Fox Corp. must face Smartmatic's $2.7 billion defamation suit

Fox Corp. must face Smartmatic's $2.7 billion defamation suit, a New York judge ruled on Wednesday, denying a motion to dismiss defamation claims against Fox News' parent company.

But Smartmatic must also face Fox's counterclaims that the substantial defamation claims are intended to supress free speech, the judge ruled in a separate order.

The pair of orders — a win for each side — continue the lengthy and costly court battle between Smartmatic, a voting company accused of rigging the election despite being used by just one U.S. district in 2020, and Fox Corp., which has said it covered newsworthy events and individuals surrounding the 2020 election.

Smartmatic sued Fox and some of its hosts and guests in 2021; this case is one of at least 11 ongoing lawsuits over election conspiracy theories.

Fox lawyers had asked the court to dismiss the claims against Fox Corp., arguing that the parent company — led at the time by executives Rupert and Lachlan Murdoch — was not legally responsible for Fox News coverage.

New York County Supreme Court Justice David Cohen disagreed and denied the motion Wednesday, ruling that "plaintiffs have sufficiently alleged in their amended complaint that Corp. employees played an affirmative role in the publication of the defamation at issue."

Cohen also noted that plaintiffs have “sufficiently alleged that Corp. employees acted with malice” — enough to consider the issue at trial.

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But he also simultaneously denied Smartmatic's motion to dismiss Fox News and Fox Corp.'s counterclaims against them, in which the media company had argued Smartmatic's claims were designed to quell free speech.

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Fox's "argument here is that plaintiffs' alleged damages are so extenuated from their actual lost profits that they were pleaded and/or sought in order to chill defendant's free speech rights. That argument has not yet been adjudicated in any court," the judge wrote.

Last year, Fox Corp. agreed to pay $787.5 million to Dominion Voting Systems to settle similar but separate claims, moments before they were to go to trial in a Delaware court. The settlement between Dominion and Fox won’t weigh heavily on the current case, the judge wrote in one of his Wednesday orders, because that case was settled by the parties — not a court of law.

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