May 2023 Business Litigation Update

The recent settlement in the Dominion Voting Systems v. Fox News case has been making headlines in the legal and media worlds. As readers likely recall, following the 2020 U.S. Presidential election, Dominion became the subject of false claims by some media outlets and political figures alleging that the company’s machines were used to rig the election. One of the most vocal and prominent media outlets to make these claims was Fox News.

Dominion subsequently filed a $1.6 billion defamation lawsuit against Fox News, alleging that the network knowingly and maliciously spread false claims about the company’s products and integrity. The case was seen as a significant legal battle in the ongoing debate about media responsibility and accountability for spreading false information.

However, despite the anticipation surrounding the case going to trial, the Judge announced right before opening statements that the parties had settled, with Fox News paying Dominion $787.5 million. While the fact that the settlement occurred immediately prior to the trial getting under way added to the drama of the event, most cases of this nature do settle before reaching trial. As such, the settlement should not necessarily be viewed as a surprise, although the settlement payment by Fox News is substantial.

Besides avoiding the risk of trial, there was an added incentive for Fox News to settle – and it has to do with the “actual malice” standard established by the U.S. Supreme Court in the landmark defamation case of New York Times Co. v. Sullivan. This standard, which requires plaintiffs in certain defamation cases to prove that the defendant made false statements with “actual malice” – meaning the defendant knew the statement was false or made the statement with reckless disregard for the truth – is seen as a crucial protection for free speech and a free press. However, some legal scholars have argued that the standard has been misapplied or is too difficult to meet, leading to overly protective treatment of media outlets.

Commentators noted that if the Dominion case had gone to trial and a verdict rendered, there was a chance that the trial court judge or appellate court judges might revisit and reform the “actual malice” standard, which could have significant implications for media companies – like Fox News. By settling, Fox News avoided the risk of such a reform, and the standard remains intact.

Overall, the settlement in the Dominion Voting Systems v. Fox News case represents a data point in the ongoing debate about media responsibility and accountability, as well as the limits and protections of free speech and a free press in the U.S. We will continue to follow this story and keep you updated on any further developments as there are several additional lawsuits against Fox News currently pending.