Fox Corp and Fox News have settled a defamation lawsuit with Dominion Voting Systems for a record-breaking $787.5 million. The lawsuit was brought against Fox for its coverage of false vote-rigging claims in the 2020 US election, which Dominion alleged had ruined its business. The settlement was announced just as the trial was set to begin, with Dominion seeking $1.6 billion in damages.
Dominion CEO John Poulos hailed the settlement as “historic,” stating that “Fox has admitted to telling lies about Dominion that caused enormous damage to my company, our employees and our customers.” He emphasized the importance of truthful reporting in the media for democracy.
The lawsuit focused on whether Fox was liable for airing false claims that Dominion’s ballot-counting machines were used to manipulate the presidential election in favor of Democrat Joe Biden over then-President Donald Trump, a Republican. The settlement spared Fox from having its best-known figures, including executives such as Rupert Murdoch, Tucker Carlson, Sean Hannity, and Jeanine Pirro, called to the witness stand and subjected to potentially damaging questioning.
While shares of Fox Corp closed up slightly at $34 per share, they were down 1% in after-hours trading following disclosure of the settlement amount. However, Fox has cash on hand to pay for the settlement, having committed $3 billion to buy back shares in the first quarter after revenues beat estimates. Fox Corp CEO Lachlan Murdoch has previously stated that the company has about $4 billion cash on hand.
Legal experts note that the $787.5 million settlement is the largest amount ever paid to conclude an American media libel case. The previous highest payment occurred in 2017, when Walt Disney Co paid $177 million to settle the “pink slime” defamation case against its ABC network by Beef Products Inc.
In addition to the Dominion lawsuit, Fox is facing another defamation lawsuit from Smartmatic, another US voting technology company. Smartmatic is seeking $2.7 billion in damages in a New York state court. Legal experts note that for many plaintiffs, a court holding and admission by the defendant about falsity are even more important than any actual money damages.
The primary question in the Dominion lawsuit was whether Fox knowingly spread false information or recklessly disregarded the truth, the standard of “actual malice” that Dominion had to show to prevail in a defamation case. 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 claimed that Fox amplified the untrue claims to boost its ratings and prevent its viewers from migrating to other media competitors on the right.
Fox had earlier argued that claims by Trump and his lawyers about the election were inherently newsworthy and protected by the US Constitution’s First Amendment. However, Delaware Superior Court Judge Eric Davis ruled in March that Fox could not use those arguments as a defense, finding its coverage was false.
The settlement with Dominion is expected to have a significant impact on the media landscape, as it sets a new standard for media companies and their coverage of controversial issues. Legal experts emphasize the importance of truthful reporting in the media and the role it plays in ensuring democracy.
