Blake Lively and Justin Baldoni's Legal Battle Far From Over Despite Settlement

Blake Lively and Justin Baldoni may have settled their long-running legal dispute, but the case is far from finished. What looked like a clean resolution has instead entered a new phase that could stretch on for months.

At the center of the ongoing conflict is money, but not in the way most people expect. Lively is now seeking to have Baldoni and his production company cover her legal fees and pay additional damages, arguing that his now-dismissed defamation lawsuit was retaliatory.

“People often hear the word ‘settlement’ and assume the legal fight is completely finished, but in high-profile civil litigation that is not always the case,” said Tarlika Nunez-Navarro, a former Circuit Court Judge and current Dean and Professor of Law at St. Thomas University School of Law.

In this case, the core claims — stemming from Lively’s allegations of misconduct during the filming of It Ends With Us and a subsequent retaliatory smear campaign — have been resolved. But key issues were left open, including attorney fees and potential penalties tied to how the case was litigated.

Settlement agreements can intentionally carve out unresolved matters. “That can create an entirely separate phase of litigation focused less on liability and more on financial consequences,” Nunez-Navarro explained.

According to court filings, Lively’s legal team argues she qualifies as the “prevailing defendant” against Baldoni’s countersuit and is entitled to attorneys’ fees, potentially multiplied damages, and punitive penalties under a 2023 California law designed to protect individuals from retaliatory defamation claims.

Baldoni’s camp strongly disputes that interpretation. His attorney has called the remaining issue “a very narrow” dispute over fees, while maintaining that Lively settled because she would have lost at trial. Legal experts say this kind of standoff is common.

“With the lawsuit settled, the remaining issue involves the amount of attorneys’ fees for Lively’s attorneys, who likely worked on a contingency fee basis,” said Danny Karon, a civil litigation attorney and lecturer at the University of Michigan Law School and The Ohio State University Moritz College of Law. “Considering the judge dismissed Baldoni from the case, Baldoni believes Lively’s attorneys are entitled to considerably less than they’re demanding.”

Both sides have already claimed victory publicly, with Lively’s team calling the settlement a “resounding victory” and Baldoni’s attorney labeling it a “total victory.”

That kind of dueling narrative is typical in celebrity disputes — and potentially risky.

“In celebrity disputes especially, parties have to be careful because statements made after settlement can potentially trigger new claims involving defamation, breach of confidentiality provisions, interference issues, or allegations that someone is mischaracterizing the outcome of the case,” Nunez-Navarro noted. “The legal case may narrow, but the reputational battle often continues publicly.”