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North America correspondent Barbara Miller and Emilie Gramenz in Delaware, and Lucy Sweeney

Fox News is being sued for defamation over its 2020 election coverage. The case could shake up media law and the Murdoch empire

Fox is being taken to court over airing false claims that the 2020 election was "stolen" from Donald Trump. (AP: John Locher)

The stage is set in Wilmington, Delaware, for a high-stakes legal drama pitting media giant Fox against a voting machine company over false claims its machines rigged the 2020 presidential election.

Dominion Voting Systems, which makes machines for casting and counting ballots as well as software for election officials to track results, is suing Fox News and its parent company Fox Corporation for $US1.6 billion ($2.4 billion).

It alleges Fox News "endorsed, repeated and broadcast" wild conspiracy theories that linked Dominion to a communist plot to steal the election from Donald Trump and accused the company of manipulating vote counts and paying off government officials who used the machines.

Fox argues that it was simply reporting the news and that its viewers knew that the allegations of dodgy algorithms, kickbacks and Venezuelan connections were not statements of fact. 

The trial, set to begin in April, puts a key pillar of US defamation law to the test and could have ripple effects on the country's media landscape and the Murdoch empire.

It all started on US election night in 2020

The case boils down to Fox's coverage in the weeks after the 2020 election.

Around 11:20pm on election night, the Fox News decision desk was the first major network to call the battleground state of Arizona for Joe Biden, with 73 per cent of votes counted.

On air, Trump's former press secretary Sarah Huckabee Sanders insisted it was too early to declare, and a Fox host asked the decision desk director to explain how he could be "100 per cent" on that call.

Trump, members of his inner circle, and an army of vocal supporters who made up a sizeable chunk of Fox's core audience, expressed outrage.

The result that would come to foreshadow Biden's victory became central to Trump's long-running claims that the 2020 election was "stolen" from him.

With his chances of a path back to the White House narrowing, Trump declared victory and argued, without evidence, that a "major fraud" had occurred.

conspiracy theory soon began circulating on QAnon forums and social media claiming that a company called Dominion had intentionally "deleted 2.7 million votes nationwide".

The allegation, picked up by far-right One America News Network, was that Dominion was built by associates of Venezuelan dictator Hugo Chavez to rig elections and that its machines had switched millions of votes from Trump to Biden.

Five days after the election, Trump-aligned lawyer Sidney Powell was a guest on Fox Business host Maria Bartiromo's show, where Powell discussed "evidence of fraud" relating to the Dominion machines. 

In the subsequent weeks, Powell and another Trump ally, his personal attorney Rudy Giuliani, appeared on several prime-time Fox shows where they repeated these claims.

On November 19, the theory reached maximum exposure in a disinformation-riddled press conference where Giuliani alleged a communist plot involving Dominion, Venezuela, Cuba and "likely China".

During a press conference with Sidney Powell on November 19, Rudy Giuliani claimed, without producing evidence, that a complicated plot had robbed Donald Trump of an election victory. (Reuters: Jonathan Ernst)

None of it was true. Dominion, a US company founded by a Canadian, had zero connections to Venezuela, and claims of a mysterious "vote-flipping" algorithm were debunked by multiple fact-checking units and dismissed in court.

Dominion tried to correct the record by appealing directly to Fox, but the damage had been done. 

In an op-ed published in the Wall Street Journal on November 30, Dominion's CEO John Poulos stated the allegations had "fuelled the harassment of election officials and Dominion employees across the country — including stalking and death threats".

Dominion launched defamation action against Giuliani and Powell in January 2021, and by March, they had sued Fox.

Dominion reported that its staff had been harassed over the false claims about its voting machines. (AP: Andres Leighton)

What have Dominion and Fox argued in court so far?

For two years, the matter has been progressing through Delaware's Superior Court in Wilmington.

Both sides filed motions to have the judge rule in their favour without the case going to trial, and a summary judgement hearing this week allowed lawyers to air their arguments.

Summary judgement usually applies in cases that are so clear-cut that there's no need for a jury to decide. 

Dominion summed up its case that Fox hosts provided a platform for guests who its hosts "knew would make false and defamatory statements of fact on air" because the network feared it would lose viewers.

"There was a deliberate decision … to release the kraken," Dominion attorney Rodney Smolla said.

"Fox mainstreamed the Dominion vote-rigging conspiracy."

Much of Dominion's arguments focus on the series of appearances by Giuliani and Powell, who Smolla said the network had "made a celebrity, a household name".

The network kept inviting her back, even though several hosts did not believe her claim that there had been "a massive and coordinated effort to steal the election".

Dominion wants to show the responsibility for airing the claims goes all the way up to Fox Corporation chair Rupert Murdoch.

Fox has rejected this suggestion, with attorney Erin Murphy telling the court the chain of command argument did not hold because executives were not involved in actual decision-making about daily broadcasts.

"Fox Corporation doesn't belong in the case at all," she said.

Fox Corporation chair Rupert Murdoch was among executives that spoke to Dominion's lawyers in depositions. (Reuters: Mike Segar)

Murphy argued that if senior executives, including Lachlan and Rupert Murdoch, are accountable in this case, parent companies could effectively be held liable for defamation.

Fox also argued that its viewers could separate facts from allegations. A line in Rupert Murdoch's deposition perhaps best sums up that part of the defence's argument.

The Fox chair told Dominion lawyers:

"We report the news. The President of the United States was making wild claims, but that is news."

Murphy also told Judge Eric M Davis during the summary hearing that "any reasonable viewer would have recognised the statements were being presented as mere allegations", but Dominion poured scorn on this suggestion. 

Smolla told the court this argument amounted to "legal fairy dust".

Dominion's legal team has obtained hundreds of emails and text messages between Fox editorial and executive staff and conducted depositions with key figures from the network.

It argues this tranche of documents reveals that directors, hosts and show producers were discussing concerns about the network's reputation and casting doubt on Trump's claims of election fraud — and specifically, on allegations against Dominion.

In court filings, Fox says Dominion's "kitchen-sink complaint is wildly overboard".

It argues Dominion's examples have been cherry-picked to suit a particular narrative, which it says threatens a key pillar of the free press. 

The legal doctrine underpinning US defamation law

In order to determine if Dominion has been defamed, the court will need to assess whether the evidence put forward constitutes "actual malice" on Fox's behalf.

This standard, set by a 1964 decision in New York Times v Sullivan, is notoriously hard to establish.

It applies to public figures or officials and defines a libellous statement as one made with the knowledge that it was false or with reckless disregard as to whether it was false or not. 

Joseph Russomanno, professor of journalism and mass communication at Arizona State University, says proving actual malice is a "very steep hill to climb for any plaintiff".

Dominion has pointed to several documents from its discovery period, which it says prove decision-makers at Fox knew or suspected that the claims were false at the time they went to air. 

Rupert Murdoch, pictured here with Donald Trump in 2016, privately discussed the president's "increasingly mad" claims with his staff, according to documents Dominion submitted to the court.  (Reuters: Carlo Allegri)

In one exchange, prime-time host Tucker Carlson wrote to fellow anchor Laura Ingraham: "Sidney Powell is lying, by the way. I caught her. It's insane."

She wrote back: "Sidney is a complete nut. No one will work with her. Ditto with Rudy."

Weeks after Trump's supporters stormed the Capitol in the January 6 insurrection, Rupert Murdoch emailed the president of the news division, Suzanne Scott, about whether their coverage had done damage, suggesting: "Maybe Sean and Laura went too far."

Fox's defence has pointed out occasions where reporters did state on air that the allegations had not been proven. 

"I think that's a very small grain of sand in a desert full of sand that hardly provides the kind of fairness and balance that you would like to see," Russomanno said.

Fox argues that actual malice cannot be proven in this case, and a ruling in Dominion's favour would have a chilling effect on free and open reporting.

"The United States Supreme Court specifically established the actual malice standard for that reason, to give news media organisations a little bit of what it called breathing space to be able to pursue the truth, to report on public figures and public officials," Russomanno said.

RonNell Andersen Jones, a law professor at the University of Utah, says this case is a watershed moment for defamation law.

She said New York Times v Sullivan sets the bar incredibly high in recognition of the right to free speech.

"It means that we can't have liability for journalism that is merely sloppy or partisan or biased or even just on the basis of it being inaccurate," she said.

"The constitution draws the line at a deliberate, defamatory lie, and it turns out to be a really difficult thing to prove. And this case is really testing the boundaries."

How a 'wackadoodle email' could be central to the Dominion case

There is one document in particular, Exhibit 259, that Andersen Jones says could be key to Dominion's argument to prove actual malice.

The so-called "wackadoodle email" was sent to Powell by an artist with no apparent expertise in elections, who laid out a series of conspiracy theories.

In addition to rambling allegations of vote-flipping software, the writer says she speaks to the wind, was "for all intents and purposes … internally decapitated" in a car accident yet continues to live, experiences a form of time-travel in her vivid dreams, and was once shot in the back after giving a tip to the FBI.

The writer says while all this information is "a little off-track, and I'll be first to admit … is pretty wackadoodle, it's relevant".

It was this email that Powell forwarded to Fox host Bartiromo on November 7, who forwarded it to her producer before the interview where the Dominion theory was first discussed on the network.

Andersen Jones said the "troubling tangents" in the wackadoodle email could be key to Dominion's case if they can successfully argue that the host must have known that this was an unreliable source and inherently implausible claim.

"These are the sort of things that might be really powerful evidence that the host or the producers of the particular show on which Dominion claims to have been defamed, engaged with reckless disregard for the truth," she said.

In the summary judgement hearing, Fox's lawyers sought to downplay the email's significance.

Murphy said there was no evidence the host had based her questioning of Powell on the contents of the email, only that she had forwarded it along to her producer. 

Did money, viewers and Trump influence Fox's editorial decisions?

Another argument at the heart of Dominion’s case is the motivation behind Fox's editorial decisions.

In its original complaint, Dominion argued that after the election "viewers began fleeing Fox in favour of media outlets endorsing the lie that massive fraud caused President Trump to lose the election … so Fox set out to lure viewers back".

Documents obtained in the discovery period suggest senior staff were nervous about putting Trump and his supporters offside and concerned about losing viewers to far-right rivals, including cable network Newsmax.

A partially redacted text thread between Carlson, Ingraham and Sean Hannity sheds light on what the network stars were thinking.

When a reporter tweeted a "fact check" of Trump's voter fraud claims, Carlson texted the group saying: "Please get her fired. Seriously ... It's immeasurably hurting the company. The stock price is down. Not a joke."

In a separate conversation, Carlson texted his producer, warning: "With Trump behind it, an alternative like Newsmax could be devastating to us."

Fox News remains the most-watched cable news network in the US, according to primetime viewer numbers. (AP: Mark Lennihan)

Nielsen ratings were showing a huge bump in the little-known network's average prime-time audience in the period when its coverage was dedicated to Trump's campaign, election fraud claims and subsequent rallies.

Fox News dropped from first to third in terms of daily total viewers between election night and Biden's inauguration on January 20. This sort of dip has come to be expected for Fox after a Democratic presidential win.

But according to a Zoom call reviewed by the New York Times, Fox News director Suzanne Scott told employees on November 16:

"If we hadn't called Arizona those three or four days following election day, our ratings would have been bigger.

"The mystery would have been still hanging out there."

What's next for the trial and Murdoch's media empire?

The trial is set to begin on April 17 and will run for five weeks.

But summary judgements can often prompt parties to settle — an option they can take up at any time — and would mean the trial would be off and the details potentially kept secret.

If the trial does go ahead, it's sure to be a media spectacle.

The trial is set to begin on April 17, at the Superior Court in Wilmington, Delaware. (ABC News: Bradley McLennan)

The private communications of some of Fox's most popular personalities will be further pored over in front of a jury.

It's possible some of those same stars — Sean Hannity, Tucker Carlson and Laura Ingraham — and Rupert Murdoch himself could be called as witnesses.

"Judges prefer live testimony. If the people are available, I prefer live witnesses," Judge Eric Davis told the court in wrapping up the summary judgement hearing.

Fox has bounced back from its temporary ratings lull, and the corporation remains a highly profitable vehicle, making almost $3 billion last financial year.

But legal costs are mounting. Dominion wants $1.6 billion in damages, and it's not the only party intent on sending Fox the bill.

Abby Grossberg, a former producer on Bartiromo and Tucker's shows, filed a suit against the network last week claiming that she was coerced into giving misleading testimony in the Dominion lawsuit.

Fox is also preparing for another defamation case being brought by a separate electronic voting tech company, Smartmatic — this one for $US2.7 billion.

Smartmatic's case hinges on similar claims of defamation regarding its technology in the wake of the 2020 election.

David Cohen, the New York Supreme Court justice overseeing Smartmatic's suit, has so far determined that "at a minimum, Fox News turned a blind eye to a litany of outrageous claims".

And he has indicated that Smartmatic has enough evidence to "allow a jury to infer that Fox News acted with actual malice".

Meanwhile, Murdoch's eldest son and Fox Corporation CEO Lachlan, who features in Dominion's and Smartmatic's claims, has his own court date in Australia later this year. 

Lachlan Murdoch is suing Crikey News for defamation over a 2022 article describing the Murdoch family as "unindicted co-conspirators" in the US Capitol riot. (Reuters: Brendan McDermid)

He alleges a Crikey News article by political editor Bernard Keane defamed him in referring to his family as "unindicted co-conspirators" in the US Capitol riots.

Lawyers for Crikey's publisher have confirmed they are closely watching the Dominion case against Fox News and considering any implications it may have for their defence.

As the 45th president prepares for a possible indictment, his false claims of a stolen election will echo through the courts in the months to come.

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