Fox News-Dominion Voting Systems Trial Delayed; Settlement On The Table?

  • by:
  • Source: Wayne Dupree
  • 04/16/2023
The widely awaited trial on a voting-machine company's defamation charges against Fox News has been postponed by a Delaware judge, according to the court's notice, which came as the network was exploring settlement options. Judge Eric Davis of the Superior Court announced late on Sunday that the trial will begin on Tuesday rather than Monday. He omitted giving a justification for the change. According to persons with knowledge of the matter, Fox has made a last-ditch effort to reach a settlement with Dominion Voting Systems outside of court.

A jury will determine a once-in-a-generation defamation case if the matter isn't settled outside of court since it might have significant effects on the network and test the limits of contemporary media law. About six weeks are allotted for the process.

Dominion has charged Fox News, a division of Fox Corp., FOX -1.35%decrease; red down pointing triangle, with broadcasting erroneous statements by presenters and guests that Dominion assisted in rigging the 2020 U.S. presidential election in favour of Joe Biden. It claims that Fox News and Fox Business egregiously deviated from journalistic principles by airing stolen-election pieces they knew or should have known were untrue, and is demanding $1.6 billion in damages for purported financial injury to the firm.

Fox has made an effort to portray its activities and election coverage as mainstream by focusing on relevant charges made by former President Donald Trump and his cronies. However, in recent months, it has lost a number of pretrial judgements.

The disclosure of internal Fox correspondence during the legal dispute demonstrates that network executives and hosts were sceptical of allegations of election fraud but also worried about offending Mr. Trump supporters.

According to Victoria Baranetsky, general counsel at the Centre for Investigative Reporting, "In some ways, it's just another piece of litigation for a significant sum of money, but it's also unlike any case you've seen before, weighing the future of Fox News, what's allowed for what a reporter can trust, and the future of faith in the media." "The stakes are high in those ways."

Due to the First Amendment's strong safeguards for media organisations, plaintiffs in defamation claims often lose their cases. Since most lawsuits are settled before they ever reach trial, some contend that current precedent makes it too difficult for organisations or people to defend their reputations in court. 

Legal experts believe that the Dominion case may serve as a noteworthy counterexample. Judge Davis has already determined that Fox News and Fox Business did indeed broadcast misleading assertions regarding Dominion, which were made by both network hosts and Trump aides, including Sidney Powell and Rudy Giuliani, who appeared as guests. This gives the corporation a leg up as the trial is set to begin.

In addition, the judge said Fox had a credibility issue and questioned if the business had given the court the necessary disclosures and facts. Fox disputes any wrongdoing.

If the case goes to trial, the jury will have to determine whether Fox had "actual malice" when it aired misleading statements. This threshold depends on whether Dominion can show that Fox knew it was airing false material or behaved carelessly.

Dominion claims it has sufficient proof to pass this test. It argues that text and email exchanges between Fox executives and hosts—in some cases making fun of statements made by guests or openly fretting about losing viewers to rival networks adopting a harsher stance—show that they were aware the material was fraudulent yet continued to broadcast the bogus claims.

According to a court document, not long after the election, Fox News prime-time anchor Tucker Carlson wrote to his producer that "Sidney Powell is lying" about having proof of election fraud. He sent Laura Ingraham, another news personality, a similar letter. "I find that really disgusting. According to Mr. Carlson, our viewers are decent individuals who really believe this. 

Rupert Murdoch, chairman of Fox Corp., conceded in a deposition that certain Fox presenters and commentators supported the fraudulent election-fraud story but insisted that Fox Corp. itself did not. Murdoch is anticipated to be asked to testify. In retrospect, Mr. Murdoch stated, "I would have preferred us to be tougher in our denunciation of it. 

Other prominent witnesses who could be summoned to testify at the trial include Mr. Carlson, Maria Bartiromo, and Sean Hannity, who are also Fox personalities.

Fox Corp., a defendant in this lawsuit, is owned in common with News Corp NWSA -1.25%decrease; red down pointing triangle, the parent company of Dow Jones & Co., the publisher of The Wall Street Journal. 

The lawsuit, according to a Fox spokesperson, is "a political crusade in search of a financial windfall, but the real cost would be cherished First Amendment rights," she said. Dominion had promoted "irrelevant and misleading information to generate headlines," she said. 

"The First Amendment does not shield broadcasters that intentionally or carelessly spread lies," Dominion stated in a statement. On 17 programmes that aired on Fox News and Fox Business between November 8, 2020, and January 26, 2021, presenters or their guests, as well as three tweets by then-host Lou Dobbs, according to the corporation, defamed it.

According to Wells Fargo, Fox News and Fox Business are the company's two biggest revenue generators, making up almost 70% of its profits before interest, taxes, depreciation, and amortisation.

The jury's verdict, according to veteran defamation attorney Lee Levine, won't ultimately endanger Fox Corporation's existence. Sincerely, Mr. Levine said, "I don't think it will change much about the way Fox does business." 

Wall Street experts said that although Fox might take a significant financial hit, doing so may restrict its ability to conduct share buybacks. Argus Research senior analyst Joseph Bonner stated, "They can afford it, but of course there are other things that they'd rather do with that money."

When Fox released its most recent quarterly financial report in February, it had just under $4 billion in cash on hand. It approved a fresh $3 billion stock repurchase programme at that time, increasing its total authorised repurchases to $7 billion.

In the case of a defeat, it is very improbable that Fox would be compelled to pay the whole $1.6 billion in damages, according to Huber Research analyst Doug Arthur.

In court filings, Dominion stated that the $1.6 billion request was made to make up for reputational harm that resulted in lost sales and decreased market value.

Fox's attorneys have maintained that Dominion's requests for damages are excessive and that the suspicions of election fraud haven't severely hurt their client's business since many of its clients have remained with Fox.

Another voting-machine company, Smartmatic USA Corp., has filed a $2.7 billion defamation lawsuit against Fox over similar allegations. Additionally, a Venezuelan businessman recently settled a defamation claim that he had been falsely accused of aiding in the rigging of the 2020 U.S. presidential election.

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