Fox Dominion settles US election fraud lawsuit for $787.5 million

WILMINGTON, Delaware, April 18 (Reuters) – Fox Corp ( FOXA.O ) and Fox News on Tuesday settled a defamation lawsuit by Dominion Voting Systems for $787.5 million, averting a trial that would put one of the world’s top media companies in the crosshairs. Coverage of allegations of false voter fraud in the 2020 US election.

The settlement, which legal experts said was the largest ever by an American media company, was announced in the 11th hour by both sides and the judge in the case.

The jury had been selected earlier in the day and the trial was set for opening statements in Wilmington, Delaware. Dominion sought $1.6 billion in damages in a lawsuit filed in 2021.

Dominion CEO John Poulos called the settlement “historic.”

“Fox admitted to making lies about Dominion that caused great harm to my company, our employees and our customers,” Poulos said in a statement.

“Truthful reporting in the media is vital to our democracy,” Poulos said.

At issue in the case was whether Fox was responsible for airing false claims that Denver-based Dominion’s vote-counting machines were used to rig the presidential election in favor of Democrat Joe Biden over then-Republican President Donald Trump.

Tuesday’s settlement freed Fox from the risk of calling some of its best-known figures on the witness stand, including chairman Rupert Murdoch, 92, and executives who serve as Fox Corp. chairman. On-air hosts Tucker Carlson, Sean Hannity and Jeanine Brough.

At 4:30 p.m. ET, Fox anchor Neil Goudow entered his news show “Your World” to report on the settlement. Fox’s statement was read on air.

“We are pleased to have reached a resolution to our dispute with Dominion Polling Systems,” the statement said. “We agree with the court’s rulings that found certain claims about Dominion to be false. This settlement reflects FOX’s continued commitment to high journalistic standards. We believe our decision to amicably resolve this dispute with Dominion, rather than a divisive trial, allows the country to move forward from these issues.”

Fox has billions in cash

Shares of Fox Corp were slightly higher at $34 a share, but were down 1% in after-hours trading following the release of the settlement amount. Fox has cash on hand to settle. It committed $3 billion to buy back stock in the first quarter after earnings beat estimates. Fox Corp CEO Lachlan Murdoch told Wall Street analysts in February that the company had about $4 billion in cash on hand.

Dominion’s lawyers declined to answer questions about whether Fox News would issue a public apology or make changes.

Fox News is the most watched American cable news network.

The $787.5 million settlement is the largest paid to settle a US media defamation case, said Richard Toffel, principal of Gallatin Advisory. The previous largest payment came in 2017, when Walt Disney Co. paid $177 million, in addition to insurance recoveries, to settle Beef Products Inc’s “pink slime” defamation lawsuit against the ABC network.

Dominion sued Fox Corp. and Fox News, arguing that its business was ruined by false vote-rigging claims aired by the news outlet known for its roster of conservative commentators. As Dominion alleged and Fox denied, the test was whether Fox’s coverage crossed the line between ethical journalism and the pursuit of ratings. Fox portrayed himself as a defender of press freedom in the pre-trial standoff.

Delaware Superior Court Judge Eric Davis, who heard the case, adjourned the hearing for a day on Monday. Fox has continued settlement talks, two sources familiar with the matter said. Davis delayed the hearing on Tuesday because it appeared the two sides had privately hammered out the deal.

The primary question for jurors will be whether Fox knowingly spread false information or ignored the truth, the “actual malice” standard that Dominion must show to win a defamation case.

In February court filings, Dominion cited internal communications in which Murdoch and other Fox executives privately acknowledged that Dominion’s on-and-off vote-rigging claims were false. Dominion said Fox inflated the false claims to boost its ratings and prevent its audience from migrating to other media rivals on the right.

Another case is pending

Adding to the legal risks for Fox, another US voting technology company, Smartmatic, has filed its own defamation suit in New York state court seeking $2.7 billion in damages.

“For many plaintiffs, a court hearing and a defendant’s admission of falsity are more important than actual monetary damages,” said Mary-Rose Papandrea, a constitutional law professor at the University of North Carolina School of Law.

Fox has previously argued that claims made by Trump and his lawyers about the election are newsworthy in nature and protected by the First Amendment to the US Constitution. Davis ruled in March that Fox could not use those arguments as a defense that its coverage was false, defamatory and not protected by the First Amendment.

The lawsuit cites instances in which Trump’s associates, his former lawyers Rudolph Giuliani and Sidney Powell, appeared on Fox News to make false accusations.

Murdoch described the election fraud claims as “truly crazy” and “damaging,” but refused to use his editorial authority to block them and admitted under oath that some Fox hosts had “supported” the unsubstantiated claims, Dominion filed in court. .

Under questioning by Dominion’s attorney, Murdoch testified that he thought everything about the election was “over-the-top” and suspected fraud claims from the beginning, according to Dominion’s filing.

Asked if he could have intervened to stop Giuliani from continuing to spread false news on air, Murdoch replied, “I could. But I didn’t,” the filing said.

Reporting by Helen Koster in Wilmington and Jack Quinn in New York; Editing by Will Dunham

Our Standards: Thomson Reuters Trust Principles.