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  • Writer's pictureThe San Juan Daily Star

A $787.5 million settlement and embarrassing disclosures: The costs of airing a lie

The News Corp. building, which houses the headquarters of Fox News, in midtown Manhattan, on April 1, 2023. Fox News’s late-stage agreement with Dominion Voting Systems came with a rare acknowledgment of broadcasting false claims by the conservative media powerhouse.

By Jim Rutenberg and Katie Robertson

In settling with Dominion Voting Systems, Fox News has avoided an excruciating, drawn-out trial in which its founding chief, Rupert Murdoch, its top managers and its biggest stars would have had to face hostile grilling on an embarrassing question: Why did they allow a virulent and defamatory conspiracy theory about the 2020 election to spread across the network when so many of them knew it to be false?

But the $787.5 million settlement agreement — among the largest defamation settlements in history — and Fox’s courthouse statement recognizing that the court had found “certain claims about Dominion” aired on its programming “to be false” — at the very least amount to a rare, high-profile acknowledgment of informational wrongdoing by a powerhouse in conservative media and America’s most popular cable network.

“Money is accountability,” Stephen Shackelford, a Dominion lawyer, said outside the courthouse, “and we got that today from Fox.”

The terms of the agreement, which was abruptly announced just before lawyers were expected to make opening statements, did not require Fox to apologize for any wrongdoing in its own programming — a point that Dominion was said to have been pressing for.

Shortly after the agreement was reached, Fox said it was “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.”

The settlement carries an implicit plea of “no contest” to several pretrial findings from the presiding judge in the case, Eric M. Davis, that cast Fox’s programming in exceptionally harsh light.

In one of those findings, the judge sided with Dominion in its assertion that Fox could not claim that its airing of the conspiracy theory — generally relating to the false claim that its machines “switched” Trump votes into Biden votes — fell under a legally protected status of “news gathering” that can shield news organizations when facts are disputed. The judge wrote, “the evidence does not support that FNN conducted good-faith, disinterested reporting.”

In another finding, the judge wrote that the “evidence developed in this civil proceeding demonstrates that is CRYSTAL clear that none of the statements relating to Dominion about the 2020 election are true.”

Through those findings, the judge seriously limited Fox’s ability to argue that it was acting as a news network pursuing the claims of a newsmaker, in this case, the president of the United States, who was the lead clarion for the false Dominion narrative.

In those heady days before the first day of trial, Fox had been indicating that if it were to lose at trial, it would work up an appeal that would, at least partly, argue with those judicial rulings. Now they stand undisputed.

By the end of the day Tuesday, it was clear that Fox’s lawyers were engaged in an urgent calculus to take the financial hit rather than risk losing at trial.

As so many legal experts before the trial had argued, Dominion had managed to collect an unusual amount of internal documentation from Fox showing that many inside the company knew the Dominion election conspiracy theory was pure fantasy. That extended to the network’s highest ranks — right up to Murdoch himself.

That evidence appeared to bring Dominion close to the legal threshold in defamation cases known as “actual malice” — established when defamatory statements are “made with knowledge of its falsity or with reckless disregard of whether it was true or not.” (That bar, however, is not always easy to meet, and there are no guarantees in front of a jury.)

“Dominion Voting had elicited much critical evidence that Fox had acted with actual malice or reckless disregard for the truth, which it could have proved to a jury, so the only question remaining would have been damages,” said Carl Tobias, a law professor at the University of Richmond. “Trial of the case also might have undermined the reputation of Fox when the evidence was presented in open court.”

It was less surprising that Fox settled than that it did so at such a late stage Tuesday. A trial would have seen Fox News personnel and Murdoch parrying with lawyers over the knowledge of falsity they held and why they did not take any action to stop it. The answers would have further unmasked the internal modus operandi of an organization that has long guarded its internal operations.

The one question that only time will answer is whether the settlement was enough to cause Fox News to change the way it handles such incendiary and defamatory conspiracy content. The amount is huge — $787.5 million. Fox News certainly doesn’t want to see a similar settlement anytime soon as other legal cases loom, notably a $2.7 billion suit from another election technology company, Smartmatic.

But Fox did manage to escape Dominion’s goal of an on-air admission or apology, meaning it did not have to force either on its audience, which did not hear much about the case on Fox’s shows to begin with.

“It’s hard to say how damaging a decision against Fox would have been for the company beyond the financial cost of the verdict because their audience is very loyal and bought into the polarized perspective their opinion hosts present,” Michelle Simpson Tuegel, a trial lawyer, said in a statement. “But the reputational harm of having executives, including Chairman Rupert Murdoch, and hosts take the stand seems to have moved the parties towards a resolution.”

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