AceShowbiz - Blake Lively's legal wrangle with Justin Baldoni has taken another contentious turn. This time, Jed Wallace of the crisis-management firm Street Relations has filed a defamation lawsuit against the actress. They were not happy after being dragged into the legal spat between the two stars.

Wallace's firm, which he claims was hired by Baldoni's team, is accused of being part of an extensive smear campaign aimed at Lively. The lawsuit seeks at least $7 million in damages and a court declaration that Wallace did not sexually harass or retaliate against Lively.

On February 4, Wallace initiated legal proceedings in a Texas federal court, arguing that Lively's claims of his involvement in a digital smear campaign were unfounded.

Lively had previously stated in her California Civil Rights Department complaint that Wallace was instrumental in orchestrating online harassment against her, allegedly at the behest of Baldoni's PR team. Her petition accused Wallace of "weaponizing a digital army" across various social media platforms, a claim he staunchly denies.

Lively's legal team has been vocal about their stance, maintaining that the lawsuit represents "transparent retaliation" for her allegations of sexual harassment and retaliation that she originally filed with the California Civil Rights Department.

"While this lawsuit will be dismissed, we are pleased that Mr. Wallace has finally emerged from the shadows, and that he too will be held accountable in federal court," Lively's lawyers asserted.

Jed Wallace's complaint highlights Lively's lack of evidence to support her allegations. According to his attorneys, Wallace "has never met or spoken to Ms. Lively. Ever."

Additionally, Wallace rebuffs any claims of a contractual relationship with Lively, a point echoed in the lawsuit which states, "Neither Wallace nor Street had anything to do with the alleged sexual harassment, retaliation, failure to investigate or aiding and abetting the alleged harassment or alleged retaliation. Neither could they have breached a contract with Lively because no such contract exists."

The ongoing saga began during the filming of "It Ends With Us" and became increasingly public following the movie's release before it became official in December 2024 when Lively first stepped forward with her sexual harassment claims and accused Baldoni of orchestrating a campaign to ruin her reputation.

Baldoni fired back with a $400 million lawsuit against Lively, her husband Ryan Reynolds, and their publicist, alleging extortion and defamation. Both sides continue to gear up for a highly anticipated trial set for March 2026.

With each new legal maneuver, the stakes continue to rise, drawing public interest and media scrutiny. As Wallace's lawsuit unfolds, the high-profile conflict between Lively and Baldoni promises to keep audiences captivated.