Fox resolves Dominion case, but $2.7 billion Smartmatic lawsuit looms

Fox News on Tuesday disposed of one legal threat with its $787.5 million defamation settlement with Dominion Voting Systems, but the network still faces a $2.7 billion lawsuit from another voting technology company, Smartmatic USA, over its coverage of debunked election-rigging claims.

Dominion accused Fox and its parent company Fox Corp of ruining its business by airing claims that its machines were used to rig the 2020 U.S. presidential election in favor of Democrat Joe Biden and against then-president Donald Trump, a Republican.

Fox and its parent company Fox Corp averted a six-week trial in Delaware Superior Court with the deal, which is half of the $1.6 billion Dominion sought but still by far the largest ever defamation settlement publicly announced by an American media company, according to legal experts.

Fox, one of the most influential cable networks in the world and home to many conservative commentators, acknowledged in a statement Tuesday that the judge found "certain claims about Dominion to be false" and said it hopes the deal helps the country "move forward with these issues."

But Fox's lawyers will stay busy navigating the legal fallout of the network's 2020 election coverage with a potentially far more damaging defamation lawsuit by voting technology company Smartmatic, as well as a separate but related lawsuit by a recently fired producer.

Fox representatives referred Reuters to prior statements on the cases. The network has firmly denied the allegations in both cases.

It is unclear if Fox's deal with Dominion indicates it is willing to settle with Smartmatic, but experts who are not part of the litigation suggested it could help kickstart talks.

"Smartmatic now has a bargaining chip, and Fox has shown it is willing to take out its checkbook and write a big check," said University of Tennessee, Knoxville media law professor Stuart Brotman. "From Fox's standpoint, now that they realize they can get a successful settlement, they have a basis for a real discussion with Smartmatic."

Smartmatic is seeking $2.7 billion in damages from Fox and five individuals, including former Trump lawyers and hosts.

Smartmatic alleges in its lawsuit in New York County Supreme Court that the defendants knowingly spread false claims that its software was used to flip votes. Conspiracy theorists erroneously claimed Smartmatic owned Dominion, and the companies mounted similar allegations in their lawsuits.

Smartmatic attorney J. Erik Connolly said in a statement Tuesday the company is committed to clearing its name, recouping the damage done to it and "holding Fox accountable for undermining democracy."

Fox denies the allegations, saying in a recent statement the network had a right to report on highly newsworthy allegations of voter fraud. It has also called Smartmatic's damages claims "outrageous, unsupported, and not rooted in sound financial analysis."

Fox was recently dealt a setback in the case after an appeals court declined to toss it, finding Smartmatic alleged in "detailed fashion" how Fox "effectively endorsed and participated" in defamation.

Meanwhile, Fox has given no public indication that it is interested in settling the lawsuit by the former producer, Abby Grossberg, whose lawyers said in a statement Tuesday they are seeking "meaningful institutional changes at Fox News."

Any such changes were absent from the public announcement of the Dominion settlement and could potentially be a major sticking point in any negotiations, legal experts said.

Grossberg alleges she was exposed to sexism at Fox and unjustly fired after she objected to what she claims were efforts to pressure her into giving misleading testimony in the Dominion case.

Fox has said the allegations are "baseless" and were immediately investigated by outside lawyers. The network also says it will "vigorously" defend itself against all of Grossberg's claims.