Inside Blake Lively's Decision to Settle Justin Baldoni Legal War: Star Kicks Off Bid to Rebuild 'Ruined' Career by Making Shock Appearance at Met Gala

Blake Lively's Hollywood career has been "ruined" by her long-standing legal war with her It Ends with Us co-star Justin Baldoni, according to insiders.

RadarOnline.com can reveal high-end sources claim the Gossip Girl actress, 38, will struggle to rebuild her reputation following the fall out with Baldoni, 42, which finally came to an end on Monday when the pair settled before the case went to trial.

Hours later, Lively kickstarted her bid to win over major power players in the industry by making a surprise appearance at the Met Gala, accessorising her gown with a custom-made purse decorated by her kids 'artwork, perhaps in a bid to exhibit her softer side.

But according to a Disney Studios exec, Lively will struggle to resurrect her standing in Hollywood, no matter what tactics she deploys.

The source told The Daily Mail: "The lawsuit has ruined her in Hollywood... the truth is she was never that popular.

“She had a reputation for being difficult, one of those toxic people who always thinks she knows best.”

The insider added: "The general view now is that she's made her bed and she can lie in it. I don't think people in Hollywood are shedding tears over her."

Both Lively and Baldoni had been battling it out after the actress filed a sexual harassment lawsuit against the actor and also sued his publicists for allegedly orchestrating a subsequent smear campaign against her following their work together on the film, It Ends With Us.

On Monday, May 4, Lively's counsel Michael Gottlieb and Esra Hudson, and Wayfarer lawyers Bryan Freedman and Ellyn Garofalo, issued a joint statement confirming the settlement.

It read: "The end product – the movie It Ends with Us – is a source of pride to all of us who worked to bring it to life. Raising awareness, and making a meaningful impact in the lives of domestic violence survivors – and all survivors – is a goal that we stand behind."

"We acknowledge the process presented challenges and recognize concerns raised by Ms. Lively deserved to be heard," the statement continued. "We remain firmly committed to workplaces free of improprieties and unproductive environments. It is our sincere hope that this brings closure and allows all involved to move forward constructively and in peace, including a respectful environment online."

The terms of the agreement have yet to be revealed.

Following Lively's original filing in December 2024, Baldoni, who co-starred with the movie star and directed It Ends With Us, would respond with his own $400million countersuit against her and her husband, Ryan Reynolds.

However, things didn't go well for Baldoni off the bat, as in June 2025, his lawsuit was tossed out by a judge. Baldoni's $250million defamation lawsuit against the New York Times was also dismissed.

But things shifted in Baldoni's favor just one month ago, after U.S. District Judge Lewis Liman booted 10 of Lively's 13 claims, including her allegations of harassment, defamation, and conspiracy, leaving only the lesser claims of retaliation, aiding and abetting in retaliation, and breach of contract.

At the time, Judge Liman declared the jury would still get to hear the Gossip Girl alum's retaliation claims that Baldoni, 42, allegedly hired a team of publicists to plant negative stories about her.

The judge had made clear Lively was an independent contractor and not an employee; she could not bring sexual harassment claims under Title VII of the Civil Rights Act of 1964, which prohibits workplace discrimination, including based on gender.

A settlement didn't appear to be on the horizon following a court-ordered mediation on February 11, as both parties left the meeting with no progress toward a resolution.

The feud, which featured plenty of low blows, had Lively making bombshell allegations in her complaint, including that Baldoni "appeared focused on Ms. Lively’s sexual appeal above all else."

The actress had also claimed Baldoni threw a tantrum in her dressing room and "made the rest of the (It Ends With Us) cast, and crew wait for hours while he cried in Ms. Lively’s dressing room, claiming social media commentators were saying that Ms. Lively looked old and unattractive based on paparazzi photos from the set."

The nasty fight even had some turning against Lively, with bullying allegations against her and her husband, Reynolds. According to sources, the pair had even "discussed moving to the U.K."

An insider claimed Lively "believes there are top of the line filmmakers who could give her a second chance, as most people in the industry" are "steer(ing) clear" of her. Even Piers Morgan had claimed Lively was "destroying her brand with this ridiculous case..."