Fox News settles blockbuster defamation lawsuit with Dominion Voting Systems

Fox News and its parent company Fox Corp. have struck a deal averting a trial in the blockbuster defamation suit filed by the election tech company Dominion Voting Systems over spurious claims of fraud in the 2020 presidential race.

Judge Eric Davis of the Delaware Superior Court announced the settlement from the bench on Tuesday afternoon ahead of the trial's scheduled start.

The parties settled for $787,500,000 — about half of Dominion's original $1.6 billion ask.

The amount "represents vindication and accountability," said Dominion lawyer Justin Nelson. "Lies have consequences."

Dominion CEO John Poulos told reporters, "Fox has admitted to telling lies about Dominion that caused enormous damage to my company, our employees and the customers that we serve. Nothing can ever make up for that. Throughout this process, we have sought accountability," he said. "Truthful reporting in the media is essential to our democracy."

Fox News released a statement shortly after a settlement was announced.

"We acknowledge the Court's rulings finding certain claims about Dominion to be false," the statement said. "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."

"As much evidence as we've seen, there still is plenty more that hasn't been made public. In a trial, the documents and statements that have been redacted, which are likely to constitute some of the most damning evidence against Fox, would have been revealed," said Tom Wienner, a retired Michigan corporate litigator who has been following the case closely at NPR's request.

"Dominion started this case because Fox's defamatory statements had severely damaged its reputation," Wienner added. "By largely trying its case in the court of public opinion, Dominion has gone a long way toward restoring its good name. In the process, of course, Fox's own reputation has been seriously undermined."

A settlement was always on the table

Past the ill will, past the statements that were clearly wrong in real time, past the inflammatory arguments and the soaring declarations of constitutional principle, a settlement always loomed as the logical resolution of the legal clash.

Dominion Voting Systems alleged that Fox stars, executives, journalists and guests defamed the election tech company for segments in which wild and spurious conspiracies held it had switched votes for then-President Donald Trump to Democratic challenger Joe Biden.

Dominion's legal team pursued a "to the pain" strategy, intending to inflict maximum discomfort for Fox and its proprietors in order to secure as big a payout and as public an apology from Fox News as possible. For Fox and its controlling owners, Rupert and Lachlan Murdoch, it was worth the cost to pay for the spectacle to go away.

For Fox, what evidence dribbled out in court hearings and court documents piled embarrassment upon embarrassment upon disgrace:

Fox News chief executive Suzanne Scott warned her colleagues against running fact-checking segments by the network's own reporters debunking lies about election fraud, even as it gave such bogus claims acres of prime real estate.

Many Fox hosts and executives didn't believe conspiracy theories — but didn't stop them

Primetime stars Tucker Carlson, Laura Ingraham and Sean Hannity privately trashed the people who lied about Dominion on their network's airwaves and yet also trashed the reporters who sought to hold them accountable for those lies.

Fox founder Rupert Murdoch — who, under oath, called himself a newsman at heart — advocated going slow in confronting Fox's pro-Trump viewers with unwelcome news in order to protect the franchise.

Hannity didn't believe "for one second" the lies being peddled by Trump and on Fox itself, even though, as Murdoch put it, the star endorsed them "a bit."

Host Maria Bartiromo put on an attorney spinning pro-Trump conspiracy theories and insinuating, without evidence, fraud by Dominion on the basis of a memo whose author, a Minnesota artist, called her own allegations "pretty wackadoodle."

Judge Davis had signaled his deep skepticism over Fox's defense.

Before the jury trial phase of the case had even commenced, Davis ruled in Dominion's favor on key points. Fox had argued Dominion's lawsuit violated free speech provisions in the First Amendment by seeking to hold the network accountable for what it accurately reported that newsworthy figures, including a sitting president, were saying.

Judge Davis found that the statements on Fox's shows were false and had defamed the election tech company.

The judge, known for his even-keeled demeanor on his bench over the years, repeatedly lost his equanimity with Fox's blue-ribbon legal team, as the trial neared.

Davis warned Fox attorneys that he felt misled once he learned, just a week before opening arguments, that Rupert Murdoch held the title "executive chairman" at Fox News — suggesting he had more agency over the network's coverage and tone than it allowed. (Fox said the title was an honorific without meaning for the network's founder.) Davis also questioned whether Fox had withheld other material and information from Dominion's attorneys and the court, moving to appoint a special master to investigate the conduct of Fox's lawyers.

And Davis warned Fox attorneys "don't make me look like an idiot," after they asked that the 92-year-old Murdoch not be subjected to the rigors of being forced to travel to Wilmington to testify in person. Davis noted Murdoch had just announced in the gossip pages of his own New York Post the intention to split time among his four homes in Montana, Los Angeles, New York City and London with his new bride-to-be. That Murdoch called off the wedding, which was to have been his fifth, shortly after, did not appear to mitigate Davis' irritation.

Paying to make the bleeding stop

None of this made for an auspicious start to the trial for Fox or the Murdochs.

And so the Murdochs decided to pay nearly $800 million to make the bleeding stop. Had they not done so, Rupert would have likely been subject to questioning in court. Network executives would have been forced to pick between testifying that they had no idea that their own reporters had debunked the Trump campaign's false claims of election fraud or that they knew but allowed stars to give them credibility in front of millions of viewers.

The Murdochs have paid before. They agreed to settlements in excess of $900 million over allegations of fraud and anti-competitive practices against News Corp's lesser-known marketing business, News America; they paid hundreds of millions of dollars in a massive phone and email hacking scandal involving their British tabloids; and they paid roughly $200 million to ensure further details of allegations of widespread sexual harassment at Fox News were not aired in open court.

The network also paid the family of the slain Democratic party aide Seth Rich an undisclosed settlement worth millions of dollars just before Hannity and former Fox Business host Lou Dobbs were set to be questioned by the Riches' attorneys under oath.

Similarly, executives at the Walt Disney Co. and ABC breathed a sigh of relief after settling a case in 2017, in which ABC News had referred to a kind of processed beef as "pink slime." That's because the amount parent company Disney paid — $177 million — was a fraction of its possible $5.7 billion exposure under South Dakota law. ABC did not retract the story.

When it comes to defamation, says Jane Kirtley, a former executive director of The Reporters Committee for Freedom of the Press, there are two elements for media outlets in deciding to settle, one immediate and one grander.

Broadly speaking, she says, media organizations want to sidestep any chance for a judge or appellate court to revisit the very high standard of proving "actual malice," established in a landmark 1964 ruling in a case involving The New York Times. The law currently favors news organizations. Yet several U.S. Supreme Court Justices have expressed an interest in altering or reforming that standard.

"There's always a risk that mischief will be done," says Kirtley, a noted advocate for press rights. "If you can make the case go away, that's a win."

The more specific concern, Kirtley says, involves a calculation: Can Fox and the Murdochs stomach a continuing parade of mortifying revelations, even if they do not affect the ultimate outcome of the trial?

Airing baseless accusations after Biden beats Trump

On election night, Fox News's decision desk projected that Democratic presidential nominee Biden would win the pivotal state of Arizona. Trump and his advisers waged an intense effort to get the network to reverse the call. The network and the Murdochs stood by it.

Yet in ensuing days, viewers peeled away. Major Fox News stars such as Dobbs, Bartiromo and Jeanine Pirro embraced the claims that Dominion machines switched Trump votes to Biden and other far-fetched accounts of voting fraud. Along with Hannity and Carlson, they gave Trump allies the airtime to make similar claims.

Anchors such as Bret Baier and Martha MacCallum complained about the blowback from Trump's inner circle and their own viewers and asked whether such projections could take audience sentiment into account in the future.

Two senior political editors involved in the projection of Arizona — Washington Managing Editor Bill Sammon and political director Chris Stirewalt — were forced out at the urging of Rupert Murdoch. Fox called Sammon's departure a retirement and Stirewalt's part of a larger restructuring. Neither characterization was true.

Dobbs would be fired the day after a $2.7 billion defamation suit was filed against Fox by Smartmatic, another voting tech company falsely accused on Fox of participating in defrauding Trump of victory. (Smartmatic was only active in Los Angeles County during the 2020 elections, according to company officials and its lawsuit remains pending in federal court.) Fox said Dobbs' hasty exit was part of a post-election rejiggering.

Other journalists were laid off. And Fox News turned over two hours of evening programming that had been reserved for news shows — at 7 p.m. and 11 p.m. — to conservative talk show host Jesse Watters and conservative comedian Greg Gutfeld. Pirro was named a co-host of the top-rated weekday show "The Five" – a promotion from her weekend hosting slot. The two news shows were pushed to the outer fringe slots — MacCallum's news show to 3 p.m., Shannon Bream to midnight.

Fox personalities including Pirro and Mark Levin ginned up viewer anger ahead of the Jan. 6, 2021, rally headlined by Trump at the Washington Mall to protest the scheduled congressional certification of Biden's victory. When the U.S. Capitol was violently besieged that day by Trump's supporters, Fox responded shakily. Fox's Carlson claimed that the attack on Congress was harmless and also simultaneously arranged by Antifa and the FBI. There is no evidence on which to base such claims.

Winning back viewers alienated by Fox's election night Arizona call

The effect, as Dominion alleged in its suit, represented an intense effort to win back voters alienated by that original Arizona call for Biden. Each new phase of the case — from discovery to motions detailing some of the findings through depositions and a review of millions of documents to the cross-examination of witnesses in the trial portion — brought the potential for greater scrutiny of Fox and reputational damage.

Dominion attached a gaudy price tag to the damages it sought. But it might not have prevailed in court.

"In these high-stakes defamation suits," says Rutgers law professor Ronald Chen, an authority on media law, "very often litigation is not the way for either of them to get complete satisfaction."

"By law, there's a winner and a loser," Chen says. "And where there's a high risk for both the plaintiff and the defendant, settlement is very often the way both sides are both able to claim some type of victory."

Chen notes it is hard for plaintiffs suing news organizations to surpass the legal requirement of actual malice — that is, proving the news outlet either knew what it was broadcasting was false and harmful, or had grounds to know it and acted with "willful disregard" of the truth.

"Obviously if it were established, that would put any media organization's reputation in utter tatters," Chen adds.

A world grounded in cynicism and hostility

Even in settling and sidestepping an adverse verdict, Fox's reputation among its peers has already been shattered.

What Dominion uncovered in the investigative part of the suit — what's called discovery — revealed a world grounded in cynicism, hostility. From the top down, the Murdochs and Fox created a network defined by a relentless pursuit of ratings that placed profit above politics, and partisan advantage above any sense of journalistic obligation. The public's right to know the truth rarely earned a hearing.

Fox's chief media host and correspondent, Howard Kurtz, barely touched on the case. He finally told viewers he had been forbidden from covering it by his corporate bosses.

When Baier, Fox's chief political anchor, repeatedly pitched devoting an hour-long special to debunking myths of election fraud, executives effectively ignored him: Baier did not receive a firm response.

Anchor Shepard Smith left the network in 2019 after being attacked on the air by Carlson and receiving no public backing from Fox. Wallace left Fox in late 2021 after Carlson's lies about the Jan. 6 attack on the Capitol. Baier raised objections to Carlson's special programs championing the insurrectionists. But Baier protested quietly, in private. And he stuck around.

Fox is not just any media organization.

Were it to simply have apologized — as the smaller right-wing network Newsmax did after its personalities made similar claims about Dominion — Fox would have acknowledged its biggest stars had been wrong to present Trump's claims of election fraud — and that they, the viewers, had been wrong to believe them.

The Murdochs may have perceived it worth nearly any price to avoid such a public humiliation.