Jun 04, 2023

Fox News and Dominion reach settlement on first day of trial

Daniel Arkin

The lawyer appointed as special master in the defamation trial will no longer investigate Fox News now that Dominion and the media giant have settled the case, according to a source familiar with the situation.

Judge Eric Davis this morning appointed Delaware litigator John A. Elzufon to probe whether Fox News and its parent company, Fox Corp., had "complied with their discovery obligations." The settlement reached between both parties this afternoon averted a trial but initially left unclear whether Elzufon's work would continue.

The source familiar with the matter said tonight that Elzufon's investigation will not go forward.

Dominion declined to comment, and Fox did not immediately respond to a request for comment.

Davis last week sanctioned Fox for not turning over evidence in a timely fashion. The evidence in question included audio recordings of Rudy Giuliani appearing to concede to Fox News host Maria Bartiromo that he did not have proof of fraud in the 2020 presidential election.

Elzufon had been given a wide investigative berth. In a four-page filing this morning, Davis said Elzufon could request depositions with whomever he wishes and that the associated costs must be paid by Fox.

Zoë Richards and Jane C. Timm

Although the $787.5 million settlement is less than half of the $1.6 billion in damages Dominion initially sought from Fox News, it's still one of the biggest known dollar amounts for a defamation lawsuit filed in the U.S.

"It might be the biggest of its kind in history," said RonNell Andersen Jones, a professor at the University of Utah College of Law who specializes in the First Amendment.

The confidential aspect of most settlements means it's not possible to know whether there's been a larger one.

Another sizable defamation penalty came just last year in the Connecticut lawsuit brought against Infowars' Alex Jones and his company, Free Speech Systems. Last year, Jones was ordered to pay $1.4 billion for defamation stemming from the suit.

In that case, a judge ordered Jones to pay $473 million in punitive damages to families of the victims of the Sandy Hook school shooting after he promoted false claims that the massacre was a hoax. The penalty was in addition to an earlier demand from jurors that Jones pay $965 million to the victims' families and an FBI agent who responded to the 2012 attack.

Julia Jester

Former Fox News host Bill O’Reilly reacted to today's settlement in part by highlighting the pending litigation facing his former employer.

"Going forward, Fox News faces a similar lawsuit from the Smartmatic Company and perhaps thousands of lawsuits from Fox shareholders. What a disaster," O'Reilly wrote on his website.

O’Reilly, who was ousted from the network in April 2017 after an internal investigation into allegations of sexual harassment, went on to criticize Fox.

"This is what happens when money becomes more important than honest information," he wrote.

"Once the facts begin to overwhelm any point of view, a news agency has an obligation to say that," O'Reilly said, adding that he lost more than a thousand paid members after he concluded the 2020 election was not stolen.

"Fox News saw it differently, and now payment has been rendered," he said. "But the nightmare will continue for FNC."

Julia Jester

Pressed about whether the settlement would require Fox News to issue an on-air retraction, correction or apology, a Dominion spokesperson did not directly answer but indicated that Fox's acknowledgment of having made false statements is likely to be the only apology the public would see.

"An apology is about accountability, and today Dominion held Fox accountable," the spokesperson said in a statement.

"Fox paid a historic settlement and issued a statement acknowledging that the statements about Dominion were false."

In a statement after the settlement was announced in court, Fox News said, "We acknowledge the Court's rulings finding certain claims about Dominion to be false."

NBC News

Zoë Richards

Dominion lawyer Stephen Shackelford said he hoped the settlement will have a lasting impact on the news industry.

In an MSNBC News interview, Shackelford praised Judge Eric Davis for not giving Fox News a "free pass" and for recognizing that "just because something is newsworthy, if you know it's a lie, you can't publish it, or you face liability."

"The truth matters, and $787.5 million, hopefully, will make a difference the next time a major news network decides to put profits over the truth," Shackelford added.

Phil McCausland

Dominion Voting Systems CEO John Poulos shared a lengthy statement after the company's $787.5 million "historic settlement" with Fox News was reached.

He noted that "Fox has admitted to telling lies" about his company and said, "Nothing can ever make up for that.""Throughout this process, we have sought accountability and believe the evidence brought to light through this case underscores the consequences of spreading and endorsing lies," Poulos said.

"Truthful reporting in the media is essential to our democracy," he added.

Poulos also thanked the court, election officials, the company's legal team and Staple Street Capital — the private equity firm that owns Dominion.

Lillian Rizzo, CNBC and Daniel Arkin

Dominion wasn't the only voting machine company suing Fox. Smartmatic, a multinational firm that makes electronic voting systems, is pursuing a $2.7 billion defamation lawsuit against Fox in New York Supreme Court.

Smartmatic made it clear in a statement after the Dominion settlement was announced that it is not backing down:

"Dominion's litigation exposed some of the misconduct and damage caused by Fox's disinformation campaign. Smartmatic will expose the rest. Smartmatic remains committed to clearing its name, recouping the significant damage done to the company, and holding Fox accountable for undermining democracy."

Phil McCausland

Dominion Voting Systems CEO John Poulos said outside the courtroom that "Fox has admitted to telling lies" in reaching a $787.5 million settlement in the monthslong legal battle.

Dominion sued Fox News in 2021, alleging it defamed the voting machine maker as it shared baseless claims that Dominion's voting machines had "rigged" the 2020 presidential election and flipped millions of votes.

The lawsuit had demanded $1.6 billion in damages.

Jason Abbruzzese

The price of Fox Corp. shares dropped briefly after news of its settlement broke but rebounded in after-hours trading to trade at $34. Shares of Fox Corp., the parent company of Fox News, are up about 12% in 2023.

The settlement of $787.5 million is sizable, but analysts believe the company could have weathered an even larger penalty.

Zoë Richards

Angelo Carusone, the president of Media Matters, a progressive media watchdog group that is a constant critic of Fox News, blasted the network in a statement after the settlement was reached, suggesting it peddled "propaganda" and is a "destructive force."

"The stain this leaves on Fox can't be wiped out with money. The network has been completely exposed as a partisan propaganda outlet that is willing to do anything for profit and power," Carusone said, accusing the network of knowingly lying about the 2020 election. "What the Dominion trial offered was a keyhole view into the day-to-day industrial-scale deceit that takes place at Fox. It helped illustrate why the company is such a uniquely destructive force."

Jane C. Timm

Dominion Voting Systems settled with Fox for $787.5 million, a lawyer for the voting technology company just told reporters outside the Delaware courthouse.

Dareh Gregorian

Fox Corp. said in a statement it was "pleased to have reached a settlement" and "hopeful" it would help the country move on.

"We acknowledge the court's rulings finding certain claims about Dominion to be false. This settlement reflects Fox's continued commitment to the highest journalistic standards," the statement said. "We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues."

Daniel Arkin

Hours before Dominion and Fox settled, the judge overseeing the trial appointed John Elzufon as a special master to investigate how the media company handled discovery.

It's not clear what becomes of that inquiry now that the parties have settled.

Asked what he expects will happen now, Elzufon said he wasn't sure.

"Quite frankly," he told NBC News. "I don't know. So that's the best answer I can give you."

Phil McCausland

Judge Davis commended both sides for their excellent legal work, noting "this is the best lawyering I've ever had."

Davis noted that he had been on the bench since 2013, but he said he had "never had as good a lawyering" in his courtroom. He acknowledged the quality of the briefings, the attorneys' abilities and the workload they'd taken on.

"I just want to say I would be proud to be your judge in the future," he said.

Davis had previously excoriated Fox's lawyers for allegedly withholding evidence and expressed clear skepticism about their defense. Just prior to the settlement, Davis had appointed a special master to investigate how the media company handled court-ordered discovery.

Dareh Gregorian

Judge Davis thanked jurors for their brief service after announcing the parties had settled the case.

The 12 jurors and 12 alternates were seated late Tuesday morning for what they were told would be a six-week trial, with opening statements starting at 1:30 p.m. ET. Instead they wound up being dismissed at 4 p.m.

"It's short compared to what you thought," Davis said, before assuring them their service was important.

"Without you, the parties would not have been able to resolve their situation," the judge said.

Daniel Arkin

In a stunning move, lawyers for Dominion Voting Systems and Fox reached a last-minute settlement on Tuesday afternoon before opening statements in the high-stakes trial could begin.

The settlement heads off what would have been the biggest media trial in decades.

Christopher Cicchiello

The court has returned from an extended break. After being scheduled to return at 1:30 p.m., it was almost 4 p.m. before the court resumed.

Julia Jester and Dareh Gregorian

The two lead lawyers in the case went into the judge's chambers together for a short period of time before returning to the courtroom.

Dominion attorney Justin Nelson and Fox attorney Dan Webb continued huddling together in the courtroom.

Opening arguments had been scheduled to start at 1:30 p.m. ET, but the judge has not returned to the bench, leading to speculation that settlement discussions were underway. The trial had been set to begin yesterday, but was delayed a day, which also triggered speculation about a settlement.

Julia Jester, Jane C. Timm and Daniel Arkin

Davis has formally appointed a special master to investigate Fox News over its handling of discovery, nearly a week after he scolded the media company for not turning over evidence in a timely fashion.

The judge tapped Delaware litigator John Elzufon to look into whether Fox complied with its discovery obligations heading into the defamation trial, according to a four-page filing.

The special master can depose whomever he wishes — and all those costs must be paid by Fox, as Davis explained from the bench last week.

Elzufon must provide a written report regarding the investigation no later than 4 p.m. ET May 15.

Dareh Gregorian

Dominion was scheduled to begin its approximately 90-minute opening statement to the jury at 1:30 p.m. ET, but as of 2:45 p.m., there was no sign of the judge or the jury, and no reason was given for the ongoing delay.

Daniel Arkin

The trial was set to restart at 1:30 p.m. ET, but proceedings have yet to resume as we approach 15 minutes after the hour. No reason has been given for the delay.

Daniel Arkin

The first witness who could be called to the stand is Tony Fratto, a veteran communications professional who acted as a spokesman for Dominion during the 2020 presidential election, according to CNBC's Eamon Javers.

Fratto is now the global head of communications for Goldman Sachs, according to his LinkedIn profile. He served as a spokesperson for the George W. Bush administration, including a three-year stint as deputy White House press secretary.

Jane C. Timm

The court prohibits reporters from sending dispatches in real-time while inside the courtroom, but Jane C. Timm offers this view from the room while on lunch break.

The Delaware Superior Court's largest courtroom is packed to the gills for the first day of trial, with lawyers, reporters, publicists and members of the public filling the long rows of wooden benches.

While the top lawyers sit at cushy chairs in front of large desks inside the well of the court, more than a dozen of their law firm colleagues are in the first rows behind the bar. Those colleagues — a mix of lawyers and support staff — are packed so tightly that some have arms around their colleagues.

Rows of reporters sit behind them clacking away on keyboards, earning a request from Davis that reporters attempt to type more quietly so as not to make the jurors think one moment is more noteworthy than others. In this room, the typing itself can cause quite a din and the judge said he worried it would influence the jury.

Daniel Arkin

No. 4,787 on Fox's list of exhibits is the HBO documentary film "Kill Chain: The Cyber War on America's Elections," which premiered in March 2020.

The 90-minute film "takes a chilling look into the vulnerability of election technology," according to a summary on HBO Max's website. The film prominently features Harri Hursti, a leading voting security expert.

It was not immediately clear why Fox put "Kill Chain" on its list of exhibits. The document shows that Dominion's lawyers objected to its inclusion on hearsay grounds.

Ginger Gibson

The judge said the court will resume at 1:30 p.m. ET and hear first from Dominion's team.

Megan Lebowitz

The court just started a lunch break that is expected to last approximately an hour.

Dareh Gregorian

Davis gave jurors a preview of what the days in court would look like.

He said the days' proceedings would begin at 9:30 a.m. each day, and would wrap up at about 4:30 p.m., though he indicated they could go a little longer or shorter depending on the flow of the trial.

Julia Jester and Dareh Gregorian

The judge told jurors opening statements will begin after they have lunch.

Each side is expected to take 90 minutes, so the statements are expected to take up most of the afternoon session.

The judge said the first witness in the case will be called Wednesday.

Megan Lebowitz

The judge called in the jury to deliver instructions on their use of notes, impartiality and what to expect moving forward.

He will allow jurors to take notes to help with recollection. The judge also said it would be a violation of their sworn duty to base their decision on anything besides evidence presented in the case.

He also told the jurors not to read the coverage of the trial.

The court will break for lunch after instructions, which will be followed by opening statements.

Ginger Gibson

The judge began by announcing that one person in the courtroom had been forced to leave after being caught taking photos — in violation of the rules set forth for the trial. The removed attendee was a Fox News PR representative.

The judge said that person told court officials that others were posting on Twitter — also a violation of the rules — from inside the courtroom.

The judge warned that anyone who was found breaking the rules would be removed and could be held in contempt of court.

Daniel Arkin

Fox's lengthy list of trial exhibits includes four clips from "The Simpsons," a cornerstone of the Fox broadcasting network's prime-time lineup for more than 30 years.

The clips in question each include scenes in which Homer Simpson votes in a presidential election:

— Season 20's "Treehouse of Horror XIX" shows him attempting to cast a ballot for Barack Obama.

— The promotional short "Homer Votes 2012" shows him voting for Mitt Romney.

— The YouTube short "Homer Votes 2016" features Russian President Vladimir Putin disguising himself as an American voter and trying to convince Homer to vote for Trump.

— Season 32's "Treehouse of Horror XXXI" finds Homer unsure whether to vote for Trump or Biden.

It was not immediately clear why the clips were included in Fox's list of exhibits. The half-hour prime-time version of "The Simpsons" has aired on Fox since 1989, although the series is now technically produced by Disney, which acquired Murdoch's entertainment assets in 2019.

Jane C. Timm, Jason Abbruzzese and Kevin Collier

Murdoch is expected to be called to take the stand; his previous testimony in the case has already been made public in court filings.

Fox News was "trying to straddle the line between spewing conspiracy theories on one hand, yet calling out the fact that they are actually false on the other," the News Corp. executive chairman said in his deposition.

Murdoch acknowledged in testimony that some hosts, including Sean Hannity, Dobbs and Bartiromo, had done more than just give a platform to baseless claims of voter fraud.

"Yes," the media magnate said, according to the filings. "They endorsed."

Read the full story here.

Dareh Gregorian

Dominion submitted its list of trial exhibits to the court, and it's lengthy — more than 7,000 exhibits.

The list of 7,021 exhibits includes videos and transcripts from Fox, emails and text exchanges involving Fox employees, Trump tweets and a variety of other documents.

Fox's exhibit list is not short either — it includes 5,169 items.

Julia Jester

The court has now seated 12 jurors and selected 12 alternates.

Daniel Arkin

Davis scolded Fox's lawyers last Wednesday, sanctioning the media company for withholding evidence in the trial. He said he was considering an investigation and formal censure.

Davis was frustrated that Fox had not turned over evidence in a timely manner, including recordings of Bartiromo speaking with longtime Trump lawyer Rudy Giuliani about Dominion.

In one audio clip, a Trump official can be heard telling Fox News "there weren't any physical issues with the [voting] machines" during inspections.

The day before Davis sanctioned Fox, the judge appeared frustrated that the network had not been straightforward about Rupert Murdoch's role as leader of the media giant.

"This is a problem," the judge said, according to a court transcript. "I need to feel comfortable when you represent something to me that is the truth."

Fox lawyers later apologized in a letter to the judge for the "misunderstanding."

Julia Jester

Twelve jurors have been seated. The court is now moving to seat the 12 alternate jurors.

Julia Jester

The judge told the court that new exhibits were filed overnight. Opening statements are expected to begin soon.

Jury selection has begun.

Susan Kroll

In a scene straight out of a movie, a flock of lawyers for Dominion arrived at the Leonard L. Williams Justice Center here in Wilmington minutes ago. They were followed by a gaggle of lawyers for Fox.

Daniel Arkin

Dominion is at the center of one of the biggest media trials in decades. But you have probably heard considerably less about Staple Street Capital, the New York private equity firm that owns it.

Staple Street Capital paid $38.3 million for a roughly 75% majority stake in Dominion in July 2018. The firm valued the technology vendor at roughly $80 million at the time, Fox has said in legal filings.

Stephen D. Owens and Hootan Yaghoobzadeh, the co-founders of Staple Street, both used to work at the Carlyle Group, one of the most powerful private equity firms in the world.

Street Street says it has roughly $900 million in assets under management, with a portfolio that includes an IT services provider, a payroll reporting service, a natural gas compression company and a New Jersey-based flower bulb distributor.

Dareh Gregorian and Jane C. Timm

The jury will be asked to consider whether Fox News journalists acted with actual malice — knowing falsity or reckless disregard for the truth — in publishing the claims and whether damages are due.

It will also be asked to weigh Fox Corp.'s involvement in the publication of the alleged defamatory statements.

Jane C. Timm

Ex-Fox News producer Abby Grossberg said she recently found more evidence relevant to Dominion's defamation suit against her former employer and plans to turn it over to the court.

Grossberg, who worked as a senior producer for hosts Maria Bartiromo and Tucker Carlson, alleged in a new sworn statement obtained by NBC News that Fox lawyers ignored repeated reminders about an additional cellphone in her possession and did not search it during court-ordered discovery.

In the statement, Grossberg said she repeatedly told Fox lawyers that she had an inoperable company-issued cellphone that she used during 2020 election coverage. Fox lawyers told her to hang on to the device but never searched it or copied her files, as they did with her other phones, according to the statement.

Read the full story here.

Dareh Gregorian and Jane C. Timm

In allowing the case to go to trial last last month, Davis handed Dominion a major win when he agreed that the challenged statements are false.

The ruling spares Dominion from having to litigate baseless conspiracy theories about its role in the 2020 election.

"The evidence developed in this civil proceeding demonstrates that is CRYSTAL clear that none of the Statements relating to Dominion about the 2020 election are true," the judge wrote in his 81-page ruling, emphasizing the word "crystal" in bold.

Fox News had argued that the challenged comments were opinion and protected as such, but Davis disagreed.

"The Court finds, as a matter of law, that the Statements are either fact or mixed opinion," he wrote. "The Statements were capable of being proven true, and in fact the evidence that would prove the Statements was discussed many times (but never presented)."

Kevin Collier and Jane C. Timm

Court filings unsealed leading up to the case going to trial gave the public an unprecedented look behind the scenes at Fox News after the 2020 election.

The filings, along with the underlying exhibits, showed that executives, stars and producers of the network knew the claims about Dominion were without merit.

The trove of internal communications also suggested that Fox News zeroed in on fraud claims to boost ratings and appease its core viewers, who executives feared were abandoning the channel for other conservative media outlets — particularly after Fox News was the first network to project that Biden had won the key battleground state of Arizona on his way to winning the White House in 2020.

Read the full story here.

Jane C. Timm

As then-President Trump and his allies relentlessly pushed the lie that the 2020 election he legitimately lost to Biden was stolen from him, baseless conspiracy theories about the voting machines made by Dominion proliferated.

In 2021, Dominion filed a defamation suit against Fox News and its parent company, challenging a number of statements made on air by hosts and guests and seeking $1.6 billion in damages for harm it said was caused by lies about its machines.

The judge has already agreed with Dominion that the statements were wrong. However, Fox News has argued that the network was reporting on Trump's extraordinary claims of election fraud. In defending against the claims, Fox says that it is fighting to protect press freedoms and that the U.S. Constitution shields its work.

Read more about the case, and what's at stake, here.

Jane C. Timm

Spokespeople for Dominion and Fox put out new statements over the weekend ahead of the trial's start.

"In the coming weeks, we will prove Fox spread lies causing enormous damage to Dominion. We look forward to trial," a spokesperson for Dominion said.

A spokesperson for Fox said: "Dominion's lawsuit is a political crusade in search of a financial windfall, but the real cost would be cherished First Amendment rights. While Dominion has pushed irrelevant and misleading information to generate headlines, Fox News remains steadfast in protecting the rights of a free press, given a verdict for Dominion and its private equity owners would have grave consequences for the entire journalism profession."

Read the full story here. Read the full story here. CRYSTAL Read the full story here. Read more about the case, and what's at stake, here.