The board of directors of Fox Corp. has been charged in a lawsuit accusing the company’s directors of adopting an illegal business model focused on the pursuit of profit by deliberately spreading falsehoods about the 2020 presidential election.
New York City’s pension funds filed a lawsuit Tuesday in the Delaware Court of Chancery alleging that Fox’s board members and other executives “knowingly disregarded” the risk of exposing themselves to defamation claims “with potentially enormous financial liability and potentially greater business implications.”
The shareholder action is at least the third since Fox settled a defamation lawsuit brought by Dominion Voting Systems for $787.5 million in April, minutes before the trial was set to begin. Defendants named in the lawsuit, which will remain secret until at least Friday to allow for redactions, include media mogul Rupert Murdoch, Fox Corp. CEO Lachlan Murdoch, former Chief Legal Officer Viet Dinh and Fox News CEO Suzanne Scott , among others. .
Shareholders allege that Fox’s board made a deliberate decision to prioritize profits over compliance with the law. They allege that company executives knew of the risk of amplifying false claims that Dominion and Smartmatic had rigged votes, but continued to do so after receiving backlash from viewers for initially failing to to support former President Donald Trump’s position that he had won the election.
According to the complaint, Fox News did not respond to letters from Dominion demanding retractions and threatening lawsuits. Network hosts continued to promote the defamatory story.
Lawsuits from the voting technology companies followed. As evidence that Fox did not have a solid legal basis when it continued to air claims that the election was rigged, shareholders point to an order from the judge overseeing the case, which invalidates Fox’s legal defense. In the opinion, Delaware Supreme Court Justice Eric Davis took the question of whether Fox’s statements were false out of the hands of the jury, ruling that the “evidence developed in this civil action demonstrates that (it) is crystal clear that no of the statements regarding The Control of the 2020 Elections are true.” The lawsuit would only lead to damages.
“Fox News had broadcast factual claims of criminal election fraud that were indisputably false,” according to the complaint, which argues that the network “lacked a viable legal defense to the defamation claims.”
Shareholders also cite defamation actions by Smartmatic, Venezuelan businessman Majed Khalil, who was accused by Fox News host Lou Dobbs of being a “Hezbollah liaison” responsible for election fraud, and the parents of a slain Democratic Democratic Party staffer National Committee, which sued Fox for a false report. story that their son was murdered for hacking DNC emails and providing them to WikiLeaks. The case was settled for millions of dollars in 2020, shortly before Dobbs and Sean Hannity’s depositions.
“Fox has now joined the pantheon of companies that have incurred enormous costs through tort lawsuits,” the complaint said.
The lawsuit also raises claims that Fox’s board failed to make efforts to establish a framework to minimize legal risks. The accusation is based on the “complete absence of board-level reporting mechanisms that respect the risk of defamation, despite the lack of written editorial standards at Fox News and despite the fact that the board of directors was clearly aware of Fox’s defamation problem.” ”
After the Dominion settlement, Lachlan reaffirmed Fox’s business model. “There is no change in programming strategy at Fox News,” he said on an earnings call in May. “It’s clearly a successful strategy.” According to the complaint, Fox hosts continue to spread false stories. This includes claims by hosts that Trump supporter Ray Epps orchestrated the Jan. 6 insurrection and that former Disinformation Board Director Nina Jankowicz edited private citizens’ tweets on behalf of the government.
Media company boards do not regularly monitor editorial policies. This case could potentially raise the standards to which they should be involved.
Ann Lipton, associate dean for faculty research at Tulane University’s law school, says the so-called Massey claim, which accuses the company’s board of directors of deliberately ignoring defamation risks in the pursuit of profit, sets a high bar for clear, because company directors usually receive respect when making statements. business decision. She notes that the board was likely acting in the best interests of the company, and that the “question is whether they went too far.”
Lipton notes that this lawsuit enters uncharted legal territory because Massey claims are typically brought by shareholders in banking regulatory cases for breach of statutory law, which is written law enacted by legislative bodies, rather than common law, which establishes comes through lawsuits.
If the case progresses far enough, it has the potential to reveal the extent to which Fox’s board knew the network’s claims that the election was rigged were false.
Vos declined to comment.
