Blake Lively smear campaign allegations against a New York crisis PR firm moved closer to trial on Thursday after a Manhattan federal judge rejected a bid by The Agency Group to dismiss the case, clearing the path for proceedings set for 18 May 2026. The dispute, brought by Lively, claims that the firm helped orchestrate a retaliatory online and media strategy following her allegations of on-set sexual harassment against director Justin Baldoni during the making ofIt Ends With Us.
Judge Lewis Liman, sitting in the Southern District of New York, ruled that the company could still be held liable under California employment law arguments advanced by Lively. The legal fight stems from the 2024 release ofIt Ends With Us, in which Lively starred alongside Baldoni, who also directed the adaptation of Colleen Hoover's bestselling novel.
Earlier this month, US District Judge Lewis Liman, a Trump appointee, narrowed Lively's case significantly, dismissing 10 claims including sexual harassment, defamation and civil conspiracy. The retaliation-related claims are still going forward.
The Agency Group had argued that it could not be held liable as a non-employer third party and sought summary judgment to remove it from the case before trial. The firm maintained that the conduct alleged by Lively fell outside the scope of California's Fair Employment and Housing Act and therefore could not trigger liability.
Judge Liman disagreed, rejecting the attempt to exit the proceedings at this stage. In his written opinion, he pointed to the way the statute could apply to third parties who assist unlawful conduct tied to employment disputes.
'It makes little sense to say that FEHA's aiding-and-abetting provision is intended only to prevent employers from aiding and abetting employment discrimination committed by third parties ... rather than preventing third parties from aiding and abetting employment discrimination committed by employers,' the judge wrote, according to theCourthouse News.
The judge focused on how the entertainment industry works in practice. He pointed out that in film and television, public image really matters. For actors in particular, what people think about them can affect whether they get hired for future roles, sometimes just as much as their acting ability.
Because of that, he said damage to someone's reputation online or in the media could be seen as affecting their career if it is linked to claims of retaliation. In other words, if harmful stories are spread as part of a response to a complaint, they might not just be 'bad publicity' but something that impacts someone's ability to work.
The Agency Group disagrees with that view. It says its role was simply to manage public relations during a very high-profile dispute, using standard crisis communication methods that are common when celebrities are involved in legal or reputational controversies.
Lively, widely known for her role inGossip Girl, has accused the PR firm and its founder, Melissa Nathan, of helping seed damaging narratives across social media and entertainment outlets. She claims those narratives painted her as a 'bully' and 'mean girl' to undermine her professional standing after she raised concerns about conduct on set.
Source: International Business Times UK
