A federal judge in New York on Thursday gutted much of Blake Lively‘s case against her “It Ends With Us” co-star Justin Baldoni, including her claims she was subjected to sexual harassment on set.

Lively is allowed to pursue certain claims of retaliation against Baldoni’s public relations team over alleged harm to her reputation, according to the ruling by Judge Lewis Liman.

The decision comes one month before the scheduled start of the trial while the two sides have been in settlement negotiations.

In his ruling, Liman said some of Baldoni’s conduct “was not so far beyond what might reasonably be expected to take place between two characters” in a sexually charged movie like “It Ends With Us.” 

“That Baldoni suggested scenes involving sexual acts in the context of developing a motion picture involving such adult themes did not create a ‘sexually objectionable environment’ or an environment hostile to women (or to men) because of sex,” Liman added.

Liman is allowing Lively to pursue her claims of an orchestrated smear campaign by Baldoni’s PR team, which Liman said, “at least arguably crossed the line.” 

“The reputational effects have been particularly severe given the nature of Lively’s profession, which places a heavy emphasis on personal and professional marketability,” Liman wrote.

Sigrid McCawley, a member of Lively’s legal team, told ABC News in a statement: “This case has always been and will remain focused on the devasting retaliation and the extraordinary steps the defendants took to destroy Blake Lively’s reputation because she stood up for safety on the set and that is the case that is going to trial.”

“For Blake Lively, the greatest measure of justice is that the people and the playbook behind these coordinated digital attacks have been exposed and are already being held accountable by other women they’ve targeted,” McCawley added. “She looks forward to testifying at trial and continuing to shine a light on this vicious form of online retaliation so that it becomes easier to detect and fight.”

McCawley ended the statement by saying, “Sexual harassment isn’t going forward not because the defendants did nothing wrong but because the court determined Blake Lively was an independent contractor, not an employee.” 

Meanwhile, Alexandra Shapiro and Jonathan Bach of Baldoni’s legal team, said in a statement to ABC News: “We’re very pleased the Court dismissed all sexual harassment claims and every claim brought against the individual defendants: Justin Baldoni, Jamey Heath, Steve Sarowitz, Melissa Nathan, and Jennifer Abel.”

“These were very serious allegations, and we are grateful to the Court for its careful review of the facts, law and voluminous evidence that was provided,” Baldoni’s legal team added. “What’s left is a significantly narrowed case, and we look forward to presenting our defense to the remaining claims in court.”

In February, the two actors and their attorneys attended a court-ordered settlement conference at the United States District Court in New York, in an attempt to reach a settlement in Lively’s lawsuit against Baldoni but were unsuccessful. 

The court-ordered settlement conference was a last-ditch attempt at resolving the legal battle that has now stretched on for more than a year.

Lively filed a complaint against Baldoni with the California Civil Rights Department in December 2024, accusing him of sexual harassment on the set of “It Ends with Us” and accusing both Baldoni and his production company Wayfarer Studios of engaging in a “social manipulation” campaign to “destroy” her reputation.

The two later filed lawsuits against each other in New York, with Lively reiterating the claims made in her earlier complaint and accusing Baldoni and Wayfarer of allegedly engaging in “unlawful, retaliatory astroturfing” to ruin her reputation in a lawsuit seeking $500 million in damages. 

Baldoni’s attorney denied the allegations. 

Shortly after Lively filed her lawsuit, Baldoni filed a $400 million countersuit against Lively, her husband Ryan Reynolds, and the couple’s publicist for extortion and defamation, claiming Lively had “robbed” him of control over the film and had destroyed his reputation.

Lively’s lawyers denied the allegations and called Baldoni’s suit “another chapter in the abuser playbook.”

A federal judge in New York dismissed Baldoni’s suit last June, formally ending the counterclaim in October after Baldoni did not refile an amended complaint.