After Settling For $787M With Dominion, Fox News Faces Even Bigger Hurdle In $2.7B New York Defamation Case

Zinger Key Points
  • Smartmatic alleges Fox broadcasted “over 100 false statements and implications” about a conspiracy to rig the 2020 election.
  • The company expects Fox to pay up after the network reached a settlement with Dominion Voting Systems.

After a legal settlement that cost Fox Corp FOX $787.5 million this week, the mass media company continues to face heavy-duty legal fire from another company that is now demanding $2.7 billion in defamation charges.

On Tuesday, Dominion Voting Systems announced it had reached a settlement in its defamation lawsuit with Fox News, a subsidiary of Fox Corp., for the network's erroneous reporting of a claimed plot to rig the 2020 election in favor of President Joe Biden.

Smartmatic, another provider of electronic voting systems, is suing Fox for $2.7 billion in damages for similar defamation accusations related to the aftermath of the 2020 election.

Dominion, which provided electronic voting hardware and software for the election, said its brand and business were heavily affected by Fox's false claims that put the company in the center of the alleged conspiracy.

Had the trial gone ahead in Delaware, Fox could have been forced to pay $1.6 billion in damages in the event of a loss, with the addition of months of bad publicity from one of the most closely followed defamation trials of the decade.

Fox’s Next Legal Challenge: Smartmatic's suit includes Fox anchors Maria Bartiromo, Lou Dobbs and Jeanine Pirro, as well as lawyers Rudolph W. Giuliani and Sidney Powell, who appeared live on Fox News as they backed the case for a conspiracy theory claiming that Donald Trump was the victim of a rigged election, according to the New York Times.

It remains to be seen to what extent Giuliani and Powell's association with the network would warrant them a place in the same lawsuit, as neither of them are Fox employees and they were acting as commentators or interviewees.

"Dominion's litigation exposed some of the misconduct and damage caused by Fox's disinformation campaign," wrote Smartmatic attorney J. Erik Connolly in a Tuesday statement.

"Smartmatic will expose the rest," he said, adding the company he represents remains committed to "clearing its name, recouping the significant damage done to the company, and holding Fox accountable for undermining democracy."

Smartmatic alleges Fox broadcasted "over 100 false statements and implications" about the former's involvement in an alleged conspiracy.

The lawsuit was filed in New York State Supreme Court in 2021, but the trial is long behind Dominion's. Earlier this year, a New York appeals court ruled out an appeal by Fox to dismiss the suit.

Who Owns Fox? And What About News Corp? In January, Rupert Murdoch, whose family continues to own 39% of Fox Corp., called off a proposed plan earlier this year to reunite the company with News Corp. The latter is the parent company of The Wall Street Journal, Market Watch, Dow Jones and The New York Post, as well as several other media companies in the U.K. and Australia, including the Sun, The Sunday Times and The Australian.

Murdoch's family also owns a 42% stake in News Corp. NWSA The two companies split up in 2013 in an effort to “unlock even greater long-term shareholder value,” as Murdoch said in 2012.

News Corp inherited the publishing side of the business while Fox Corp was built to parent the broadcasting side of the business. 

In 2019, a big part of Fox, labeled 21st Century Fox including its movie studio business, was sold to The Walt Disney Company DIS for $71.3$ billion. The current Fox Corp. is the legal continuation of all assets not bought by Disney.

Today, the Fox Corp and News Corp continue to be separate entities, limiting News Corp's liability in the Fox defamation scandals.

FOXA Price Action: Fox Corp Class A stock was down 0.24% Wednesday afternoon.

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Posted In: NewsLegalTop StoriesMarketsMediaGeneralDominion Voting SystemsDonald TrumpJoe BidenRupert MurdochSmartmatic
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