Dominion Voting Systems and Fox reach last-minute $787M settlement defamation lawsuit
Dominion sued in 2021, contending its business was ruined by false vote-rigging claims
Fox Corporation and Fox News reached a $787.5-million US settlement in a defamation lawsuit by Dominion Voting Systems on Tuesday, averting a high-profile trial that would have put 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 stunning settlement emerged just as opening statements were supposed to begin before a jury, abruptly ending a case that had embarrassed Fox News over several months and raised the possibility that network founder Rupert Murdoch and stars such as Tucker Carlson and Sean Hannity would have to testify publicly.
"The truth matters. Lies have consequences," Dominion lawyer Justin Nelson told reporters outside a Delaware courthouse after Superior Court Judge Eric Davis announced the deal.
Terms of the resolution were not immediately disclosed. Dominion lawyers declined to answer questions about whether Fox News would apologize publicly or make reforms.
Dominion had sought $1.6 billion US in damages in the lawsuit filed in 2021, with Delaware Superior Court Judge Eric Davis presiding over the case in Wilmington.
Fox issued a statement saying it does "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."
The statement went on: "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."
The decision to settle also followed a ruling by the judge that Fox could not invoke free speech protections under the U.S. Constitution in its defence.
The deal is a significant amount of money, even for a company the size of Fox. It represents about one-quarter of the $2.96 billion the company reported earning last year before interest, taxes, depreciation and amortization — a figure often used to approximate a company's cash flow.
The settlement also follows a $965-million US judgment issued last year against Alex Jones by a Connecticut jury for spreading false conspiracy theories about the Sandy Hook school massacre
False claims were at heart of case
Coupled with other lawsuits in the pipeline, the agreement shows there is a real financial risk for conservative media that traffic in conspiracy theories. What remains unknown is how much of a deterrent this will be.
Even as the Dominion case loomed this spring, Carlson aired his alternate theories about what happened at the Jan. 6, 2021, insurrection.
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 favour of Democrat Joe Biden over Republican Donald Trump. Dominion argued that these on-air claims caused the company "enormous and irreparable economic harm."
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. Based on a slew of internal communications, Dominion alleged that Fox staff, from newsroom employees all the way up to Murdoch, knew the statements were false but continued to air them out of fear of losing viewers to media competitors on the right.
In documents released in recent months, Fox executives and anchors discussed how not to alienate their audience, many of whom believed Trump's claims of fraud despite no evidence to back them up.
Some of the exhibits were simply embarrassing, such as scornful behind-the-scenes opinions about Trump, whose supporters form the core of the network's viewers. Text exchanges revealed as part of the lawsuit show Carlson declaring, "I hate him passionately," and saying that "we are very, very close to being able to ignore Trump most nights."
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.
Dominion was originally founded in Toronto by John Poulos and James Hoover.
Another suit
Several First Amendment experts said Dominion's case was among the strongest they had ever seen. But there was real doubt about whether Dominion would be able to prove to a jury that people in a decision-making capacity at Fox could be held responsible for the network's actions.
Dominion's Nelson called the settlement "a tremendous victory" and noted that there are six more lawsuits pending regarding election claims.
"We settled because it was about accountability," Nelson said in an interview with The Associated Press. "Our goals were to make sure that there was accountability for the lies, and to try to make our client right. And we accomplished both goals."
Another U.S. voting technology company, Smartmatic, is pursuing its own defamation lawsuit against Fox seeking $2.7 billion US in damages in a New York state court.
Fox Corp. shareholders are demanding company records that may show whether directors and executives properly oversaw the Fox News coverage of Trump's election-rigging claims, sources told Reuters, in what could be a prelude to lawsuits seeking to make directors liable for costs.
Fox has called Dominion's damages claim unrealistic and based on flawed economic modelling. An expert report commissioned by Dominion attributed scores of lost contracts to Fox's coverage, though much of the report remains under seal.
Fox claimed in a filing on Sunday that Dominion had agreed to knock off more than $500 million US from its damages claim. A Dominion spokesperson disputed that claim and said its damages claim remained unchanged.
Fox Corp. reported nearly $14 billion US in annual revenue last year.
Dominion has said defamatory statements about it aired on Fox shows including Sunday Morning Futures, Lou Dobbs Tonight and Justice with Judge Jeanine.
Dominion also has cited evidence that some hosts and producers thought the guests spreading the false statements, including former Trump attorneys Rudy Giuliani and Sidney Powell, could not back up their allegations.
Fox had argued that coverage of the vote-rigging claims was inherently newsworthy and protected by the U.S. Constitution's First Amendment guarantee of press freedom.
With files from CBC's Katie Simpson and The Associated Press
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