Blake Lively’s Reported Setback in the Justin Baldoni Lawsuit — What It Means

Blake Lively just lost another round against digital strategist Jed Wallace — not on the facts, but on where she tried to sue him. The judge basically said: wrong state.

What the judge actually decided

U.S. District Judge Lewis Liman tossed Lively's claims against Wallace, who lives and works in Austin, Texas, because her team couldn't show he had enough ties to New York to be sued there. This is the second time Liman has batted the Wallace piece of the case away on jurisdiction. He first dismissed in July but gave Lively a chance to refile with more detail. She did. It still wasn't enough.

The sticking point is New York's 'long-arm' statute — the rule that lets New Yorkers sue out-of-staters. There’s a carve-out that makes defamation claims against non-New Yorkers especially hard, in the name of protecting speech. That undercut Lively's arguments here.

Important: the judge did not rule on whether Lively's allegations are true or false. He said New York is the wrong place to litigate them. He explicitly said she can pursue Wallace in Texas instead.

Why Lively is going after Wallace

In earlier filings (and a lot of online chatter), Lively accused Wallace of being brought in by Justin Baldoni's camp to mount a coordinated online hit — think mobilizing Reddit and other platforms to damage her reputation. Wallace has denied wrongdoing and, for what it's worth, he has his own defamation lawsuit going against Lively.

What Wallace's side is saying

Wallace's attorney, Chip Babcock, praised the court's work and pointed out that Judge Liman issued two detailed opinions totaling 79 pages dismissing Wallace and his company, Street Relations, from the New York case. He also noted the judge never had to reach the merits of Lively's claims, and added they hope any refiling in the correct court would be a non-starter.

What Lively's team is saying

Lively's camp is treating this like a venue detour, not a loss on substance. A spokesperson said the decision is only about where Wallace can be sued; they say the judge made clear the claims can and should be brought elsewhere, and they're weighing options. They also stressed this does not touch her broader New York case against Justin Baldoni, Michael D. Heath, Dan Sarowitz, Steve Nathan, Andrew Abel, Wayfarer Studios, and The Agency Group — that trial is slated for March in New York.

How Baldoni's side is framing it

Justin Baldoni's attorney, Bryan Freedman, welcomed the Wallace ruling and said Lively's allegations against Wallace have never been supported. He added that the other defendants are ready and eager to challenge Lively's claims in court.

About that $400 million Baldoni countersuit you heard was 'thrown out'

This part has caused a lot of confusion. Baldoni filed a $400 million countersuit, which Judge Liman dismissed in June with the understanding Baldoni could amend and try again. The court later warned on October 17 that it would enter final judgment if nothing new landed. On October 31, after Baldoni's side did not file a further amended complaint, Liman formally ended the countersuit.

Plenty of folks treated that as Lively beating the countersuit on missed deadlines. Baldoni’s attorney says that’s not what happened:

'No deadlines were missed. Our clients chose not to amend their complaint to preserve appeal rights.'

Freedman called the coverage a distortion of a simple procedural step and says they still plan to chase what they call the truth, in court and on appeal if needed.

One more procedural nugget: court records show Lively was the only party to respond to the judge's October 17 warning. She asked the court to enter final judgment and to keep her request for legal fees alive. The judge agreed.

Where things stand right now

• Lively vs. Wallace in New York: dismissed for lack of personal jurisdiction. The judge says Lively can refile in Texas, where Wallace and his firm Street Relations are based. Wallace also has a separate defamation case pending against Lively.
• Lively vs. Baldoni and others (Heath, Sarowitz, Nathan, Abel, Wayfarer, The Agency Group): still headed for a March trial in New York, per Lively's team.
• Baldoni's $400 million countersuit: officially closed on October 31 after no further amended complaint was filed. Baldoni's attorney says that choice was strategic to preserve appeal rights, not a blown deadline.
• Procedural side note: after an October 17 warning about final judgment, Lively asked the judge to wrap the countersuit and keep her legal-fee request active. Judge Liman did so.

Bottom line: this is turning into a very technical, very strategic legal chess match. The New York court didn't bless anyone's story — it just said who has to fight where. The real test of the allegations is still ahead.