers are claiming victory.

“All Blake Lively needed to do was to say no, I’m not settling. Let’s go to the trial and the jury of our peers, and let’s see what we can get,” Bryan Freedman said on The Megyn Kelly Show, where he discussed the full agreement to settle the case, on Monday. “If it was so good, why do you settle a case exchanging no money? It doesn’t make any sense. It doesn’t pass the smell test.”

When the deal was announced last month, Freedman underplayed the significance of Lively’s remaining claim and called it “procedural.

“It’s pretty standard,” Freedman added in an interview with Entertainment Tonight. “But when you want to parade around and call a loss a victory, this is your attempt to do so.”

On Friday, Lively’s spokesperson turned to the same language over what it characterized as a “procedural” decision.

The dispute swung on a novel application of a state law barely tested in California in federal court. That law, the court said, “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,” wrote U.S. District Judge Lewis Liman in the ruling. “Compensatory and punitive damages do not fall within that exception.”

By the thinking of Gottlieb, Lively surrendered her chances at prevailing on her three remaining legal claims, which didn’t include the core sexual harassment allegation after it was dismissed earlier in the case, to focus entirely on her assertion under the California law adopted to prevent the weaponization of defamation lawsuits. Lively’s legal team lost that bet, or at least didn’t win it outright (she got legal fees).

“He didn’t get the result that they hoped to get in this case,” Freedman said of Gottlieb, estimating the litigation cost Lively roughly $30 million to $60 million. “When you bring a case and you hope to prevail on that case, if you have the evidence to show that you’re right, you go to trial, and so it was really easy for us to end up in a trial.”

If you ask either side, they’d likely say the case was never primarily about money. For Lively, it was about accountability and exposing a smear machine that threatened her reputation. For Baldoni, it was about vindication.

While there’ll never be a definitive answer of who came out on top in the court of public opinion, it appears sentiment against Lively shifted as the litigation escalated.

“The reaction to Ms. Lively bringing this lawsuit was positive,” Gottlieb said on The Town podcast last month. “That began to shift after the Wayfarer parties filed a defamation lawsuit and went on a press tour branding her a liar. That’s why we focused on holding them accountable for bringing a frivolous lawsuit.”

The last remaining issue before the court is how much Baldoni should pay in legal fees. Still, nothing is stopping Lively from pursuing another lawsuit for damages over his allegedly retaliatory defamation claim, though Freedman is of the belief that it’s now “time to move on.”