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The $1.3 billion lawsuit that could bring down Rudy Giuliani, explained

Giuliani is accused of lying about a once-obscure voting machine company — and he’s not the only one in hot water.

Trump lawyer and conspiracy theorist Rudy Giuliani speaks during an appearance before the Michigan House Oversight Committee on December 2, 2020, in Lansing.
Rey Del Rio/Getty Images
Ian Millhiser is a senior correspondent at Vox, where he focuses on the Supreme Court, the Constitution, and the decline of liberal democracy in the United States. He received a JD from Duke University and is the author of two books on the Supreme Court.

The 107-page legal complaint in US Dominion v. Giuliani, a defamation lawsuit filed in federal court on Monday, is really an extraordinary read.

It lays out how Rudy Giuliani, the former New York mayor turned Trump consigliere, allegedly spread a “Big Lie” to an audience of millions, potentially endangering hundreds of millions of dollars’ worth of government contracts sought by the voting machine company Dominion Voting Services in the process. Unsubstantiated smears against Dominion began to spread in the Trumpiest corners of social media while votes were still being counted in the 2020 election. Before long, accusations that Dominion was involved in a scheme to hand the election to Joe Biden were picked up by right-wing media, by Trump-aligned lawyers such as Giuliani and Sidney Powell, and even by Donald Trump himself.

None of it was true — and now Dominion is launching its own legal counterattack.

The heart of what Dominion’s lawyers call the “Big Lie,” as detailed by the suit, is a baroque conspiracy theory involving Dominion, a dead Venezuelan dictator, a Hungarian-born billionaire, a prominent member of the British nobility, and the Republican governors of Georgia and Arizona — among several other players — to rig the 2020 election. Along the way, the suit claims, Giuliani and other Trump allies relied on a former head of security for an alleged South American drug kingpin, a crank who claims that the Muslim Brotherhood colluded with a prepubescent George Soros to form a Nazi “deep state” in 1930s Germany, and the CEO of MyPillow to build their case against Dominion.

The full contours of this anti-Dominion conspiracy theory are so complex and frequently shifting that they are difficult to summarize concisely. Yet, as Giuliani told Fox Business host Lou Dobbs last November, the crux of it is that Dominion’s parent company was formed by close allies of the late Venezuelan dictator Hugo Chávez “in order to fix elections” — and that Dominion voting machines somehow flipped enough votes in the 2020 election to hand an election that Trump won to Biden.

In reality, Dominion was founded in Canada, and it originally sought to build voting machines that would make it easier for blind people to vote. The company took its name from a Canadian law, the Dominion Elections Act of 1920, which expanded women’s right to vote and provided for greater federal oversight of Canadian elections. And there’s no evidence that the election was rigged — the claim has been debunked by figures such as former Trump administration cybersecurity director Christopher Krebs and former Trump Attorney General Bill Barr.

Yet if you want a sign of just how baseless these conspiracy theories are, even many of the most unabashedly Trumpy outlets backed away from their attacks on Dominion after the company’s lawyers started targeting major promoters of the anti-Dominion smear. The right-wing website the American Thinker published a humiliating statement admitting that several of its pieces attacking Dominion “rely on discredited sources who have peddled debunked theories.” One America News, a pro-Trump cable station known for tacking to the right of Fox News, quietly deleted several stories about Dominion from its website.

The Giuliani lawsuit, meanwhile, seeks $1.3 billion in damages from Trump’s lawyer. The company filed a similar suit against Sidney Powell, another lawyer who worked on Trump’s post-election push to overturn the election’s results (although Powell’s work eventually became so embarrassing to the Trump campaign that it publicly disavowed her).

Defamation lawsuits are typically very difficult to win. And few clients win the kind of eye-popping damages that Dominion seeks from some of its most prominent antagonists. But there is strong evidence that many of Dominion’s antagonists knew they were spreading lies, and the amount of money at stake if Dominion’s reputation is destroyed by those lies is simply enormous.

People like Giuliani, in other words, could potentially be in for a world of financial pain.

Defamation law in the United States, briefly explained

The First Amendment places fairly strict limits on defamation lawsuits, and for very good reason.

In 1960, civil rights activists allied with Martin Luther King Jr. purchased a full-page advertisement in the New York Times, alleging that Alabama police used brutal tactics to suppress student-led protests. Unfortunately, the ad contained some factual errors. Among other things, it misidentified the song that protesters sang at a particular demonstration, and it accused police of arresting King seven times, when he’d actually only been arrested four times.

An Alabama police official sued for defamation in state court, and he won a $500,000 verdict against the New York Times for publishing the pro-civil rights ad. Had that verdict stood, it would have had a tremendous chilling effort on journalism of all kinds, because a newspaper that printed even minor factual mistakes potentially could have been hit with a debilitating lawsuit.

But the verdict did not stand. In New York Times v. Sullivan (1964), the Supreme Court held that, at least when someone speaks about a public figure regarding a matter of public concern, they cannot be liable for making false statements unless such a statement was made “with knowledge that it was false or with reckless disregard of whether it was false or not.”

As the New York Times case recognized, defamation law can be a powerful weapon in the arsenal of authoritarianism — whether that authoritarianism comes from Jim Crow police officials, or from former President Trump, who called for stronger libel laws so that he could sue newspapers that criticized him.

But there’s also a trade-off implicit in New York Times. The Court’s decision makes it much harder for figures like Trump to intimidate critics with threats of litigation, but it also means that many victims of damaging lies may be unable to prevail in court because they can’t prove that those lies were made with “reckless disregard” for whether they are true.

It’s worth noting that some defamation plaintiffs face fewer obstacles than others. New York Times’s strict protections against malicious defamation suits apply only when the plaintiff is a public figure. When someone without a significant public profile claims defamation, they can sometimes prevail by simply showing that the person who defamed them acted negligently.

Dominion Voting Systems wasn’t exactly a famous company before it unwittingly became the subject of a grand conspiracy theory, so its lawyers might argue that New York Times’s heightened protections should not apply to this suit.

That said, in at least some of its legal filings, Dominion appears to be proceeding as if it will have to overcome New York Times’s high bar to defamation suits. In the Giuliani case, for example, it argues that the Trump lawyer made false claims “with actual malice, knowing or recklessly disregarding that they are false.”

Dominion appears to have an unusually strong defamation case, even under the New York Times standard

Dominion’s complaint in the Giuliani case opens with a particularly damning fact. While Giuliani touted the conspiracy theory against Dominion in many venues, “he was unwilling to make false election fraud claims about Dominion and its voting machines in a court of law.” Indeed, in one particularly high-profile lawsuit, Giuliani told a court specifically that the Trump campaign “doesn’t plead fraud” against anyone involved in the 2020 election in Pennsylvania — a sign, as many observers noted at the time, that the campaign’s attacks on the election results weren’t on the level.

It’s likely that Giuliani explicitly disclaimed any allegations of fraud because he knew that doing so would trigger legal obligations he could not meet. Under the Federal Rules of Civil Procedure, a party alleging fraud “must state with particularity the circumstances constituting fraud.” Thus, if Giuliani wished to raise a legal claim that Dominion was engaged in election fraud, he would have needed to offer a fair amount of detail about how, exactly, that fraud occurred.

Yet while Giuliani’s behavior in court suggests that he knew he didn’t have sufficient evidence to prove his case against Dominion (or to prove any other allegation of election fraud), he and many other Trump loyalists behaved quite brazenly when speaking to the press, on their own podcasts, or when speaking at Trump rallies. The Giuliani complaint lists more than 50 examples of Giuliani making implausible claims about Dominion, such as a false statement that “the company counting the votes for the nice people in Michigan are owned by friends of one of the greatest enemies of the United States.”

Many of the key elements of the Dominion conspiracy theory are implausible on their face, such as Powell’s claim at a November press conference that Dominion Voting Systems was “created in Venezuela at the direction of Hugo Chavez to make sure he never lost an election.” Other elements of the conspiracy theory — such as Powell’s claim that Mark Malloch-Brown, a British baron with close ties to billionaire George Soros, was one of the “leaders of the Dominion project” — confuse Dominion with one of its competitors.

Malloch-Brown was the chair of a company called Smartmatic, which competes with Dominion to provide voting machines to various jurisdictions. Yet many proponents of the Dominion conspiracy theory falsely claim that Smartmatic owns Dominion, and that Smartmatic was, in Giuliani’s words, created “in order to fix elections” by “three Venezuelans who were very close to ... the dictator Chávez of Venezuela.”

Smartmatic, which was started by Venezuelan entrepreneurs based in Florida, did provide voting machines in Venezuela’s 2004 election. Independent audits by the Carter Center, an organization formed by former President Jimmy Carter that frequently monitors foreign elections, and the Organization of American States, however, determined that the machines used in that election were “very accurate.”

A slightly different variant on the Dominion conspiracy theory rests on a highly redacted statement by an unidentified person claiming to be a former member of the “national security guard detail of the President of Venezuela,” which Powell submitted in a Michigan lawsuit. The author of that statement claims that he “was a direct witness to the creation and operation of an electronic voting system in a conspiracy between a company known as Smartmatic and the leaders of conspiracy with the Venezuelan government,” and that Smartmatic’s election software is “in the DNA of every vote tabulating company’s software and system,” including Dominion.

Though the redacted statement does not identify its author, an Associated Press report says that the statement’s author matches “the description of a former Chavez bodyguard,” Capt. Leamsy Salazar. Salazar defected to the United States after he reportedly worked as a bodyguard for a senior Venezuelan official accused of smuggling cocaine.

If anything, Salazar (or whoever authored the redacted statement) is a relatively credible witness when compared to some of the other players that people like Giuliani and Powell rely on to support the Dominion conspiracy theory.

According to Dominion’s lawyers, for example, Giuliani once cited an analysis by MyPillow CEO Mike Lindell, which allegedly showed that voting “machines were rigged to create a result.” Giuliani also allegedly relied on analysis by Russell Ramsland, a former Republican congressional candidate who warned of a “deep state” that, as Vice’s John Savage summarized Ramsland’s theory, was “formed when the Muslim Brotherhood, Prescott Bush (the banker and father of former President George H.W. Bush), leftists, and George Soros came together in Nazi Germany in the 1930s.”

All of which is a long way of saying that Dominion appears to have a strong chance of proving that it was the victim of a lie that was told “with knowledge that it was false or with reckless disregard of whether it was false or not.”

A simply absurd sum is at stake in the Dominion defamation suits

As a general rule, someone who commits defamation is liable for any actual financial damages caused by the defamatory statement. Suppose, for example, that my uncle plans to give me a $10,000 gift. Now suppose that my brother knowingly tells a lie about me to my uncle that so enrages him that he cancels the gift. In this situation, my brother’s lie would have cost me $10,000, so I would be able to collect that amount of money from him in a defamation suit.

The smears against Dominion, meanwhile, plausibly may cost that company an astonishing amount of money. According to Dominion’s complaint, the company’s contracts with state and local governments “range from tens of thousands of dollars to over a hundred million dollars.” Georgia’s contract with Dominion, for example, is worth $106 million.

Due to false statements from people like Trump, Giuliani, and Powell, the idea that Dominion voting machines are unreliable or worse was widespread in conservative media. GOP officials may attempt to cancel existing contracts with the company, and they are even more likely to deny contracts to Dominion in the future. Meanwhile, state and local election officials who know the attacks on Dominion to be false may also be reluctant to contract with Dominion, for fear of triggering a backlash from voters who believe the false claims against the company.

It is too soon to know exactly how much business Dominion will lose because of the conspiracy theories targeting it, so there’s no way to say right now how much money Dominion should be able to collect from the people who popularized that conspiracy theory. But when all the damage is done, the total amount could be simply enormous. In the Giuliani suit, Dominion seeks $651,735,000 in compensatory damages, plus an additional $651,735,000 in punitive damages. (Punitive damages are sometimes awarded when a defendant is found to have engaged in willful misconduct, in order to deter that defendant from acting the same way in the future.)

The Dominion lawsuits, in other words, could wind up being one of the primary vehicles for accountability against Trump collaborators who have thus far evaded consequences for aiding and abetting Trump’s efforts to overturn the 2020 election. At least some of those collaborators could wind up having to turn over huge sums to Dominion.