© Reuters. FILE PHOTO: A person walks by Fox News signage posted on the News Corporation building in New York City, U.S. April 12, 2023 REUTERS/Andrew Kelly/File Photo
By Helen Coster and Jack Queen
WILMINGTON, Delaware (Reuters) -Fox Corp and Fox News on Tuesday settled a defamation lawsuit by Dominion Voting Systems for $787.5 million, averting a high-profile trial putting one of the world’s top media companies in the crosshairs over its coverage of false vote-rigging claims in the 2020 U.S. election.
The settlement was announced by the two sides and the judge in the case at the 11th hour, with a jury selected just hours earlier in Delaware and the trial poised to kick off with opening statements. Dominion had sought $1.6 billion in damages in the lawsuit filed in 2021.
Dominion CEO John Poulos called the settlement “historic.”
“Fox has admitted to telling lies about Dominion that caused enormous damage to my company, our employees and our customers,” Poulos said in a statement. “Nothing can ever make up for that. Throughout this process, we have sought accountability and believe the evidence brought to light through this case underscores the consequences of spreading and endorsing lies.”
At issue in the lawsuit was whether Fox was liable for airing the false claims that Denver-based Dominion’s ballot-counting machines were used to manipulate the 2020 U.S. election in favor of Democrat Joe Biden over Republican then-President Donald Trump. Dominion had argued that these on-air claims caused the company “enormous and irreparable economic harm.”
“We acknowledge the court’s rulings finding certain claims about Dominion to be false. This settlement reflects Fox’s continued commitment to the highest journalistic standards. We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues,” Fox said in a statement that was read on air on Fox News.
Shares of Fox Corp closed up slightly at $34 per share, but were down 1% in after-hours trading after the settlement amount was disclosed. Fox has plenty of cash on hand to pay for a settlement. It committed another $3 billion to buy back shares in the first quarter after revenues beat estimates. Fox Corp CEO Lachlan Murdoch told Wall Street analysts in February that the company had about $4 billion cash on hand.
Dominion lawyers declined to answer questions about whether Fox News would apologize publicly or make reforms.
Fox News is the most-watched U.S. cable news network, according to Nielsen.
“Truthful reporting in the media is essential to our democracy,” Dominion’s Poulos said.
Delaware Superior Court Judge Eric Davis, presiding over the case in Wilmington, had ordered a one-day trial postponement on Monday before another delay on Tuesday, as the two sides hammered out a deal in private.
The deal spared Fox the peril of having some of its best-known figures called to the witness stand and subjected to potentially withering questioning, including executives such as Rupert Murdoch, the 92-year-old media mogul who serves as Fox Corp chairman, and Fox CEO Suzanne Scott as well as on-air hosts including Tucker Carlson, Sean Hannity and Jeanine Pirro.
The primary question for jurors was to be whether Fox knowingly spread false information or recklessly disregarded the truth, the standard of “actual malice” that Dominion must show to prevail in a defamation case.
In February court filings, Dominion cited a trove of internal communications in which Murdoch and other Fox figures privately acknowledged that the vote-rigging claims made about Dominion on-air were false.
Dominion said Fox amplified the untrue claims to boost its ratings and prevent its viewers from migrating to other media competitors on the right including One America News Network, which Dominion is suing separately.
ANOTHER LAWSUIT PENDING
Adding to the legal risks for Fox, another U.S. voting technology company, Smartmatic, is pursuing its own defamation lawsuit seeking $2.7 billion in damages in a New York state court. Fox Corp reported nearly $14 billion in annual revenue last year.
“Fox’s statement about the settlement makes clear that Fox acknowledges ‘the court’s ruling finding certain claims about Dominion were false,'” said Mary-Rose Papandrea, a constitutional law professor at the University of North Carolina School of Law. “For many plaintiffs, a court holding, and admission by the defendant about falsity, are even more important than any actual money damages.”
Fox had argued that claims by Trump and his lawyers about the election were inherently newsworthy and protected by the U.S. Constitution’s First Amendment. Davis ruled in March that Fox could not use those arguments, finding its coverage was false, defamatory and not protected by the First Amendment.
Dominion in 2021 sued Fox Corp and Fox News, contending that its business was ruined by the false vote-rigging claims that were aired by the influential American cable news outlet known for its roster of conservative commentators.
The trial was to have been a test of whether Fox’s coverage crossed the line between ethical journalism and the pursuit of ratings, as Dominion alleges and Fox denies. Fox had portrayed itself in the pretrial skirmishing as a defender of press freedom.
The complaints referenced instances in which Trump allies including his former lawyers Rudolph Giuliani and Sidney Powell appeared on Fox News to advance the false allegations.
Dominion obtained internal communications and testimony from Murdoch and other Fox News executives and commentators. Murdoch internally described the election-rigging claims as “really crazy” and “damaging” but declined to wield his editorial power to stop them and conceded under oath that some Fox hosts nonetheless “endorsed” the baseless claims, Dominion told the court in a filing.
Under questioning from a Dominion lawyer, Murdoch testified that he thought everything about the election was on the “up-and-up” and doubted the rigging claims from the very beginning, according to Dominion’s filing.
Asked if he could have intervened to stop Giuliani from continuing to spread falsehoods on air, Murdoch responded, “I could have. But I didn’t,” the filing said.