Media coverage of the 2024 presidential election cycle has wrapped up, but claims tied to Fox News coverage of the election four years prior are still open, with the Delaware Court of Chancery denying a motion to dismiss filed by the network’s parent corporation.
The case consolidates a handful of complaints making similar claims against Fox Corp., the first of which was filed in April 2023, just after Fox agreed to settle a defamation case in another Delaware court for $787.5 million. The lead plaintiffs in the consolidated case are a group of New York City pension funds represented by Friedlander & Gorris, Cohen Milstein Sellers & Toll and Lieff Cabraser Heimann & Bernstein, along with Oregon, represented by the state’s Department of Justice.
Vice Chancellor J. Travis Laster wrote in a Friday opinion that the shareholder plaintiffs had shown Rupert Murdoch’s potential liability in the case prevented him from considering litigation independently and three Fox directors’ connections to Murdoch did the same based on Delaware’s demand futility standard. The shareholder plaintiffs claim Fox Corp.’s senior officers and directors at the time, including Rupert and Lachlan Murdoch, prioritized profits over compliance.
“A reasonable doubt exists about whether Lachlan (Murdoch) could make an independent decision about whether to sue his father,” the decision stated. “A reasonable doubt also exists about two other directors—Chase Carey and Jacques Nasser. The complaint alleges particularized facts about close and longstanding business and personal ties between them and Murdoch that are sufficient to disqualify them.”
Richards, Layton & Finger and Wachtell, Lipton, Rosen & Katz are defending Fox Corp. and its directors. A spokesperson and attorneys for Fox Corp. declined to comment on the opinion.
The events preceding the corporate decisions that are being challenged in the Chancery case date back to the days following the 2020 election, when Fox News hosts and guests repeatedly discussed Donald Trump’s claim that the election results had been tampered with, including allegations that Dominion Voting Systems and Smartmatic USA were involved in switching votes for Trump into votes for Joe Biden. Dominion manufactured voting machines used during the election, and Smartmatic produced the software for those machines.
Fox’s motion to dismiss claimed the shareholder plaintiffs didn’t have standing to pursue their case on behalf of the corporation. For that to be inaccurate, Laster wrote, the shareholders would need to show it’s plausible that at least four of Fox’s eight board members weren’t able to independently and disinterestedly consider a lawsuit. After determining that element of the court’s demand futility test had been met with respect to the Murdochs, Carey and Nasser, Laster did not write about whether the other five directors could be considered independent.
Dominion sued Fox News for defamation in early 2021 in Delaware Superior Court, and Smartmatic did the same in a New York state court. In April 2023, the day a trial on whether Fox News hosts had acted with actual malice against Dominion was scheduled to start, the parties agreed to settle the Superior Court case for $787.5 million. Smartmatic’s case in New York remains open, with discovery ongoing at the time of the Chancery decision. A judge has also denied a motion to dismiss that case.
While Fox hasn’t been successful in its motions to dismiss defamation actions at the state level, it has been in recent cases brought by individuals at the federal level, though those cases don’t involve Dominion, Smartmatic or any of the shareholder plaintiffs in the Chancery suit.
Most recently, in November, U.S. District Judge Jennifer L. Hall granted Fox’s motion to dismiss a District of Delaware case in which Ray Epps claimed he had been scapegoated by Fox News as a government plant responsible for instigating an insurrection on Jan. 6, 2021. The same day Laster denied dismissal of the Chancery case, Epps filed an amended complaint, and the court has scheduled a teleconference on Jan. 6, 2025, to address any deficiencies in that new filing.
In July, another federal judge in Delaware dismissed a defamation case brought against Fox by Nina Jankowicz, a disinformation expert and previous executive director of the Department of Homeland Security’s Disinformation Governance Board, which has been disbanded. Jankowicz has appealed the dismissal to the U.S. Court of Appeals for the Third Circuit, claiming in a Dec. 30 brief that the statements challenged in the case, which accused Jankowicz of promoting censorship, were false statements of fact subject to defamation claims.
