WILMINGTON, Delaware (Reuters)—Fox Corp and Fox News have resolved a defamation lawsuit by Dominion Voting Systems, the judge in the case said on Tuesday, 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 resolution, whose terms were not immediately disclosed, was announced 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.
Davis had ordered a one-day trial postponement on Monday before the delay on Tuesday, apparently as the two sides hammered out a deal.
The deal spares Fox the peril of having some of its best-known figures called to the witness stand and subjected to potentially withering questioning, from executives including 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 that Fox could not invoke free speech protections under the U.S. Constitution in its defense.
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 argued that these on-air claims caused the company "enormous and irreparable economic harm."
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. 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.
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.
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.
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.
(Reporting by Helen Coster in Wilmington and Jack Queen in New York; writing by Tom Hals and editing by Will Dunham)