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Judge Allows Fox Corp. As Defendant In Smartmatic Lawsuit, But Refuses To Dismiss Network’s Counterclaim

The New York judge overseeing Smartmatic’s $2.7 billion lawsuit against Fox issued two rulings today, handing each side a win.

Smartmatic sued Fox, network personalities and guests in 2021, claiming that they amplified false claims that the election systems company was involved in rigging the 2020 election.

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Another company, Dominion Voting Systems, also sued Fox, but settled the case for $787.5 million last year just as it was about to go to trial in a Delaware Court.

In one ruling, New York Judge David Cohen refused to dismiss Smartmatic’s claims against Fox Corporation, concluding that the election systems company had “sufficiently alleged” that Rupert Murdoch and Lachlan Murdoch played “an affirmative role” in the broadcast of defamatory statements. The ruling is not a decision on whether the Smartmatic claims are true, just that the company had cleared the threshold in its lawsuit with enough factual allegations to be a triable issue.

Among other things, Smartmatic alleged that the Murdochs were “personally and intimately” involved in programming decisions related to the 2020 election. Cohen noted that Smartmatic’s allegations include that Fox Corp. employees directed the news network to “focus on election conspiracy stories,
including those involving plaintiffs, in order to boost viewership and ratings.”

Read the Fox Corp. decision.

Cohen also refused to toss out Fox’s counterclaim against Smartmatic. Fox attorneys have characterized Smartmatic’s damages claim as “pure fiction,” to the point that it was designed to chill the network’s First Amendment rights.

The judge wrote that Smartmatic “do not establish that there has already been a binding determination
that their claims have a substantial basis in fact.” He added that Fox’s argument “is that plaintiffs’ alleged damages are so extenuated from their actual lost profits that they were pleaded and/or sought in order to chill defendants’ free speech rights. That argument has not yet been adjudicated in any court.”

He also said that the Dominion case has only so much influence on the Smartmatic case. He wrote that the doctrine of collateral estoppel — or the re-litigating of issues already decided — “does not apply to any decisions or orders rendered in an action that was subsequently settled and discontinued.”

Read the Fox counterclaim decision.

Eric Connolly, Smartmatic’s lead attorney on the case, said in a statement, “We are pleased with the court’s decision. We look forward to proceeding and holding Fox Corporation, as well as Fox News, responsible for the damage they did to Smartmatic.”

Connolly is managing chair of the Litigation Group at Benesch Friedlander Coplan & Aronoff LLP.

A Fox spokesperson said in a statement, “We will be ready to defend this case surrounding extremely newsworthy events when it goes to trial, likely in 2025. 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.”

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