Fox settles Dominion defamation lawsuit for $787.5 million, avoiding trial

By Helen Coster and Jack Queen

WILMINGTON, Delaware (Reuters) -Fox Corp and Fox News on Tuesday settled a defamation lawsuit by Dominion Voting Systems for $787.5 million, averting a high-profile trial putting 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 settlement was announced by Fox, Dominion and the judge in the case at the 11th hour, with a 12-person jury selected on Tuesday morning and the case poised to kick off with opening statements on Tuesday afternoon. Dominion had sought $1.6 billion in damages in the lawsuit filed in 2021, with Delaware Superior Court Judge Eric Davis presiding over the case in Wilmington.

Dominion disclosed the settlement figure and its CEO John Poulos said Fox had admitted to telling lies about his company. Dominion attorney Justin Nelson said the settlement “represents vindication and accountability” and that “lies have consequences.” Dominion lawyers declined to answer questions about whether Fox News would apologize publicly or make reforms.

“We 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. 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,” Fox said in a statement.

Shares of Fox Corp closed up slightly at $34 per share, but were down 1% in after-hours trading after the settlement amount was disclosed.

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 favor of Democrat Joe Biden over Republican then-President Donald Trump. Dominion had argued that these on-air claims caused the company “enormous and irreparable economic harm.”

Davis had ordered a one-day trial postponement on Monday before another delay on Tuesday, as the two sides hammered out a deal in private.

The deal spared Fox the peril of having some of its best-known figures called to the witness stand and subjected to potentially withering questioning, including executives such as Rupert Murdoch, the 92-year-old media mogul who serves as Fox Corp chairman, and Fox CEO Suzanne Scott as well as on-air hosts including Tucker Carlson, Sean Hannity and Jeanine Pirro.

The decision to settle also followed a ruling by the judge last month that Fox could not invoke free speech protections under the U.S. Constitution in its defense.

Fox News is the most-watched U.S. cable news network, according to Nielsen.

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.

In February court filings, 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 said Fox amplified the untrue claims to boost its ratings and prevent its viewers from migrating to other media competitors on the right including One America News Network, which Dominion is suing separately.

ANOTHER LAWSUIT PENDING

Adding to the legal risks for Fox, another U.S. voting technology company, Smartmatic, is pursuing its own defamation lawsuit seeking $2.7 billion in damages in a New York state court. Fox Corp reported nearly $14 billion in annual revenue last year.

Fox had argued that claims by Trump and his lawyers about the election were inherently newsworthy and protected by the Constitution’s First Amendment.

Davis ruled in March that Fox could not use those arguments, finding its coverage was false, defamatory and not protected by the First Amendment.

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.

The trial was to have been a test of whether Fox’s coverage crossed the line between ethical journalism and the pursuit of ratings, as Dominion alleges and Fox denies. Fox had portrayed itself in the pretrial skirmishing as a defender of press freedom.

The complaints referenced instances in which Trump allies including his former lawyers Rudolph Giuliani and Sidney Powell appeared on Fox News to advance the false allegations about Dominion.

Dominion obtained internal communications and testimony from Murdoch and other Fox News executives and commentators. Murdoch internally described the election-rigging claims as “really crazy” and “damaging” but declined to wield his editorial power to stop them and conceded under oath that some Fox hosts nonetheless “endorsed” the baseless claims, Dominion told the court in a filing.

When Murdoch watched Giuliani and Powell make their claims about Dominion on Nov. 19, he characterized them to Fox News Chief Executive Suzanne Scott as “terrible stuff damaging everybody, I fear,” according to the filing.

Under questioning from a Dominion lawyer, Murdoch testified that he thought everything about the election was on the “up-and-up” and doubted the rigging claims from the very beginning, according to Dominion’s filing.

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