Blake Lively's legal headaches are getting worse ... the actress is now being sued by a crisis PR firm for defamation in her ongoing lawsuit battle with Justin Baldoni, TMZ has learned.

Blake was slapped with a new lawsuit by Jed Wallace and his company, Street Relations Inc., after she named both parties along with Baldoni in her December 2024 California civil rights complaint for bad behavior related to the filming of "It Ends With Us."

Wallace accuses Blake of falsely lumping his firm into the allegations she made against Baldoni, and then sending the information to various media outlets, including Elle Magazine. Despite the fact that Blake did not name Wallace or Street Relations in the lawsuit she filed just days later, and he says the damage was done and the media continued to report he had engaged in illegal activity.

Wallace says Blake then doubled down on her conduct — by asking a judge to authorize the taking of his deposition — but falsely accused him of being a subcontractor to a company called TAG to "assist them in their unlawful retaliatory social combat campaign" against Blake.

As a result of Blake's defamatory statements, Wallace says he has suffered millions of dollars in reputational harm with a projected loss to his company that exceeds another million.

Blake's legal team called BS on the lawsuit, telling TMZ ... “Another day, another state, another nine-figure lawsuit seeking to sue Ms. Lively 'into oblivion' for speaking out against sexual harassment and retaliation."

Her lawyers added, "This is not just a publicity stunt — it is transparent retaliation in response to allegations contained within a sexual harassment and retaliation complaint that Ms. Lively 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.”