Lively v. Wayfarer Studios LLC

In case arising from ongoing dispute between movie stars Justin Baldoni and Blake Lively, district court dismisses all of Baldoni’s claims for failure to state claim, but grants Baldoni leave to amend as to his implied covenant and tortious interference claims.

In late December 2024, actress Blake Lively filed a complaint with the California Civil Rights Department (CRD) alleging that Justin Baldoni, her co-star and director in the film It Ends With Us, together with other individuals associated with his production company, Wayfarer Studios LLC, engaged in sexually inappropriate behavior during the making of the film and then directed a multimedia smear campaign against Lively and her husband, Ryan Reynolds, following the film’s completion. 

The same day that Lively filed the CRD complaint, The New York Times reached out to Baldoni and the Wayfarer parties for comment on a forthcoming article it intended to publish regarding Lively’s allegations and set noon the next day as the deadline by which they needed to respond. The Wayfarer parties’ legal representatives provided a lengthy written response to The New York Times during the middle of the night. A little after 10 a.m. the next day, The Times published its promised article, “‘We Can Bury Anyone’: Inside a Hollywood Smear Machine.” The article—drawing heavily on Lively’s allegations in the CRD complaint and incorporating additional information from text messages and emails that Lively had obtained pursuant to a subpoena—largely repeated Lively’s claims that the Wayfarer parties engaged in inappropriate behavior during the making of the film and then engineered a smear campaign against her. The article was accompanied by a video featuring Times reporter Megan Twohey, in which Twohey largely repeated the article’s narrative. Shortly after Lively filed the CRD complaint and the article was published, Lively filed suit against the Wayfarer parties in federal district court in Manhattan, asserting claims for sexual harassment, retaliation, breach of contract, and intentional and negligent infliction of emotional distress. 

The Wayfarer parties countersued, initially against Lively, Reynolds and Lively’s publicist, Leslie Sloane, and her company, Vision PR Inc., and then also against The Times. As to Lively parties, the Wayfarer parties alleged that they, either individually or together with one another, used threats and other extortionate tactics to steal control of the film from the Wayfarer parties, defamed them and pressured Baldoni’s talent agency to drop him as a client. And in line with those allegations, the Wayfarer parties asserted claims against the Lively parties for civil extortion, defamation, false light, breach of the implied covenant of good faith and fair dealing, and tortious interference with contractual relations or prospective economic advantage.

As for The Times, the Wayfarer parties alleged that the article and video falsely accused the Wayfarer parties of inappropriate workplace conduct and engineering a smear campaign against Lively, and that The Times must have known that its statements were false because it was in possession of text messages and emails that allegedly exculpated the Wayfarer parties. The Wayfarer parties also alleged that The Times breached a promise by publishing the article before the noon deadline it had set for receiving comment. Claims against The Times included defamation, false light, promissory fraud and breach of implied contract. 

The Lively parties and The Times all moved to dismiss all claims asserted against them for failure to state a claim. After reviewing the parties’ copious briefing, the court issued a 132-page opinion in which it carefully went through, and dismissed, each of the Wayfarer parties’ claims.

The court began its analysis with the civil extortion claim. Noting that under California law, a civil extortion claim requires a pleading that the defendant made a wrongful threat rising to the level of duress and that the plaintiff acquiesced to that threat and suffered actual monetary damages as a result, the court concluded that the allegations did not satisfy those elements. Working chronologically backward, the court first examined the allegations that the Lively parties threatened to attack the Wayfarer parties in the press if the latter did not publicly accept responsibility for issues encountered during the making of the film. That allegation could not amount to civil extortion because the Wayfarer parties did not, in fact, acquiesce to the demand. The court then looked at the allegation that the Lively parties issued a series of threats to the Wayfarer parties—threats such as Lively threatening to pull out of or not promote the film—in order to force the Wayfarer parties to surrender control of the film. That allegation also did not pass muster, both because the pleading did not adequately allege that Lively’s threats were wrongful, as opposed to simply being hard bargaining around the conditions of her employment, and because the pleading did not indicate that the Wayfarer parties suffered actual monetary loss as a result of acquiescing to Lively’s threats. Accordingly, the civil extortion claim had to be dismissed.

The court turned next to the defamation claims, first addressing the allegation that Lively defamed the Wayfarer parties in filing the CRD complaint and communicating its contents over to The Times. Applying California law, the court held that the Wayfarer parties could not maintain a defamation claim as to either act because all of Lively’s statements were protected by either the litigation privilege, which applies to communications made by litigants in judicial or quasi-judicial proceedings, or the fair report privilege, which applies to fair and true reports to the press of judicial proceedings. The Wayfarer parties attempted to argue that the fair report privilege did not apply because Lively allegedly provided The Times with the CRD complaint before it was filed, but the court explained that as long as a defendant intended in good faith to file a legal document, California law did not require that defendant “wait until a legal document is formally filed before providing it to members of the press.” The court also rejected the Wayfarer parties’ effort to defeat the privilege by pointing to communications that Lively allegedly provided to The Times but did not include in the CRD complaint, because the pleading did not allege that any of those communications were themselves defamatory. The court likewise found that the CRD complaint was entitled to the litigation privilege even if it painted Lively in a deceptively favorable light or took quotations out of context.

The court next addressed the Wayfarer parties’ claim that Reynolds and Sloane separately defamed them by publicly accusing Baldoni of being a “sexual predator” and committing “sexual assault.” As a public figure, Baldoni needed to allege that Reynolds or Sloane acted with “actual malice” when they made those statements—or, in other words, that Reynolds or Sloane knew or had reason to believe that those statements were false. But the pleading did not plausibly allege that either Reynolds or Sloane had any reason not to believe Lively’s account of her treatment during the making of the film. Accordingly, the Wayfarer parties could not allege that either Reynolds or Sloane made the statements about Baldoni with “actual malice,” and there could be no viable defamation claim as a result.

The court next disposed of the Wayfarer parties’ defamation claim against The Times, which was governed by New York law. The court noted that the Wayfarer parties alleged two types of defamatory statements by The Times: (1) allegations concerning alleged sexual misconduct during the making of the film, and (2) allegations concerning the alleged smear campaign against Lively. The court held that the first set of allegations clearly fell within the ambit of New York’s fair report privilege because the article made clear that it was simply reporting on Lively’s allegations in the CRD complaint. On the second set of allegations, the court found that those statements also did not amount to a viable defamation claim. On the one hand, the court did question whether the fair report privilege applied in light of the article’s and the video’s statements, based on the communications The Times reviewed and not on the CRD complaint, that the Wayfarer parties engaged in a smear campaign. On the other hand, the court found that the pleading did not plausibly allege that The Times acted with actual malice in writing the article or producing the video. Specifically, while the pleading alleged that The Times was aware of communications showing that some of the negative publicity aimed at Lively did not come from the Wayfarer parties, those communications did not rebut the other evidence that The Times had shown a targeted effort by the Wayfarer parties to alter the media narrative in regard to Lively. Indeed, the court found that “[g]iven the strength of the evidence in favor of a smear campaign, it is not plausible that the Times ‘entertained serious doubts as to the truth’ of the smear campaign narrative as a whole.”

The court also quickly dispensed with the false light claims. As to the claims brought against Lively, the court found that the false light claim rose and fell with the defamation claim, and since the defamation claim needed to be dismissed, so did the false light claim. As to the claim against The Times, that one was easily dismissed because the claims against The Times were governed by New York law, and New York does not recognize false light claims.

Having dealt with the defamation-related claims, the court turned to the claim against Lively for breach of the implied covenant of good faith and fair dealing. In short, the Wayfarer parties alleged that Lively breached the implied covenant of her film contract by making threats and improperly seizing control of the film. The court explained that an implied covenant claim requires plausible allegations that a contract existed, that said contract had specific terms and that the defendant did something to frustrate the performance of those terms. And unfortunately for the Wayfarer parties, their pleading did not adequately allege any of those elements. Indeed, while the pleading contained “vague references to contract negotiations or entitlements,” it also indicated that Lively never signed any contract, and furthermore did not allege the existence of any particular contractual provisions that Lively might have interfered with. Under the circumstances, the Wayfarer parties could not maintain an implied covenant claim.

The court found the tortious interference claims to be similarly deficient. Those claims focused on the allegation that Lively and Reynolds pressured WME, Baldoni’s talent agency, to drop him as a client. However, those allegations could not make out a tortious interference claim because, beyond identifying WME as being Baldoni’s agency, the pleading did not identify the existence of any contract between Baldoni and WME or any prospective economic relationship between them. Likewise, the pleading did not plausibly allege that WME was in any way influenced by Reynolds’ comments about Baldoni to the agency. The pleading similarly did not allege that Reynolds engaged in any wrongful conduct, since the comments he made to WME about Baldoni lacked actual malice and were thus not defamatory.

For its final bit of analysis, the court examined the claims for promissory fraud and breach of implied contract based on The Times’ publication of the article at 10:11 a.m. on Dec. 21, 2024, even though The Times had informed the Wayfarer parties that they needed comment by no later than noon that day. The court made clear that these facts could not give rise to any sort of claim. Not only did the pleading not allege the formation of any contract between the Wayfarer parties and The Times—no offer, acceptance or consideration—but there also could not be any fraud because the Wayfarer parties did, in fact, provide comment (which was included in the article), and they made no indication that they would have any further comments for The Times. Simply put, the pleading did not indicate that The Times made, or broke, any promise to the Wayfarer parties. Those claims, therefore, had to be dismissed.

Having disposed of every single one of the Wayfarer parties’ claims, the court resolved a few remaining issues. First, while the court found that it would be futile for the Wayfarer parties to amend most of their claims, it did grant them leave to amend the breach of implied covenant and tortious interference claims so that the they could provide additional allegations regarding the nature of the respective contracts at the center of those claims. Second, the court denied without prejudice to renew the Lively parties’ motion for attorney’s fees and costs pursuant to New York’s anti-SLAPP law and California Civil Code § 47.1 The court found that while the Lively parties may be entitled to fees and costs, it could not make a determination yet because (1) it had not yet determined which state’s law governed the defamation claims against Reynolds, Sloane and Vision PR, and (2) it had not yet ruled on whether Lively’s statements were privileged under California Civil Code § 47.1. Thus, the court left for another day whether the Wayfarer parties will suffer financial consequences for asserting their claims.

Summary prepared by David Grossman and Edward Delman.