Fox News Settles With Dominion Voting Systems, But Suffers Significant Reputational Damage

Not surprisingly, Fox News decided to settle the $1.6 billion defamation lawsuit filed by Dominion Voting Systems on Tuesday for almost $800 million. Although the payment will be less than half of what Dominion had sued for, it could be seen as a win-win for both sides.

The case showed very little potential for settlement until recently when both parties engaged mediator Jerry Roscoe from JAMS. He was on vacation but stopped to work on the case and brought forth a resolution in just a day which was acceptable to both sides.

Mr. Roscoe is a seasoned arbitrator and mediator, a former litigator with over 30 years of of experience involving multimillion dollar arbitrations.

Dominion Voting Systems first sued Fox in 2021 over its 2020 election coverage, claiming Fox News amplified election lies pushed by former president Donald Trump and his supporters and knowingly aired false claims about Dominion Voting System’s software being manipulated to change the results of the 2020 Presidential election.

From the view of Fox News, there had already been tons of emails, text messages and other communications between anchors, producers and management at the company which were publicly disclosed during the lawsuit that were extremely damaging to Fox News.

Having to put up witnesses like Rupert Murdoch, Lachlan Murdoch, Suzanne Scott, Tucker Carlson, Sean Hannity, Maria Bartaromo, Laura Ingraham, Jeanine Pirro, Lou Dobbs and others to testify at trial would have been extremely stressful and embarrassing, and risk further damage to the Fox brand and reputation of the management team. In addition, Fox News is not required to apologize publicly, something that Dominion Voting Systems had been pressing for.

The damages being paid will likely be covered, at least in part, by insurance coverage. There will be significant legal fees generated in the case as well. Fox News reportedly spent only six minutes on coverage of the settlement yesterday, according to CNN.

For Dominion Voting Systems, although they did have a strong case, the bar is very high for defamation cases against the media in order to preserve free speech rights, even if there may be the occasional erroneous reporting. The legal standard requires that plaintiffs prove that defendants knew what they were saying was a lie or had a reckless disregard for the truth.

“The truth matters,” Dominion attorney Justin Nelson told reporters after the settlement was announced. “Lies have consequences.” Fox put out a statement that said, in part, “We are pleased to have reached a settlement of our dispute with Dominion Voting Systems. We acknowledge the Court’s rulings finding certain claims about Dominion to be false.”

Dominion Voting Systems might also have been swayed to settle the suit as it may be beneficial to its other litigation against Rudy Giuliani and Sidney Powell.

Although Fox will be able to put the Dominion case behind it, its troubles are far from over. It still faces a $2.7 billion defamation lawsuit filed by another voting technology company Smartmatic USA, which is claiming that Fox News broadcasted lies that decimated its business. Smartmatic has also sued several of Fox News anchors over alleged false reporting.

Fox News, which generates a healthy $1.4 billion per year in revenue with an extremely high cash flow margin of 60%, can certainly afford the settlement financially.

But it will have to work hard to make sure that its news coverage remains fair and balanced, both to viewers, and to advertisers as well.