Fox Must Face Smartmatic’s $2.7 Billion Defamation Suit

Erik Larson
·3 min read
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(Bloomberg) -- Fox Corp. was ordered to face a $2.7 billion defamation lawsuit by Smartmatic Corp., one of two voting technology companies falsely accused on Fox News of rigging the 2020 US presidential election against Donald Trump.

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The decision Wednesday by a New York judge is the latest setback for Fox after the media giant agreed in April to pay $788 million to settle a similar suit by Dominion Voting Systems Inc., the other company targeted by the conspiracy theory. Fox continued airing the allegations even after they were widely debunked.

Justice David B. Cohen in Manhattan denied Fox Corp.’s motion to dismiss the suit after finding Smartmatic had sufficiently laid out claims that executives at the parent company — including Rupert Murdoch and his son Lachlan Murdoch — were involved in directing the election coverage by its subsidiary. Fox News Network LLC, along with several of its current and former on-air personalties, are also named in the suit and previously lost their attempts to dismiss the case.

“In essence, plaintiffs allege that no programming, messaging, or employment decisions were made at News without Corp.’s knowledge, approval, and direction, thus rendering News wholly dominated by Corp.,” Cohen said in the ruling.

The decision sets up a possible trial on Smartmatic’s claims next year. Fox and Fox News have both argued their coverage is protected by the First Amendment right to free speech because they were covering important claims being made at the time by a sitting president and his lawyers.

‘Ready to Defend’

“We will be ready to defend this case surrounding extremely newsworthy events when it goes to trial, likely in 2025,” Fox said in a statement. “As a report prepared by our financial expert shows, Smartmatic’s damages claims are implausible, disconnected from reality, and on their face intended to chill First Amendment freedoms.”

On Tuesday, the same judge allowed Fox’s counterclaims against Smartmatic to proceed, denying Smartmatic’s motion to toss them out. Fox argues the suit violates a New York law against the use of litigation to chill speech, pointing to the eye-popping damages amount as evidence.

“We look forward to proceeding and holding Fox Corporation, as well as Fox News, responsible for the damage they did to Smartmatic,” the company’s lawyer, Erik Connolly, said in a statement.

The lawsuit stems from news coverage in the weeks after the 2020 presidential election, with Fox News guests and hosts airing claims that Smartmatic and Dominion conspired with Democrats and foreign hackers to flip millions of votes away from Trump. The former president, who is seeking to return to the White House, still floats the conspiracy theory.

Read More: Murdoch Compared to ‘Mafia Boss’ in Smartmatic Election Suit

Fox Corp. was initially dismissed from the case after Cohen ruled Smartmatic’s allegation didn’t fully connect the parent company to the actions at Fox News. But the amended suit filed by the voting machine company fixed the issue, the judge ruled, by properly alleging how the Murdochs “were personally and intimately involved” in the election coverage.

The amended suit also spelled out how Fox Corp. employees allegedly directed the network subsidiary to pivot away from reporting on Joe Biden’s victory after “they were criticized for doing so by Trump and others, and began to lose viewership and ratings,” the judge said.

Smartmatic’s case got a significant boost from evidence and rulings the Dominion lawsuit. In that case, internal Fox emails and text messages were made public as evidence, showing key executives and on-air personalities thought the conspiracy theory was nonsense but allowed it to be amplified anyway.

The case is Smartmatic v. Fox Corp., 151136/2021, New York Supreme Court, New York County (Manhattan).

(Updates with details from the ruling)

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