That has left many observers puzzled as to why Murdoch hasn’t settled his highest-stakes legal battle to date: a $1.6 billion defamation lawsuit alleging false claims that an election technology company rigged the 2020 presidential election.
In fact, there have been at least some attempts in that direction.
Late last year, attorneys from Dominion Voting Systems sat down with attorneys from Fox News to try to reconcile their clients’ differences. The meeting was ordered by a Delaware court in a last-ditch effort to avoid a long and costly trial, scheduled to begin in April.
Talks broke down almost immediately, with both sides scoffing at the other’s position and quickly walking away, according to three people familiar with the conversation who spoke on condition of anonymity to discuss a sensitive meeting.
But with a trial approaching, that may not be the end of the story. Legal experts say it’s still possible the two sides could strike a deal that could reduce Fox’s potential losses — and avoid weeks of embarrassing testimonials about Fox and its celebrity personalities. Damaging details have already emerged in court documents, showing Fox executives knew the on-air vote-rigging allegations were false, but feared they would lose conservative viewers if they contradicted them.
“For Fox, there are real risks associated with the process,” said Timothy Zick, a First Amendment scholar at William & Mary Law School. But Dominion, when considering a settlement, would have to decide whether to accept less money “or fight on, on principle, and more fully restore her reputation.”
It is unusual for a defamation suit to go to court. Judges, who protect journalists’ First Amendment rights, flatly reject many claims. Media companies are often willing to settle claims that survive early legal hurdles to avoid a jury trial. And plaintiffs are often open to compromise on the dollar amount they believe is owed to them.
However, a storm of competitive dynamics seems to have brought this blockbuster case to the brink of a courtroom confrontation. On the one hand is Dominion’s insistence that Fox-fueled conspiracy theories have all but destroyed its future business prospects – hence the 10-figure demand. On the other hand, there is Fox’s internal belief that Dominion’s private equity backers are trying to bypass the network for their own financial gain.
Fox has called its First Amendment rights and its newsgathering mission to defend itself against Dominion’s accusations. While Dominion claims Fox unfairly smeared it by allowing Donald Trump’s allies to make unfounded claims of election fraud, Fox says it was merely covering the newsworthy actions of a sitting president.
“There will be a lot of noise and confusion from Dominion,” Fox representatives said in a statement, “…but the core of this matter remains about freedom of the press and freedom of speech, which are fundamental rights granted by the Constitution .”
But companies, and their corporate bosses, sometimes have emotional reasons to decide whether to take on or resolve a legal challenge as well.
Some current and former Fox employees, who spoke on condition of anonymity to discuss sensitive internal conversations, say the company’s initial inclination to fight the Dominion lawsuit was forged in part in response to all the settlements Fox News and other companies controlled by Murdoch. over the past decade, particularly in cases where the network’s late co-founder Roger Ailes and former primetime star Bill O’Reilly were charged with sexual harassment.
One executive described the belief within the network that detractors were beginning to view Fox News as easy prey, willing to dole out settlements to ease PR headaches.
As with most court cases, money also seems to be a major bone of contention.
In public statements, Fox representatives have expressed outrage at Dominion’s claim of $1.6 billion in damages, calling it “grossly disproportionate” and noting that the company’s main investor, private equity firm Staple Street Capital, has invested only $ paid 38.3 million to acquire 76 percent of Dominion. in 2018.
For its part, Dominion says it was a “valuable, fast-growing company” until Fox began “endorsing baseless lies,” costing it millions in legal, public relations and security costs and losing valuable government contracts. Dominion discussed trying to change the name to escape the bad publicity, but decided it wouldn’t work.
Another sticking point for a potential settlement: Dominion officials would like to demand that Fox make a full apology — probably on-air and probably more than once — according to two people familiar with the company’s thinking.
Fox’s legal strategy is led by Viet Dinh, Fox Corp.’s senior legal officer. and a close ally of the Murdoch family. He believes – which he has laid out in detail to both Rupert and his son Lachlan, executive chairman and CEO of Fox Corp. — that while Dominion may have scored points in the court of public opinion, Fox may ultimately prevail.
Last year, the New York Times also chose to challenge a high-profile defamation claim in court rather than settle. The Times won in that case after convincing both a judge and a jury that an editorial containing false information about Sarah Palin had not been published with “genuine malice” – the high standard required to prove libel.
But the Times case, which involved a single article that was quickly corrected, was much simpler than the Fox case, which involved many statements by Trump allies and Fox hosts over several weeks of broadcasts.
Meanwhile, media attorneys have viewed Gawker Media’s experience before a jury as a cautionary tale. The gossip blog went to court in 2016 after professional wrestler Hulk Hogan accused it of invading privacy by publishing a sex tape involving him. Gawker lost – and the $140 million verdict led the company to bankruptcy.
More recently, The Washington Post, CNN and NBC settled lawsuits with the family of a Kentucky teenager alleging that coverage of his 2019 encounter with a Native American protester at the Lincoln Memorial was defamatory. Yet a judge last year rejected similar claims by the family against the New York Times, Gannett, ABC, CBS and Rolling Stone.
In another high-profile case, ABC News went to court to challenge a lawsuit from a meat producer who charged it with libel for asking safety questions about a beef product known as “pink slime” — but decided after three weeks of testimony to settle. Parent company Disney later announced that it had paid $177 million, an amount not including the insurers’ share, to make the case disappear.
A pre-trial settlement — especially one that allows a defendant to walk away without admitting guilt or default — would be typical of Murdoch, whose cumulative settlements over the past 13 years now approach three-quarters of a billion dollars. (The most expensive was a $500 million payout to a Michigan company that alleged employees of the Murdoch-run News Corp. broke into its computers to steal trade secrets in supermarket coupon trading.)
Nancy Erika Smith, the attorney who represented former Fox host Gretchen Carlson in her sexual harassment lawsuit against Ailes, said a trial in the Dominion case would be a “lose-lose proposition” for Murdoch and Fox — a risky gamble that would could be their best way to avoid a big payout, but also a scenario where they could alienate the many MAGA fans in the audience by publicly acknowledging that Trump’s claims of stolen elections were lies.
Despite all the revelations the Dominion lawsuit has already sparked — stories of power struggles, tension and gossip on Fox News, as well as private messages in which network staff criticized Trump, their peers and their own audiences — Zick said “there is a real risk of further ‘damage inflict on the brand “during the process,” when more such details could emerge in a process that will be widely discussed.
Fox could also be motivated to sidestep the spectacle of 92-year-old Murdoch taking the stand or to avoid a jury composed of Delaware residents, about 60 percent of whom voted for native son Joe Biden. (Like many other companies, Dominion was incorporated in Delaware, where corporate tax loopholes are favorable.)
Still, any calculations on a settlement with Dominion may be complicated by the fact that Fox is still facing a second defamation lawsuit from another voice technology company, Smartmatic, seeking $2.7 billion in damages. Smartmatic’s claims are similar to Dominion’s.
If the two sides reconsider their current stance on a settlement, it will almost certainly not happen until Judge Eric M. Davis rules on both sides’ motions for summary judgment in the coming days.
If, as expected, he rejects Fox’s latest offer to have the case dropped out of court, or if he narrows the case down to the point where Dominion’s claim shrinks to a massive punitive damages claim, that could push both sides back to the negotiating table . said experts.
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