Lawyers for Lively and Baldoni battle in a New York court despite settling claims weeks ago

At a hearing without the actors, Garofalo told Liman it was wrong for Lively to seek damages and attorneys fees after agreeing to a settlement in which she dismissed her claims without Baldoni and his production company “paying a cent of the $300 million in damages she was demanding.”

“Reopening this for basically what is an alternative trial would involve reopening discovery, new experts, new expert depositions,” she said. Garofalo called it “effectively an end run around the jury trial.”

A California law permits “significant” penalties to be levied against any party who filed unsuccessful retaliatory defamation actions against sexual harassment and retaliation litigants. Baldoni's countersuit alleging defamation and extortion was tossed out last year by the judge.

Liman did not immediately rule after hearing more than an hour of arguments.

Attorney Michael Gottlieb, representing Lively, asserts that the lawsuit Baldoni brought against Lively was the very kind of litigation the California law was designed to stop, enabling survivors of sexual harassment to be protected from a protracted and damaging legal fight.

In early May, Lively and Baldoni agreed to settle a lawsuit that had left both sides publicly making claims against one another since the litigation began in December 2024 when Lively, 38, sued Baldoni, 42, and his production company, Wayfarer Studios.

Weeks after Lively filed suit, Baldoni sued Lively, accusing her, her husband — “Deadpool” actor Ryan Reynolds — and their publicist of defamation and extortion.

Baldoni, who directed the dark romantic drama and starred in it with Lively, denied harassing her or orchestrating a smear campaign. He claimed the complaints about his behavior were made up by Lively as part of an effort to seize creative control of the movie.

The settlement was reached days after Liman dismissed Lively’s sexual harassment claims, ruling that she couldn’t pursue them under federal law because she was an independent contractor rather than an employee on the movie set.

Lively had claimed that during filming, Baldoni made inappropriate comments about her appearance, violated physical boundaries while filming a love scene, and pushed for nudity — against Lively’s wishes — during a scene in which her character was giving birth.

Baldoni denied doing anything outside of what occurs during the normal creative process to make a movie.

In their joint statement after the deal was reached, the parties said they recognize that Lively’s concerns “deserved to be heard” and that they ”remain firmly committed to workplaces free of improprieties and unproductive environments.”

“It Ends With Us,” an adaptation of Colleen Hoover’s bestselling 2016 novel about a relationship devolving into domestic violence, was released in August 2024 and exceeded box office expectations despite criticism that it glorified abuse.

Lively appeared in the 2005 film “The Sisterhood of the Traveling Pants” and the TV series “Gossip Girl” from 2007 to 2012 before starring in films including “The Town” and “The Shallows.”

Baldoni starred in the TV comedy “Jane the Virgin,” directed the 2019 film “Five Feet Apart” and wrote “Man Enough,” a book challenging traditional notions of masculinity.