A federal judge on Thursday dismissed 10 of the 13 claims in actress Blake Lively's lawsuit against director and co-star Justin Baldoni — gutting her sexual harassment allegations but leaving a retaliation case intact and on track for a civil trial beginning May 18 in New York. The ruling, a 152-page opinion by U.S. District Judge Lewis Liman, narrows one of Hollywood's most closely watched legal battles down to its core: whether Baldoni and his production company orchestrated a coordinated digital smear campaign against Lively after she complained about misconduct on the set of the 2024 film It Ends With Us.
What the Judge Threw Out
The dismissed claims include sexual harassment, conspiracy, and defamation — the most explosive accusations Lively had leveled since filing suit in December 2024. Judge Liman's reasoning was largely technical rather than a finding that no misconduct occurred. According to Reuters, Liman ruled that Lively was an independent contractor rather than an employee, disqualifying her from pursuing harassment claims under certain federal and California civil rights statutes. He also found that the alleged misconduct on set occurred in New Jersey, not California, undermining the jurisdictional basis for her state-law harassment claims.
On the defamation claims against Baldoni's attorney Bryan Freedman, Liman determined that the statements in question — made in the context of ongoing litigation — were legally protected. "To be sure, much of what Lively complains about is not actionable," Liman wrote, as reported by Reuters. "The Wayfarer Parties were entitled to engage public relations and crisis management specialists to protect their reputations."
Regarding the on-set conduct itself — including allegations that Baldoni deviated from the script to add unwanted physical contact during a dance sequence and a birth scene — Liman wrote that Baldoni's alleged conduct "appeared to be directed towards Lively's character in the scene, rather than Lively herself." He added, per Reuters: "Creative artists, no less than comedy room writers, must have some amount of space to experiment within the bounds of an agreed script without fear of being held liable for sexual harassment."
What Survives: The Retaliation Case
Three claims remain and will go before a jury: breach of contract, retaliation, and aiding and abetting in retaliation. These center on Lively's allegation that after she raised concerns about the set environment, Baldoni and Wayfarer Studios launched a coordinated campaign to damage her reputation — using crisis management specialists, friendly journalists, and social media manipulation to flood the internet with negative coverage of Lively.
Liman wrote that "certain conduct at least arguably crossed the line," and that jurors could consider whether the defendants "impermissibly and materially altered" Lively's career prospects, according to Reuters. That language signals that while harassment itself won't be before the jury, the alleged aftermath — the PR blitz — will be.
Lively's attorney Sigrid McCawley told CBS (the BBC's U.S. partner) that the case "has always been and will remain focused on the devastating retaliation and the extraordinary steps the defendants took to destroy Blake Lively's reputation because she stood up for safety on the set." McCawley told the Guardian that the harassment claims were dropped "not because the defendants did nothing wrong but because the court determined Blake Lively was an independent contractor, not an employee." McCawley also confirmed that Lively "looks forward to testifying," according to Reuters.
Baldoni's defense lawyers Alexandra Shapiro and Jonathan Bach said in a joint statement, per Reuters: "What's left is a significantly narrowed case, and we look forward to presenting our defense."
Background: How This Case Got Here
The dispute became public in December 2024 when Lively filed a complaint with the California Civil Rights Department — details of which were first reported by the New York Times — and subsequently filed her full civil lawsuit. The film, an adaptation of a Colleen Hoover novel about domestic violence, grossed more than $350 million globally according to The Guardian, making it a box office success quickly overshadowed by the legal fallout.
The litigation has been sprawling. Baldoni countersued Lively, her husband Ryan Reynolds, and their publicist, alleging a coordinated effort to destroy his career. He also sued the New York Times over its original reporting. Last year, Judge Liman dismissed Baldoni's $400 million defamation counterclaim against Lively, according to the BBC. More recently, in June 2025, Lively voluntarily withdrew two emotional distress claims.
The case has drawn in a notable cast of peripheral figures. Taylor Swift, Gigi Hadid, and Hugh Jackman were all identified by Lively's legal team as potential witnesses with information relevant to her claims, according to Reuters. Unsealed text messages between Lively and Swift — in which Lively referred to Baldoni as the "doofus director of my movie" — were reported by The Guardian.
A mediation attempt in March 2026 failed to produce a settlement, leaving the case on its current trajectory toward trial.
The Broader Stakes
The ruling has implications beyond this specific case. The judge's decision that an independent contractor cannot bring certain harassment claims under federal civil rights law highlights a long-standing gap in workplace protections — one that is especially relevant in entertainment, where the vast majority of talent works as independent contractors rather than employees.
It also underscores the legal complexity of allegations involving on-set creative decisions. The ruling essentially carved out space for directors to make artistic choices — even contested or uncomfortable ones — without those decisions automatically rising to the level of unlawful harassment.
What remains going to trial — the retaliation and coordinated smear campaign allegations — could prove more consequential for the entertainment industry's PR and crisis management ecosystem. If a jury finds that Wayfarer Studios deliberately weaponized press relationships and social media to punish an actress for raising workplace concerns, it would mark a rare legal accountability moment for practices that are widely understood to exist but rarely litigated.
Former entertainment lawyer and Puck reporter Matthew Belloni assessed the broader situation for The Guardian last year: "This doesn't help either of them. The longer this goes on and the more mud that's slung at each other, it really hurts both of them."
Both Lively and Baldoni have said they intend to see the case through to trial. The jury will begin hearing testimony in New York on May 18.