The Daily - The Blockbuster Fox Defamation Trial That Wasn’t

Episode Date: April 20, 2023

At the very last minute, both Dominion Voting Systems and Fox News decided to settle their closely watched defamation lawsuit, rather than make their cases at trial.Jeremy W. Peters, who covers media and politics for The Times, was inside the courtroom as it happened.Guest: Jeremy W. Peters, a media and politics correspondent for The New York Times.Background reading: The settlement with Dominion Voting Systems was another extraordinary twist in a case that exposed the inner workings of the most powerful voice in conservative news.The settlement averts what would have been a landmark trial.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.

From New York Times, I'm Michael Barbaro. This is The Daily. Today, why at the very last minute, both Dominion Voting Systems and Fox News decided to settle the most closely watched defamation lawsuit in decades rather than make their case at trial. My colleague, Jeremy Peters, was inside the courtroom as it happened. It's Thursday, April 20th.

Jeremy, you were at this very moment supposed to be in a Delaware courtroom covering day two of this blockbuster defamation trial. And instead, based on your background on this Google Hangout, you are not in a courtroom. You are in a hotel room. That's right. Where I'm doing reporting, trying to figure out how this all fell apart. We had an 11th hour settlement in the case that no one really anticipated. This case had gone on for two years with no serious settlement talks. And now both parties have agreed to make this go away for $787.5 million. That's what Fox will pay to Dominion Voting Systems, sparing Fox the really potentially embarrassing spectacle of having the chairman of its company, Rupert Murdoch, its star hosts like Tucker Carlson

and Sean Hannity from taking the witness stand. Right. So let's talk about why this has all happened, because it did feel very much unexpected. The last time you came on the show, Jeremy, to preview this trial, a settlement wasn't really even anything we dwelled on. It felt that remote a possibility. That's right. For two years, there had been no serious talks of a settlement by either side. Dominion had what legal scholars described as the strongest defamation case they had seen against a media organization. And remind us why that was.

So remember that Dominion is suing Fox News for what Fox broadcast about it after the 2020 election. Dominion was at the center of all of these conspiracy theories that claimed its machines were somehow susceptible to hacking and that people had gotten inside them and flipped votes that belonged to Trump, to President Biden. And Dominion's case is that those statements were defamatory. They were false. And in order to win, Dominion would have had to prove the people at Fox knew that what they were saying on the air was false, but did so anyway. Or they would have to prove that people at Fox acted with an extreme degree of recklessness.

Because as part of the lawsuit, it's able to get its hands on thousands and thousands of emails and text messages that Fox News producers, hosts, and executives were exchanging in which you can see they really express doubt and in some cases outright scorn about the allegations that President Trump and his supporters were making about fraud in the 2020 election. For example, you had text messages from Tucker Carlson in which he mocks Trump. He calls his legal team and his campaign team incompetent. You also have skepticism from the chairman of the company himself, Rupert Murdoch, who is also casting doubt on these voter fraud claims that his network is still promoting at the time. Right. So if your dominion and the basis of your lawsuit is showing that Fox News was lying about you and knew it was lying about you, these pieces of evidence were looking very powerful. Yes, but despite all the evidence, Fox still believed it had a chance in the case. And that's because defamation is really difficult to prove to a jury.

All it takes is one or two people to decide that Dominion hadn't met its burden and hadn't sufficiently explained the states of minds of the people at Fox who were making decisions about their election coverage. It may not have been very easy or as easy as Dominion hoped it would be to prove that Fox intentionally misled its audience for profit. Right, which is why by early April, both sides are feeling pretty good about their chances at trial and hurtling towards that trial. So when does that all really start to change?

So in the run-up to the trial, as happens before all trials like this, the judge makes a series of decisions about the parameters of the case, the ground rules for how each side can make its arguments and what they can tell a jury. But in what was a series of disappointing developments for Fox, the judge makes three big decisions against them. First is the judge basically makes Dominion's job much easier by ruling that they don't have to prove any of these statements made on Fox's airwaves were false. Typically in a defamation case, that's a big task for the plaintiffs. Well, the judge said, look, these statements that Dominion machines were hackable, that you could go in and switch votes from one candidate to another are so preposterous that I'm not even going to ask the jury to consider whether or not they're false. They're false. So Dominion is relieved of a significant burden there

and is really only left with one job to prove that Fox knew it was lying to its audience about voter fraud. Interesting. So you're saying the judge in this case, in a sense, kind of gives Dominion the legal equivalent of an easy pass and makes its job from the outset a lot easier and smaller than it might have been under different circumstances. Correct. And again, that speaks to the strength of the evidence against Fox News and just how exceptional this case has been. I mean, judges don't typically

do that in a defamation case. Okay, what's the second thing that happens? The judge really takes away Fox's ability to argue the defense it wanted to argue. It had really argued that the First Amendment protected the commentary that was uttered on its network about the election. And what they were trying to say was, look, we didn't do anything wrong here. Yes, the president may have been lying, but it was our obligation to report that as a news organization. These were inherently newsworthy statements, even though they were false. What's more newsworthy, Fox said, than a president of the United States contesting his election.

Got it. But the judge said, no, that's not the law. You can't argue that. And if you do, I'm going to turn to the jury and tell them to disregard what you're saying, that you're wrong. And why did the judge say that? Because that argument has always seemed somewhat reasonable under most conventional understandings of the First Amendment. Yes, that's absolutely right. And you could see how it would be compelling to a jury. But that's not what the law says. The law actually doesn't protect journalists like you and me from repeating

false statements. If it's false, then it can be considered defamatory by a jury. And if that weren't enough, then a third thing happens. The judge determines that Fox has not been forthcoming with him, that it misled Dominion about Rupert Murdoch's formal role within Fox News. Initially, what Fox said is Rupert Murdoch is not a corporate officer for Fox. Now, that's significant because under Delaware law, if you're a corporate officer, you can be compelled to testify in person. Fox wanted to prevent that, and it told Dominion that Rupert Murdoch was not a corporate officer. Well, it turned out that that wasn't true.

Got it. And Fox had to disclose this to the court, and the judge was furious. So he issues a sanction against Fox, and he tells Fox's lawyers that he's really starting to worry about their credibility. Which is definitely the wrong foot to get off on with the judge overseeing your billion-dollar defamation case. But Jeremy, why was it so important for Fox to keep Rupert Murdoch off

the stand, which is perhaps what motivated it to mislead the court and Dominion about his title with Fox? Rupert Murdoch was going to be a potentially problematic witness for Fox. He was deposed in January by Dominion lawyers. And in that deposition, he said things that were not helpful. At one point during his deposition, he states that Fox hosts had actually endorsed President Trump's lies about the 2020 election. And that's significant because that's effectively Dominion's whole case. They have argued to the judge that they were defamed because Fox News hosts and guests endorsed the president's falsehoods. They did more than just cover them as news. They promoted them. So suddenly the most powerful person at Fox

is helping Dominion make its own case. That's exactly right. And Rupert Murdoch seems to know that his deposition did not go well because once it's over, his general counsel tries to buck him up and says, they didn't lay a finger on you. Murdoch then points to Dominion's lawyer who's just opposed him and says, they didn't lay a finger on you. Murdoch then points to Dominion's lawyer,

who's just opposed him, and says, I think he would disagree with you. Wow. And he says, indeed I do, sir. So if you're Fox, you don't want to have Rupert Murdoch on the stand, and yet he is now going to be on the stand. Your legal arguments are starting to be knocked down by the judge and Dominion's legal burdens are getting lighter by the day. So this is turning out to be a bit of a disaster. Right.

Heading into trial, Fox essentially has three strikes against it. And you would think that would motivate them to settle the case. Right. But that doesn't happen. They're pretty stubborn. They have a plan that even if they lose in Delaware, they want to appeal this and make it a First Amendment case that they believe can get all the way to the very conservative Supreme Court

and that they would be on strong legal footing there. Interesting. So they're going to roll the dice. So here we are on Tuesday morning in Delaware Superior Court in downtown Wilmington. The jury has been sworn in, seated. The lawyers for both sides have microphones clipped to their lapels, and they are getting ready to make their opening statements. In this trial, the biggest, most significant media defamation case in a generation

is happening. We'll be right back. So, Jeremy, tell us about the scene inside this Delaware courtroom as lawyers for both sides are miked up and it very much becomes clear that this trial is for real. So there's about 100 people packed into this courtroom. It's stiflingly hot. We're expecting the jury to come back after its lunch break for the opening arguments in the trial to begin. But then nothing happens. 10 minutes go by, 20 minutes go by, two hours goes by. Nothing, Not a word from the judge.

The attorneys aren't talking to reporters telling them what's going on. But we start to notice activity. The lawyers for both sides are shuttling back and forth from their conference table in front of the bench to a conference room outside in the hall. So something is clearly going on. And what are you thinking might be going on? I almost threw up. I'm serious. Why? Well, I've spent so much time and mental energy on this case, preparing for this trial we think is going to go on for six weeks that I had been told by my sources had very little chance of settling. And here it looks like they're going to settle. So deep down, you know what's going on and what's coming.

Maybe no one's saying it out loud, but you are feeling like settlement is going to settle. So deep down, you know what's going on and what's coming. Maybe no one's saying it out loud, but you are feeling like settlement is in the air. That's right. So then, just before four o'clock, the judge enters the courtroom. We haven't laid eyes on him in four hours. He's been back in his chambers the whole time. He brings the jury in. They're seated. And he very matter-of-factly

tells them the parties have resolved this case. And this is such a surprise that there are gasps in the room. It seemed like whatever stubbornness Fox had against settling this case finally Hmm. And what do you end up learning about the nature of this last-minute settlement? Well, we don't know a whole lot right away. It takes about a half an hour. Dominion's lawyers leave the courtroom and they come outside where they hold kind of an impromptu press conference for the dozens of reporters who have gathered on the courthouse steps to hear what they have to say. Today's settlement of $787,500,000 represents vindication and accountability. Lies have consequences. First, the lawyers for Dominion reveal the amount, and it's staggering.

$787.5 million. Money is accountability. And we got that today from Fox. This is the largest defamation settlement that we know of ever happening. Then Dominion tells us what this case was about to them and what that dollar figure represents. For our democracy to endure for another to hold those accountable who spread lies that undermined our democratic system and really tore the country apart. And so thank you, and we'll see you at the next one. And what do you come to understand that Dominion is getting beyond just $787 million, which it is framing as a form of

accountability, but may not have been entirely what they wanted. It's not getting one thing that I think many people involved in this case were hoping to see from Fox, and that's an apology. And sometimes in these cases, a formal apology will be part of the settlement. But that didn't happen here. Interesting. Fox doesn't have to say that they wronged Dominion or express any contrition or regret about that. Fox's statement explaining its version of what happened just says in very generic language that it acknowledges the court's finding that these statements about Dominion machines that were made on its airwaves were false. And Jeremy, let's talk about Dominion's motives for accepting the settlement that you're

describing here, with a lot of money, but not any formal apology or profound admission of fault. I very much understand why Fox would want to settle in the way that it did, given the way the case was going. But why would Dominion? Well, the trial is a big roll of the dice for them, too. They don't know what 12 men and women on that jury are going to do. It's also a lot of money. $787 million is about 10 times what the

company that owns Dominion paid for it. And by accepting a settlement, Dominion's guaranteed that money. It means that an appellate court can't reduce the size of that settlement. And oftentimes that is exactly what happens on appeals of cases like this. Got it. So a big reason to settle for Dominion is that a settlement of $787 million is a bird in the hand or 787 million birds in their hand. I get that. But this case always seemed to be about more than money for Dominion. That's what the company's leaders told the public. And that was true for a lot of other people watching the case. This trial was about forcing Fox and the people who watch it to reckon with the reality

that they had been told lies and to come to terms with the fact that the big lie is a big lie. This was supposed to be a trial about all those things, not just about Fox. So by avoiding that kind of a trial and that kind of reckoning with a settlement, is there any sense that Dominion has kind of sold everyone out? Some might argue that, but I think you have to look at the big picture here. We may never get to see Tucker Carlson grilled on the stand or Rupert Murdoch, but what we do have is this catalog of statements that Fox employees made privately that show us many of them don't

really believe what they say about President Trump. They didn't believe what was being said about Dominion machines, and that they didn't really believe that the election was stolen or tampered with. And what you also see in these text messages and emails is Fox News employees saying they were petrified their audience would leave if they didn't tell the audience what the audience wanted to hear. We know all this now. And in that sense, Dominion has achieved a big part of what it set out to do here in exposing that reality inside Fox News.

That said, Jeremy, we had always thought that perhaps a trial that ended with a verdict that found Fox had defamed Dominion, that that might be the one thing that could change Fox's skewed approach to the news. It might force Fox to rethink the way that it caters to its conservative audience. Maybe that was always naive. But I wonder, in your mind, as someone who has covered Fox and the conservative movement so closely for years, what a settlement means for that possibility, that Fox would see this case as a deterrent and would start being a different network. I don't think there's any version of this trial that would have changed Fox's behavior in any real and meaningful way.

It's just too big a business for them. The notion that they would get crosswise with their audience is something we now know because of this lawsuit they're afraid of doing. And they don't see any business model in becoming a moderate, centrist, conservative network or in becoming a network that levels with its audience. So, Jeremy, in the end, being Fox and embracing at times conspiracy theories and sometimes lies that meet its viewers where they

are, the price of that for Fox may be once in a while having to pay out a big defamation settlement. But in the end, it may be worth it because it's still earning, as we all know, billions of dollars a year. That's right. This settlement is going to dent Fox, but it's not going to bankrupt it. It still has billions and billions of dollars. The way that Fox has settled this case shows us that that's a cost that they're perfectly acceptable writing down. If it's more painful to tell their audience the truth than to write a check, they're going to write that check. Perhaps over and over and over again.

Yes, I think so, Michael. Well, Jeremy, thank you very much. We appreciate it. Thanks for having me. Fox News and its executives face several more legal challenges over its coverage of the 2020 election. A Fox shareholder has sued Rupert Murdoch and other members of Fox News' board of directors for allowing the network to broadcast false claims about the election. Meanwhile, the voting machine company Smartmatic has sued Fox for falsely claiming that its machines played a role in election fraud, in a defamation case seeking $2.7 billion in damages. In a statement issued after the Dominion settlement was announced, Smartmatic said, Dominion settlement was announced. Smartmatic said, quote,

Dominion's litigation exposed some of the misconduct and damage caused by Fox's disinformation campaign. Smartmatic will expose the rest. We'll be right back. We'll be right back. Here's what else you need to know today. In a highly anticipated decision, the Supreme Court gave itself until the end of the week to decide whether mifepristone, a drug used by millions of women to end their pregnancies, should remain widely available. The court had originally set a deadline of Wednesday to rule on access to the drug as it reviews a controversial Texas ruling which tried to ban the drug, finding that its

original approval by the FDA in 2000 was flawed. Today's episode was produced by Ricky Nowitzki, Will Reed, and Carlos Prieto. It was edited by John Ketchum and Michael Benoit, contains original music by Alisha Baetube and Dan Powell, and was engineered by Chris Wood. Our theme music is by Jim Brunberg and Ben Lanford of Wonderly. That's it for The Daily. I'm Michael Barbaro.

See you tomorrow.