In blow to Fox Corp., judge rules Smartmatic case over 2020 election lies can proceed

By CNN Newsource

Published January 24, 2024 4:05 PM

By Marshall Cohen, CNN

(CNN) — The voting technology company Smartmatic can move forward with its defamation lawsuit against Fox Corporation, a New York judge ruled Wednesday, dealing a blow to the parent company of Fox News, which is already fighting the massive lawsuit over its repeated airing of 2020 election lies.

The decision from Manhattan Supreme Court Judge David Cohen represents a significant setback to Fox’s corporate leadership, including the powerful Murdoch family, who will now face more scrutiny in the litigation. Cohen already let the case proceed against Fox News — and on Wednesday, he rejected a request by Fox Corporation to throw out the claims against the parent company.

The lawsuit was filed in the wake of the 2020 election, when Fox repeatedly gave airtime to far-right figures who promoted outrageous and debunked claims that Smartmatic rigged the presidential election by flipping millions of votes from Donald Trump to Joe Biden. They did this even though on-air anchors, top producers and executives privately admitted that the election wasn’t stolen.

The judge said Smartmatic’s case was strong enough to proceed against the parent company because it has “sufficiently alleged that (Fox) Corp. employees acted with malice by purposely and deliberating publishing knowingly false stories about (Smartmatic) in order to benefit (Fox) Corp.’s financial interest.”

Smartmatic has “sufficiently alleged in their amended complaint that (Fox) Corp. employees played an affirmative role in the publication of the defamation at issue,” Cohen concluded.

The parent corporation had argued that it shouldn’t be involved in the defamation case because it only had general oversight of Fox News itself. Further, Fox Corp. argued there wasn’t proof that any corporate employees “directed” the allegedly defamatory statements to be aired.

Fox denies defaming anyone and claims that the lawsuit is an assault on the First Amendment.

“We will be ready to defend this case surrounding extremely newsworthy events when it goes to trial, likely in 2025,” a Fox spokesperson said in a statement after the ruling. “As a report prepared by our financial expert shows, Smartmatic’s damages claims are implausible, disconnected from reality, and on their face intended to chill First Amendment freedoms.”

Smartmatic sued Fox News and its parent corporation in 2021 for defamation and is seeking more than $2 billion in damages. A New York appeals court previously dismissed the case against Fox Corp. but gave Smartmatic a chance to refile the allegations with more evidence. Cohen said Wednesday that the refiled claims against Fox Corp. are sufficient enough to move forward.

“We look forward to proceeding and holding Fox Corporation, as well as Fox News, responsible for the damage they did to Smartmatic,” the company’s lead attorney Erik Connolly said.

The case is still in the discovery phase, with some major depositions taking place in the past month, including former Fox Corporation chairman Rupert Murdoch.

The decision boosts Smartmatic’s case against the right-wing media behemoth. A similar 2020-related lawsuit by Dominion Voting Systems was also allowed to proceed against Fox and its parent company. That case unearthed tranches of internal emails that described in devastating detail how top Fox officials cravenly allowed Trump allies like Rudy Giuliani and Sidney Powell to lie about the election on its shows.

Fox can also pursue counterclaims against Smartmatic

The judge also on Wednesday gave Fox News a greenlight to continue its counterclaims against Smartmatic. The right-wing network is alleging that Smartmatic’s massive $2.7 billion request for damages is a legally baseless attempt to silence the network’s free-speech rights.

Fox filed its counterclaims against Smartmatic last year, in a bid to push back against the company and recover the money it’s spending on high-priced attorneys to defend itself.

“(Fox’s) argument here is that (Smartmatic’s) alleged damages are so extenuated from their actual lost profits that they were pleaded and/or sought in order to chill (Fox’s) free speech rights. That argument has not yet been adjudicated in any court,” Cohen said, paving the way for Fox to continue its fight against the $2.7 billion figure.

Smartmatic had asked Cohen to dismiss the counterclaims, on the basis that of Fox’s arguments were already shut down in Dominion’s similar defamation case that the right-wing network settled last year, and that they shouldn’t be relitigated now.

In the Smartmatic case, Fox has previously argued that the Florida-based voting company couldn’t have lost billions of dollars due to the airing of election lies because it was already unprofitable and scandal-plagued before anyone accused the company of rigging votes against Trump.

“While the recovery of fees and costs will not undo all the damage this First Amendment-defying lawsuit has wrought, at least it may cause the next plaintiff to think twice before trying to penalize the press to the tune of billions of dollars in non-existent damages for ensuring that the people can hear perspectives from all sides of the most pressing controversies of the day,” Fox wrote in a filing last year.