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A New York appellate court declined to toss Fox Corp. from Smartmatic‘s $2.7 billion defamation case.
Smartmatic sued Fox News and Fox Corp. following the 2020 presidential election, claiming that on-air personalities and guests amplified false claims that it was involved in rigging the ballots.
In a decision issued today, the appellate judges ruled that Smartmatic had met the threshold for moving forward with its claims that Fox Corp. should also be defendants in the lawsuit, not just the news network.
Read the Fox Smartmatic decision.
The judges wrote that they “find that the allegations in the first amended complaint relating to Fox Corporation directing the other defendants to undertake a disinformation campaign in the post-election coverage, along with the allegations of Fox Corporation’s active participation in Fox News Network’s daily operations in connection with that coverage, sufficiently allege Fox Corporation’s ‘direct liability’ for the challenged defamatory statements, as well as satisfy the applicable pleading requirements for alleging actual malice.”
The appeals court had previously dismissed Fox Corp. from the case, but allowed Smartmatic to file an amended complaint.
In 2023, Fox settled a similar lawsuit filed by another election systems company, Dominion Voting Systems, for $787.5 million. Before the settlement, Fox had sought to exclude Rupert Murdoch from testifying in person at a trial, but the Delaware judge rejected that request.
The latest ruling does not mean that Smartmatic has proven its case, just that it has presented sufficient claims to proceed. A trial has been expected to start this year, but the litigation is still in discovery phase.
The judges wrote that Smartmatic had not presented a viable claim for “vicarious liability” on the part of Fox Corp. That is the legal concept that a corporation can be held responsible for the actions of a subsidiary. The judges wrote, “Contrary to plaintiffs’ assertions, its allegations that Fox Corporation wholly dominated Fox News over a single, specific transaction (i.e., a defamatory campaign), cannot, on their own, furnish a proper basis for vicarious liability.”
Fox contends that its coverage of the 2020 election aftermath is protected by the First Amendment. It also has challenged Smartmatic’s damages claim.
“We will be ready to defend this case surrounding extremely newsworthy events when it goes to trial,” Fox said in a statement. “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.”
