A New York judge has dismissed a $400 million defamation lawsuit filed by actor Justin Baldoni against his former co-star Blake Lively, marking a significant development in their ongoing legal dispute.

The two actors starred in the 2024 film 'It Ends With Us,' leading to a series of legal actions that have persisted for several months, with a trial now set for next year.

Judge Lewis Liman issued the ruling on Monday, dismissing Baldoni's countersuit, which included serious allegations of extortion and defamation.

The lawsuit was initiated by Baldoni following accusations made by Lively, who had filed her legal complaint in December 2024 against Baldoni and his production company, Wayfarer Studios.

Lively's complaint alleged sexual harassment on the set of 'It Ends With Us' and claimed that Baldoni retaliated against her for bringing the concerns to light.

In her suit, Lively detailed her allegations, which she had previously outlined in an article published in the New York Times before initiating formal legal proceedings.

Following her claims, Baldoni responded with his own litigation, asserting that Lively, her husband Ryan Reynolds, and their publicist aimed to damage his career and reputation through unfounded allegations.

Baldoni's countersuit was grounded in two primary claims: asserting that Lively had effectively 'stole the film' from him by threatening not to promote it, and alleging that she and others fabricated a narrative that he had sexually assaulted her, launching a smear campaign in the process.

However, Judge Liman clarified in his decision that Baldoni and his production company had failed to substantiate that Lively's actions constituted wrongful extortion, describing them instead as permissible negotiation tactics.

Moreover, the ruling underscored that Baldoni’s claims of defamation were not supported sufficiently, as he had not demonstrated that Lively was responsible for any damaging statements beyond those included in her own lawsuit, which were deemed privileged.

In addressing Baldoni’s allegations against the New York Times regarding defamation, Judge Liman noted that the evidence did not indicate that the publication acted with actual malice in reporting the story, leading to the dismissal of Baldoni's $250 million lawsuit against the newspaper as well.

The judge remarked that it appeared the Times acted under a belief it was accurately recounting the situation based on the evidence at hand without any apparent bias toward Lively.

Lively's legal representatives characterized the court's ruling as a significant victory for their client and others mentioned in Baldoni’s lawsuit, emphasizing that the original $400 million claim was unfounded.

They expressed satisfaction that the court recognized the allegations as attempts at retaliation against Lively, Ryan Reynolds, and the journalist involved.

In addition to the dismissal, Judge Liman indicated that Baldoni would be permitted to amend and refile specific allegations regarding interference with contracts by June 23.

This development follows Lively's recent request to withdraw two claims from her lawsuit against Baldoni concerning intentional and negligent infliction of emotional distress, which she initially argued were a response to the alleged harassment and subsequent smear campaign.

'It Ends With Us,' the film at the center of this controversy, is an adaptation of a bestselling novel by Colleen Hoover, portraying the life of a young woman, played by Lively, navigating the complexities of a relationship influenced by her past experiences of domestic abuse.