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dominion lawsuit
NYC Pension Funds and State of Oregon Sue Fox Over Election Lies
"Defendants chose to invite robust defamation claims, with potentially huge financial liability and potentially larger business repercussions, rather than disappoint viewers of Fox News," the lawsuit reads in part.
Sep 13, 2023
The state of Oregon and New York City's pension funds filed a lawsuit against Fox Corporation Tuesday, arguing that the company allowed its Fox News channel to air falsehoods surrounding the 2020 election that put shareholders' investments at risk.
The lawsuit, which was filed in the Delaware Court of Chancery, is the most important shareholder action against the company since it settled a defamation suit for a record $787.5 million with Dominion Voting Systems in April. It also comes as experts had long warned the corporation it was leaving itself vulnerable to exactly these kinds of lawsuits by spreading lies that could lead to defamation claims, CNN reported.
"The board of Fox Corporation took a massive risk in pursuing profits by perpetuating and peddling known falsehoods," Oregon Attorney General Ellen Rosenblum said in a statement. "The directors' choices exposed themselves and the company to liability and exposed their shareholders to significant risks. That is the crux of our lawsuit, and we look forward to making our case in court."
"Fox's board of directors has blatantly disregarded the need for journalistic standards and failed to put safeguards in place despite having a business model that invites defamation litigation."
In the aftermath of the 2020 presidential election, both guests and hosts on Fox News repeated the false claim that former President Donald Trump had truly won the election and circulated conspiracy theories justifying this view, such as the lie that Dominion voting machines had swapped Trump votes to votes for President Joe Biden. The lawsuit argues that by catering to the desires of pro-Trump viewers, it failed in its duty to shareholders.
"Defendants chose to invite robust defamation claims, with potentially huge financial liability and potentially larger business repercussions, rather than disappoint viewers of Fox News," the lawsuit reads in part, according to The Associated Press.
Both New York City's pension funds and the state of Oregon have significant investments in Fox Corporation. The city pension funds had $28.1 million worth of shares at the end of July, while the state of Oregon had shares worth $5.2 million as of August 31, its Department of Justice said.
Neither plaintiff has specified an amount of damages, but New York City Comptroller and pension fund manager Brad Lander toldThe New York Times the city needed to "make the shareholders whole."
"Fox's board of directors has blatantly disregarded the need for journalistic standards and failed to put safeguards in place despite having a business model that invites defamation litigation," Lander said in a statement reported by CNN. "A lack of journalistic standards and a proper strategy to mitigate defamation has clearly harmed Fox's reputation and threatens their bottom line and long-term profitability."
Fox leadership did not comment to any major outlets on the lawsuit.
In addition to the Dominion suit, Fox has faced several other defamation claims, including an upcoming $2.7 billion lawsuit from election technology company Smartmatic and another from Ray Epps, a man from Arizona at the center of a conspiracy theory alleging he ran an FBI plan to instigate the riots at the Capitol on January 6, 2021.
Some groups argue that Fox News should face consequences beyond lawsuits. On July 3, the Media and Democracy project filed a petition with the Federal Communications Commission (FCC) to not renew the broadcast license for FOX 29 Philadelphia (WTXF-TV).
"As an FCC broadcast licensee FOX is bound to broadcast in the public interest, convenience, and necessity," the petitioners wrote. "Instead, it has repeatedly aired false information about election fraud, sowing discord in the country and contributing to harmful and dangerous acts on January 6, 2021."
Media experts and activists Steve Macek and Mitchell Szczepanczyk argued in a column that appeared at Common Dreams last week that the petition had merit.
"Although stripping an established TV station of its broadcast license may seem like an extreme measure," they said, "the Fox Corporation's record of malfeasance and its repeated betrayal of the public trust justifies the action in this case."
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Poetic Justice: On the Departure of Fox Hatemonger Tucker Carlson
The lifting of the veil on Carlson's true views of Trump and the MAGA movement is a major outcome of the Dominion settlement.
Apr 28, 2023
Things seemed hopeless for those wondering if Tucker Carlson ofFox News—who used his show to promote white supremacist hoaxes (Independent, 7/20/22) and degrading statements about immigrants (The Hill, 9/23/21)—would ever be held accountable for spewing hate on air. An advertiser exodus (New York Times, 6/18/20) and calls for his deplatforming from mainstream organizations (Anti-Defamation League, 5/25/22) seemed only to solidify the frozen-dinner heir's position as cable news' top-rated host. Last year, Carlson's show "averaged 3.32 million viewers, nabbing the biggest audience in cable news among viewers ages 25 to 54," according to the New York Post (4/24/23).
"He's the tent pole of the entire prime time line-up," said Reece Peck, author of Fox Populism: Branding Conservatism as Working Class. "He helps the other shows, people stay to watch after Tucker and before Tucker."
And in a flash, he was gone (NBC, 4/24/23). After Fox News settled with Dominion Voting Systems for nearly $800 million over the network's repeated lies about the company fixing the 2020 presidential election for Joe Biden, I noted (FAIR.org, 4/20/23) that the last-minute agreement was still a form of accountability for the network, even if the settlement sum was half of what Dominion sought. (Carlson's departure took $700 million from Fox's stock value in the 30 minutes after it was announced. The stock recovered somewhat, but was still down half a billion dollars at the closing bell.)
Done in by Dominion?
Indeed, the damaging discovery process preceding the trial date might have done Carlson in. The Washington Post (4/24/23) reported that "it was Carlson's comments about Fox management, as revealed in the Dominion case, that played a role in his departure from Fox, a person familiar with the company's thinking told the Post."
Dominion said Carlson's departure was not a condition of the settlement, according to the LA Times(4/24/23), but the paper did say that Carlson's comments "that turned up in the discovery process for the case may have also played a role in" his departure.
The LA Times also said that sources within Fox said that Carlson's departure is related to a separate, hostile work environment lawsuit brought by his former head of booking, Abby Grossberg, who alleges "that male producers regularly used vulgarities to describe women and frequently made antisemitic jokes" (New York Times, 4/24/23).
The texts exposed Carlson for who he is, a pompous, rich media elitist who gives not one single damn about MAGA voters and hates their king.
The discovery process of the Dominion case revealed numerous texts from Carlson—whose entire persona at Fox News rests on the wave of the Make America Great Again movement—showing his intense dislike of Donald Trump (New York Times, 3/8/23). "What [Trump is] good at is destroying things" was among one of the key texts, but everyone's favorite, of course, is Carlson saying of Trump, "I hate him passionately."
No, Carlson's on-air racism (Independent, 4/13/21; ADL, 4/22/21), transphobia (New York Post, 12/28/22), xenophobia (Washington Post, 12/15/18), admiration for authoritarians (FAIR.org, 8/3/21, 10/20/21), and flirtations with antisemitism (Daily Beast, 10/11/22, 12/23/22) were never the problem for Fox News. If The Washington Post's report that the Dominion texts were definitive is true, it's poetic justice: The texts exposed Carlson for who he is, a pompous, rich media elitist who gives not one single damn about MAGA voters and hates their king, only cynically using Trump's political popularity for his own media grift. That lifting of the veil, the end of the conceit for a corporation whose entire modus operandi is disguising its ruling-class politics to sell faux populism to its viewers, is a major outcome of the Dominion settlement.
Off to the gold mine
But what is to become of Carlson? Surely he won't drift quietly off into obscurity. The right-wing media machine, with its growing community of news sites, podcasts, and Substack newsletters, is a gold mine for anyone who can draft a sentence linking any conservative grievance to the word "wokeness." Carlson sold his stake in the Daily Caller (New York Times, 6/10/20), the news site he helped found, but the possibilities for rehabilitation are seemingly endless.
Bill O'Reilly once reigned as the star of Fox News until his ouster due to sexual harassment accusations (New York Times, 4/19/17), and today he is but a mere afterthought. But he was an aging relic before an explosion in Trump-fueled media. Today, a fresh-faced Carlson, still an emblem of MAGA rage, has the world as his oyster where he could perform untethered by corporate restraints, although without as much reach as cable news.
"His star will never shine as bright as it did at Fox."
"It's not beyond the realm of possibility that he could reinvent himself, but I think Fox is center stage, everything flows from its framing, from its agenda-setting, and it has the most influence over Republican politicians," Peck said. "Even with Newsmax and [One America News Network], it's really hard to match the respectability you get from being on a cable dial."
"His star will never shine as bright as it did at Fox," he said.
Fox is going to survive, valuing the audience that made the network what it is today, even if a little less hate is going to be pumped onto the mainstream American airwaves at primetime. "Fox has survived the loss of its biggest stars before," Peck said.
But Carlson's departure is a reminder that while the fight against Fox's worst hatemonger often seemed fruitless, the Goliaths are, in fact, vulnerable.
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Democracy Lost: Dominion v. Fox
While Dominion walked away with $787.5 million, Fox preserved a lucrative business model based on telling people the lies they want to hear.
Apr 26, 2023
Both parties to the litigation won.
Staple Street Capital, a New York-based private-equity firm, is in the business of maximizing the return on its clients' investments. In 2018, it bought a 76% interest in Dominion Voting Systems for $38.3 million. Five years later, Fox's $787.5 million payout represented a staggering gain.
Fox News makes money by telling its audience what it wants to hear, even if Fox knows it's a lie. The settlement preserves its lucrative business model.
Democracy lost.
Panic at the Top
In the run-up to the election, Fox enjoyed historic ratings and revenues. But a momentous election night decision put everything at risk. A small sample of Fox's internal communications tells the story–and the public probably hasn't seen the most damning ones.
November 3, 2020, 11:20 pm: Foxbecame the first network to announce that Joe Biden had won Arizona–a disastrous development for Donald Trump's re-election prospects. The Trump campaign was livid. On behalf of Bill Sammon's Decision Desk team, Fox News politics editor Chris Stirewalt went on live television, defending the call to skeptical on-air hosts Tucker Carlson and Bret Baier.
Fox soon began hemorrhaging viewers in the far-right audience it had cultivated for decades.
November 11: Raj Shah, Fox Corp.'s senior vice president and Trump's former White House deputy press secretary, warned company leaders that "bold, clear, and decisive action is needed for us to begin to regain the trust that we're losing with our core audience." Two days later, he wrote to Rupert Murdoch's son, Lachlan, that "Fox News is facing a brand crisis" and "open revolt… precipitous decline in Fox's favorability among our core audience… poses lasting damage to the Fox News brand unless effectively addressed soon."
In another email, Shah told colleagues that the network's brand was "under heavy fire from our customer base." In yet another, he wrote, "We are not concerned with losing market share to CNN or MSNBC right now. Our concern is Newsmax and One America News Network …."
Lying as a Corporate Strategy
November 12: Fox reporter Jacqui Heinrich fact-checked a Trump tweet that referred to Fox's broadcasts. She said that there was no evidence of voter fraud from Dominion voting machines. In a text chain with Fox hosts Sean Hannity and Laura Ingraham, Tucker Carlson wrote, "Please get her fired. It needs to stop immediately, like tonight. It's measurably hurting the company. The stock price is down. Not a joke."
November 13: The "Brain Room"–Fox's fact-checking and research division–concluded that claims about Dominion voting machines were "100% false. Dominion systems continue to reliably and accurately count ballots, and state and local election authorities, as well [as] fact-checkers, have publicly confirmed the integrity of the process."
Fox on-air hosts ignored it.
November 16: In a Zoom meeting, Fox News CEO Suzanne Scott said, "Listen, it's one of the sad realities: 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."
Fox could not afford a similar misstep in the upcoming Georgia runoff for control of the U.S. Senate. Scott decided to push out Sammon and Stirewalt.
Elevating Lies and Eliminating Truth-Tellers
November 18: In an email exchange with Laura Ingraham, Tucker Carlson complained about Trump attorney Sidney Powell, whose on-air election lies had pervadedFox programs since November 8:
"Sidney Powell is lying by the way," Carlson wrote. "I caught her. It's insane."
"Sidney is a complete nut," Ingraham answered. "No one will work with her. Ditto with Rudy."
"Our viewers are good people and they believe it," Carlson said, making clear that he did not.
But Fox hosts did continue working with Powell and Rudy, promoting repeatedly what the judge in the Dominion case later ruled were "CRYSTAL clear" lies.
November 19: Giuliani held his infamous "dripping hair dye" press conference. Internally, Rupert Murdoch called it "Really crazy stuff. And damaging." And he told Suzanne Scott, "Terrible stuff damaging everybody, I fear. Probably hurting us too." Likewise, Shah texted that Giuliani sounded "SO F*CKING CRAZY."
But when Fox News White House correspondent, Kristin Fisher, fact-checked Giuliani on-air immediately following the conference, her boss complained:
"He expressed his great unhappiness with my live shot. He emphasized that higher-ups at Fox News were also unhappy with it. And he told me that I needed to do a better job of respect—this is a quote—'respecting our audience.'" Fisher thought she had respected the audience by telling it truth.
Likewise, Shah recoiled at Fisher's fact-checking: "This is the kinda shit that will kill us. We cover it wall to wall and then we burn that down with all the skepticism."
"What I see us doing is losing the silent majority of viewers as we chase the nuts off a cliff."
November 20: Rupert Murdoch emailed Suzanne Scott, "Maybe best to let Bill [Sammon] go right away and make acting appointment. Also the other guy… be a big message with Trump people."
"We were going to do Stirewalt next," Scott responded.
Early December: "This has to stop now," Scott wrote in an email to a network vice-president, referring to anchor Eric Shawn's fact-checking of Trump's bogus voter-fraud claim. "This is bad business and there clearly is a lack of understanding what is happening in these shows. The audience is furious and we are just feeding them material. Bad for business."
December 2: Bill Sammon wrote to Chris Stirewalt: "More than 20 minutes into our flagship evening news broadcast and we're still focused solely on supposed election fraud—a month after the election. It's remarkable how weak ratings makes good journalists do bad things. In my 22 years affiliated with Fox, this is the closest thing I've seen to an existential crisis—at least journalistically."
Stirewalt responded: "What I see us doing is losing the silent majority of viewers as we chase the nuts off a cliff."
January 2021: Sammon announced his retirement. Foxlaid off Stirewalt in what it called a "post-election restructuring."
Protecting Rupert Murdoch
Less than two weeks before trial, the judge in the case ruled that Dominion could force Rupert Murdoch to testify at trial. Dominion planned to call him as its second witness. His internal communications about Giuliani, as well as Sammon and Stirewalt, were devastating.
But there were more:
January 12, 2021: In an email exchange with Fox board member and former House Speaker Paul Ryan (R-Wis.), Murdoch said that the January 6 insurrection was a "[w]ake up call for Hannity, who has been privately disgusted by Trump for weeks, but was scared to lose viewers!"
"Trump insisting on the election being stolen and convincing 25% of Americans was a huge disservice to the country. Pretty much a crime."
January 20: Murdoch mused about the impact of Trump's lying: "The more I think about McConnell's remarks or complaint, the more I agree. Trump insisting on the election being stolen and convincing 25% of Americans was a huge disservice to the country. Pretty much a crime. Inevitable it blew up January 6th."
January 21: Murdoch sent a message to Suzanne Scott: "Is it 'unarguable that high profile Fox voices fed the story that the election was stolen and that January 6 an important chance to have the result overturned'? Maybe Sean [Hannity] and Laura [Ingraham] went too far… All very well for Sean to tell you he was in despair about Trump … but what did he tell his viewers?"
Fox executives responded with 50 examples of the "high profile Fox voices" that had fed Trump's Big Lie.
Fox's Predicament Worsened
A week after Murdoch was ordered to testify at trial, Fox had a new problem. Its attorneys had repeatedly misrepresented his status. They had told the court that he was not an officer of Fox News when, in fact, he was its executive chairman. The judge said that he would sanction Fox News and launch an investigation into what other material it had failed to disclose.
Now Fox's lawyers had skin in the game too.
What had Fox withheld? We'll never know. But during Dominion's opening statement to the jury, it planned to present additional internal Fox communications publicly for the first time.
Dominion Won Too
As discovery in Dominion's defamation case against Fox proceeded, its claims became surprisingly strong, but significant obstacles to any recovery remained. Juries can produce unexpected results; damages are always a question mark; appeals can drag on for years. Declining a certain $787.5 million would have been like trading a winning Powerball ticket worth the sixth largest jackpot in history for a future one that might be worthless.
Democracy Lost
Dominion's attorney suggested that the settlement benefited the public: "Trust matters. Lies have consequences… Today's settlement of $787.5 million represents vindication and accountability."
Then Fox issued a public statement that proved him wrong. It sounded like doublespeak from George Orwell's 1984: "This settlement reflects Fox's continued commitment to the highest journalistic standards."
The only lesson Fox learned is that when it knowingly pushes lies, their employees shouldn't create an electronic trail proving it. The settlement is just another cost of doing business–less than 20% of Fox Corp.'s cash on hand and less than half of its net income for 2022. And it's tax-deductible! Fox plans a massive increase in cable and satellite provider fees that will more than offset the payment.
In 1789, Thomas Jefferson wrote that "wherever the people are well informed they can be trusted with their own government."
Fox's business model is antithetical to Jefferson's vision. It makes billions by challenging the nation with an existential question:
Can democracy die from too many lies?
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