clock menu more-arrow no yes mobile

Filed under:

Why the defamation lawsuits against Fox News could seriously hurt the company

Fox spread a dangerous lie about the 2020 election. Now the network could face expensive consequences.

Fox News Host Tucker Carlson Appears At National Review Ideas Summit
Fox News host Tucker Carlson discusses “Populism and the Right” during the National Review Institute’s Ideas Summit at the Mandarin Oriental Hotel March 29, 2019, in Washington, DC. 
Chip Somodevilla/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.

Not long after last November’s election, and before all the votes were even counted, a bizarre conspiracy theory started spreading in the Trumpiest regions of social media. This false conspiracy theory spread throughout conservative media, stoked by close Trump allies and even by the former president himself. And it was repeatedly touted on Fox News.

The theory alleged that Dominion Voting Services, a company that supplies hundreds of millions of dollars’ worth of voting machines and related services to more than two dozen states, was actually owned by a different company, Smartmatic, and that Smartmatic was formed in order to “fix elections” in Venezuela. As Trump’s early leads in several key states disappeared after more ballots were counted, the conspiracy theorists blamed Dominion, claiming that the company’s machines were somehow stealing votes from Trump and giving them to now-President Joe Biden.

None of this is true. Smartmatic does not own Dominion and, in fact, competes with Dominion for business. Neither company was formed to rig elections (although Smartmatic did supply voting machines for Venezuela’s 2004 election, independent audits determined that those machines were “very accurate”). And there’s no credible evidence that Dominion’s voting machines did anything other than accurately tally up the votes cast on those machines.

Indeed, after Dominion sued Sidney Powell, a lawyer close to Trump and a major popularizer of the conspiracy theory against Dominion, Powell’s lawyers argued that she should not be liable for defamation because the allegations against the voting machines company are so implausible that “reasonable people would not accept such statements as fact.”

But the outlandishness of the lies against Dominion did not stop Fox News from hosting guests that touted those lies — including Powell herself. It didn’t stop many of Fox’s hosts from spreading lies, either.

Fox’s decision to broadcast these lies could prove very expensive for the conservative media company. On Friday, Dominion filed a $1.6 billion defamation lawsuit against Fox, and this lawsuit mirrors a similar $2.7 billion case brought by Smartmatic. To put those numbers in perspective, the Fox Corporation is valued at about $23 billion. So the two voting companies are seeking nearly one-fifth of Fox’s total valuation.

Even if Fox loses these cases, it’s far from clear that it will be ordered to pay billions of dollars. But the recently filed complaint in US Dominion v. Fox News Network lays out an unusually strong defamation claim.

As the Supreme Court held in New York Times v. Sullivan (1964), when a defendant is accused of making false claims about a public figure regarding a matter of public concern, that defendant cannot be held liable unless they made that false statement “with knowledge that it was false or with reckless disregard of whether it was false or not.”

But Dominion’s lawyers lay out considerable evidence that some of Fox’s top executives, editors, and hosts knew that they were doing so but did it anyway. That’s the kind of behavior that can get a media company in deep trouble, even under the very strong First Amendment protections laid out in New York Times v. Sullivan.

Responding to the Dominion suit, Fox News Media issued this statement: “FOX News Media is proud of our 2020 election coverage, which stands in the highest tradition of American journalism, and will vigorously defend against this baseless lawsuit in court.” Fox has not had enough time to formally respond to Dominion’s legal complaint, so we don’t yet know for sure how it will defend itself against the evidence presented in the Dominion complaint. But in the lawsuit filed by Smartmatic, Fox made the bold argument that it should be permitted to broadcast allegations against that company because those allegations were “objectively newsworthy.”

The Smartmatic case, however, was filed in New York state courts, and Fox’s lawyers rely heavily on decisions by New York courts in laying out their argument. The Dominion case was filed in Delaware.

This case against Fox is only one part of a larger litigation strategy seeking to clear Dominion’s name — or, at the very least, secure compensation for the damage many Trump supporters have done to Dominion’s reputation. The company has also sued Powell, Trump lawyer Rudy Giuliani, and MyPillow CEO Mike Lindell, another popularizer of the conspiracy theory. And it’s warned other conservative news outlets, including Newsmax and One America News, that additional suits may be coming.

The allegations against Fox

The complaint in the Dominion lawsuit is 137 pages long, and a significant portion is devoted to quotes from Fox personalities and regular guests who touted the conspiracy theory against Dominion.

On November 8, for example, shortly after Joe Biden was declared the winner of the 2020 election, Fox host Maria Bartiromo interviewed Sidney Powell.

“Sidney, we talked about the Dominion software. I know that there were voting irregularities,” Bartiromo said to Powell. Powell then claimed that Dominion’s software was “flipping votes in the computer system, or adding votes that did not exist.”

Similarly, in a November 16 appearance with then-Fox Business host Lou Dobbs, Republican National Committee Chair Ronna McDaniel falsely claimed that “we had a situation in Michigan where one county had a 6,000-vote flip from Biden to Trump because of this Dominion voting machine.”

In a third segment — and, again, Fox featured many segments that promoted false or unproven statements about Dominion; I’m just going to describe three of them here for the sake of brevity — Fox host Jeanine Pirro touted a claim, which she attributed to “the president’s lawyers,” that Dominion is an “organized criminal enterprise” that was “started in Venezuela with Cuban money” and that it uses software that “is capable of flipping votes.”

Under New York Times v. Sullivan, the mere fact that Fox hosts and guests made these and similar statements is not enough for Dominion to prevail in its suit. Again, to overcome the bar to defamation suits laid out in that case, Dominion needs to show that Fox made a false claim “with knowledge that it was false or with reckless disregard of whether it was false or not.”

But that brings us to the other half of Dominion’s case against Fox.

Dominion’s complaint lays out numerous times when it contacted Fox News to inform them that the network was not telling the truth. Dominion claims that it “had a direct conversation with Fox News President and Executive Editor Jay Wallace during which Dominion detailed Fox’s defamatory falsehoods about Dominion and explained how and why they are false.” It also points to several “SETTING THE RECORD STRAIGHT” emails that it sent to Fox employees, and to two letters to Fox that formally demanded the network retract its statements.

Fox, moreover, did not simply need to take Dominion’s word. High-ranking government officials, including then-Attorney General Bill Barr and then-Director of the Cybersecurity and Infrastructure Security Agency Chris Krebs, made public statements that, in Barr’s words, there’s no evidence of “fraud on a scale that could have effected a different outcome in the election” — though these statements spoke generally about the absence of fraud in the 2020 election and not specifically about Dominion.

And key figures within Fox appeared to be perfectly aware that there was no significant fraud in the election. One reason the claims against Dominion took hold is that many Trump voters saw Trump’s early leads in several states evaporate as additional ballots were counted. But Arnon Mishkin, director of Fox’s decision desk, warned months before the election that “on election night, we may be looking at states where it seems that President Trump is in the lead, but there’s still 20 or 30 percent of the vote outstanding.”

Mishkin (along with many election observers) understood that Biden voters were more likely to vote by mail than Trump voters, and, in many states, mailed ballots would be counted after in-person ballots.

Similarly, the Dominion complaint points to several instances where Fox hosts correctly stated that allegations of voter fraud in 2020 are false or overblown. In a November 19 column adapted from one of his show’s opening monologues, for example, Fox host Tucker Carlson wrote that Powell has “never demonstrated that a single actual vote was moved illegitimately by software from one candidate to another. Not one.”

In fairness, the fact that at least some Fox personalities contradicted the lies about Dominion could potentially reduce the amount of damages that Dominion is able to collect from Fox, because true statements will tend to reduce the impact of the lies. But true statements such as Carlson’s also suggest that Fox knew the allegations against Dominion are false.

It appears, in other words, that Fox didn’t simply behave recklessly when it spread lies about voting machines rigging the election for Biden. Rather, key figures within Fox were perfectly aware that these claims are lies. And yet the network touted them anyway.

How much could this wind up costing Fox?

The general rule is that a defendant who commits defamation is liable for any financial damages caused by a defamatory statement. If your uncle is about to give you a $5,000 gift, but then your brother tells him a lie that so enrages the uncle that he cancels the gift, then your brother would owe you $5,000 in a defamation suit.

Dominion points to some relatively small expenses that it’s incurred due to the conspiracy theories against it. It says that it “spent more than $600,000 on private security for the protection of its people” after its employees started receiving death threats. It also claims that it’s spent about $700,000 on a PR campaign “to mitigate the harm to its business.”

The biggest issue, however, is that Dominion could lose valuable contracts — either because Republican state officials will believe the lies about the company and refuse to do business with them, or because state officials who do not believe the lies will nonetheless choose not to do business with Dominion for fear of triggering a backlash among voters who do believe the conspiracy theories.

Dominion says that its contracts with state and local governments “are typically multi-year contracts and range from tens of thousands of dollars to over a hundred million dollars,” and it claims that it’s already losing business because of the smear campaign against it. An Ohio county commission, for example, voted to reject a $6.45 million contract with Dominion.

Overall, Dominion’s “current projections show lost profits of over $600 million over the next eight years”; the company also claims that “the viral disinformation campaign has irreparably damaged Dominion and destroyed the enterprise value of a business that was worth potentially more than $1 billion.”

It remains to be seen whether these catastrophic losses actually play out, but Dominion’s suggestion that the smear campaign against it could have ruined the company is, at the very least, plausible. Even fully rational election officials, who are completely aware that the lies about Dominion are in fact lies, may be reluctant to deal with the legions of Republican voters who could rise up in anger if a state or local government signs a contract with Dominion.

So Fox, in other words, could be in for a world of hurt.