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      What Next for Dominion After Its $787.5 Million Fox Settlement

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      The election technology company has several more defamation lawsuits pending against public figures and news outlets.Dominion Voting Systems did more on Tuesday than settle its lawsuit against Fox News for $787.5 million: It also set the tone for the many related defamation cases it has filed. Legal experts say the settlement with Fox News, one of the largest defamation payouts in American history, could embolden Dominion as it continues to defend its reputation, which it says was savaged by conspiracy theories about vote fraud during the 2020 election. The company has several cases pending against public figures including Mike Lindell, the MyPillow executive, and news outlets such as Newsmax.The targets of Dominion’s remaining lawsuits, few of which have deep pockets and legal firepower at Fox’s level, will likely take a cue from Dominion and Fox’s face-off, legal experts said.“Even though it was a settlement, it certainly was a victory for Dominion,” said Margaret M. Russell, a law professor at Santa Clara University. “For other possible defendants, I don’t think this will make them double down; it will make them fearful.”Dominion is the second-largest election technology company operating in the United States, where there are few other major players. The company, whose majority owner is the private equity firm Staple Street Capital, was made “toxic” by the false fraud narratives in 2020, one of Staple Street’s founders said in court documents. At one point, Dominion estimated that misinformation cost it $600 million in profits.Fox said in its court filings that Dominion did not have to lay off employees, close offices or default on any debts, nor did it suffer any canceled business contracts as a result of the news network’s coverage. Fox said in one filing that Dominion had projected $98 million in revenue for 2022, which would make Tuesday’s settlement the equivalent of eight years of sales.Dominion’s customers are largely officials who oversee voting in states and counties around the country; the company served 28 states, as well as Puerto Rico, in the 2020 election. The false stories about fraud that were directed at the company were embraced by some local election officials.In court documents, an expert enlisted by Dominion said that the company had very low early contract termination rates and very high contract renewal rates before the 2020 election, but blamed the preoccupation with the false fraud claims for prompting some clients to exit deals after the vote.Now, Dominion has emerged from its tussle with Fox in a stronger position to win back any skittish clients or score new business, legal experts said.Last month, the judge in Dominion’s case against Fox reviewed evidence of the false claims and wrote that it “is CRYSTAL clear that none of the statements relating to Dominion about the 2020 election are true,” effectively confirming that the company was aboveboard.The secretary of state of New Mexico, Maggie Toulouse Oliver, applauded Tuesday’s settlement.“The harm done by election lies/denialism since 2020 is immeasurable, but this settlement against Fox News provides accountability & sends a strong message we’re happy to see,” Ms. Toulouse Oliver wrote on Twitter. During the midterm primaries last year, she blamed “unfounded conspiracy theories” when she sued officials in Otero county who had cited concerns about Dominion machines in their refusal to certify election results.Fox acknowledged in a statement on Tuesday that some of the claims it had made about Dominion were false, saying that the admission “reflects Fox’s continued commitment to the highest journalistic standards.”John Poulos, Dominion’s founder and chief executive, said in a statement on Tuesday that Fox caused “enormous damage” to his company and “nothing can ever make up for that.” He also thanked the election officials who make up Dominion’s clientele, and nodded to Staple Street’s support. “Lies have consequences,” a lawyer for Dominion Voting Systems said during a news conference.Pete Marovich for The New York TimesDominion drew some complaints that by settling, it had given up the opportunity to extract an apology from Fox or force it through a potentially embarrassing trial. An opinion article in the Daily Beast bemoaned that the voting technology company had “decided to step out of the ring with a bag of money instead of vanquishing one of the country’s most destructive and influential peddlers of hate and disinformation.”Mr. Poulos called the settlement “a big step forward for democracy” in an interview with ABC News broadcast on Wednesday.Legal experts noted that even if Dominion had prevailed in a jury verdict, it would have risked years of expensive battles over appeals from Fox.“The tort of defamation is not about saving democracy from liars,” said Enrique Armijo, a professor and First Amendment expert at Elon University School of Law. “It’s about saving the reputation of the people who have been lied about and making those liars compensate them for the harms to their reputations.”Fox still faces other legal challenges, including a $2.7 billion defamation lawsuit from another election technology company, Smartmatic. Fox said it planned to defend freedom of the press in the case and called Smartmatic’s damages claims “outrageous, unsupported and not rooted in sound financial analysis.” Smartmatic said in a statement that, after the Dominion settlement, it “will expose the rest” of the “misconduct and damage caused by Fox’s disinformation campaign.”Dominion, too, has more cases pending, including against the pro-Trump lawyer Rudolph W. Giuliani and One America News Network. Although the lawsuits involve similar false claims of election fraud, the facts of each case vary, experts said.Attorneys for Mr. Lindell and Mr. Giuliani did not immediately respond to requests for comment, nor did Newsmax or OAN.For the individuals and smaller companies facing legal claims, for whom a substantial jury judgment could be an “existential” threat, settlement may seem more attractive after Tuesday, Mr. Armijo said.“They’re not going to be able to put up the same level of defense that Fox did; they just don’t have the resources to do it,” he said. “It’s hard to see the other defamation defendants in the remaining cases getting any further than Fox did, which, as we saw, is not very far.” More

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      Analysis: Fox News’s $787.5 Million Settlement Is the Cost of Airing a Lie

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      Fox News’s late-stage agreement with Dominion Voting Systems came with a rare acknowledgment of broadcasting false claims by the conservative media powerhouse.In settling with Dominion Voting Systems, Fox News has avoided an excruciating, drawn-out trial in which its founding chief, Rupert Murdoch, its top managers and its biggest stars would have had to face hostile grilling on an embarrassing question: Why did they allow a virulent and defamatory conspiracy theory about the 2020 election to spread across the network when so many of them knew it to be false?But the $787.5 million settlement agreement — among the largest defamation settlements in history — and Fox’s courthouse statement recognizing that the court had found “certain claims about Dominion” aired on its programming “to be false” — at the very least amount to a rare, high-profile acknowledgment of informational wrongdoing by a powerhouse in conservative media and America’s most popular cable network.“Money is accountability,” Stephen Shackelford, a Dominion lawyer, said outside the courthouse, “and we got that today from Fox.”During a news conference, a lawyer for Dominion Voting Systems said, “lies have consequences.”Pete Marovich for The New York TimesThe terms of the agreement, which was abruptly announced just before lawyers were expected to make opening statements, did not require Fox to apologize for any wrongdoing in its own programming — a point that Dominion was said to have been pressing for.Shortly after the agreement was reached, Fox said it was “hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues.”The settlement carries an implicit plea of “no contest” to several pretrial findings from the presiding judge in the case, Eric M. Davis, that cast Fox’s programming in exceptionally harsh light. In one of those findings, the judge sided with Dominion in its assertion that Fox could not claim that its airing of the conspiracy theory — generally relating to the false claim that its machines “switched” Trump votes into Biden votes — fell under a legally protected status of “news gathering” that can shield news organizations when facts are disputed. The judge wrote, “the evidence does not support that FNN conducted good-faith, disinterested reporting.”In another finding, the judge wrote that the “evidence developed in this civil proceeding demonstrates that is CRYSTAL clear that none of the statements relating to Dominion about the 2020 election are true.”Through those findings, the judge seriously limited Fox’s ability to argue that it was acting as a news network pursuing the claims of a newsmaker, in this case, the president of the United States, who was the lead clarion for the false Dominion narrative.In those heady days before the first day of trial, Fox had been indicating that if it were to lose at trial, it would work up an appeal that would, at least partly, argue with those judicial rulings. Now they stand undisputed. By the end of the day on Tuesday, it was clear that Fox’s lawyers were engaged in an urgent calculus to take the financial hit rather than risk losing at trial. As so many legal experts before the trial had argued, Dominion had managed to collect an unusual amount of internal documentation from Fox showing that many inside the company knew the Dominion election conspiracy theory was pure fantasy. That extended to the network’s highest ranks — right up to Mr. Murdoch himself.Rupert Murdoch and his lieutenants could have faced a drawn-out trial that would have forced them to acknowledge why they broadcast conspiratorial claims that knew to be false.Mary Altaffer/Associated PressThat evidence appeared to bring Dominion close to the legal threshold in defamation cases known as “actual malice” — established when defamatory statements are “made with knowledge of its falsity or with reckless disregard of whether it was true or not.” (That bar, however, is not always easy to meet, and there are no guarantees in front of a jury.)“Dominion Voting had elicited much critical evidence that Fox had acted with actual malice or reckless disregard for the truth, which it could have proved to a jury, so the only question remaining would have been damages,” said Carl Tobias, a law professor at the University of Richmond. “Trial of the case also might have undermined the reputation of Fox when the evidence was presented in open court.”It was less surprising that Fox settled than that it did so at such a late stage on Tuesday. A trial would have seen Fox News personnel and Mr. Murdoch parrying with lawyers over the knowledge of falsity they held and why they did not take any action to stop it. The answers would have further unmasked the internal modus operandi of an organization that has long guarded its internal operations.The one question that only time will answer is whether the settlement was enough to cause Fox News to change the way it handles such incendiary and defamatory conspiracy content. The amount is huge — $787.5 million. Fox News certainly doesn’t want to see a similar settlement anytime soon as other legal cases loom, notably a $2.7 billion suit from another election technology company, Smartmatic.But Fox did manage to escape Dominion’s goal of an on-air admission or apology, meaning it did not have to force either on its audience, which did not hear much about the case on Fox’s shows to begin with.“It’s hard to say how damaging a decision against Fox would have been for the company beyond the financial cost of the verdict because their audience is very loyal and bought into the polarized perspective their opinion hosts present,” Michelle Simpson Tuegel, a trial lawyer, said in a statement. “But the reputational harm of having executives, including Chairman Rupert Murdoch, and hosts take the stand seems to have moved the parties towards a resolution.” More

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      Atlanta Prosecutor Seeks Removal of Lawyer in Trump Case

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      The lawyer represents 10 Georgia Republicans who were part of a plan to reverse the results of the 2020 presidential election and keep Donald J. Trump in power.The lead prosecutor investigating election interference by former President Donald J. Trump and his allies in Georgia filed a motion on Tuesday accusing two defense lawyers ​​in the case of misconduct. The prosecutor, Fani T. Willis, the district attorney of Fulton County, Ga., sought to have one of the lawyers, Kimberly B. Debrow, thrown off the proceedings.Ms. Debrow represents 10 Georgia Republicans who were part of a bogus slate of electors for Mr. Trump under a broader plan to reverse the results of the 2020 presidential election and keep him in power. According to the motion, some of the electors recently told prosecutors that Ms. Debrow and another attorney, Holly Pierson, had not informed them of offers of immunity in exchange for cooperation that were made last year.The filing noted that Ms. Pierson had previously told the court that she and Ms. Debrow had spoken to their clients about potential immunity offers, but that “none of their clients were interested.”Ms. Pierson represents David Shafer, the head of the Georgia Republican Party, who served as one of the fake electors. She and Ms. Debrow, who are being paid by the state party, had originally represented 11 electors until a judge forced them to separate Mr. Shafer from the other 10. In a statement, Ms. Pierson said that Ms. Willis’s allegations of misconduct were “entirely false,” adding that the court “already has documents in its possession” that prove it.“Sadly, the D.A.’s office continues to seem more interested in media attention, trampling on the constitutional rights of innocent citizens and recklessly defaming its perceived opponents, than in the facts, the law or the truth,” Ms. Pierson’s statement said.Ms. Willis’s office has spent more than two years investigating whether the former president and his allies illegally interfered with Georgia’s 2020 election, and is expected to seek indictments next month. It was not immediately clear if the latest development could delay the timetable.A special grand jury that heard evidence in the case for roughly seven months recommended more than a dozen people for indictments, and its forewoman strongly hinted in an interview with The New York Times this year that Mr. Trump was among them.Central to the investigation are the steps that Trump allies and state party officials took to assemble a group of 16 pro-Trump electors in December 2020, who then submitted bogus slates of Electoral College votes for Mr. Trump in hopes of reversing the election’s outcome in the state. Mr. Trump was directly involved in such efforts, which also took place in a number of other swing states, and called the head of the Republican National Committee, Ronna McDaniel, to seek her assistance, according to Ms. McDaniel’s testimony to the House committee that investigated the Jan. 6, 2021, attack on the U.S. Capitol.At least one of the electors not represented by Ms. Debrow or Ms. Pierson has an immunity deal in place and has cooperated with the prosecution, people with knowledge of the case have said.Ms. Willis’s new motion comes as other electors are seeking immunity deals, with indictment decisions looming. According to a legal analysis by the Brookings Institution, the fake electors could potentially face criminal liability for interfering with elections, among other charges.Ms. Willis has indicated that she may bring broader state racketeering or conspiracy charges, which could apply to some of the bogus electors and a number of other people, including Mr. Trump, who were involved in several schemes to overturn the Georgia results.The filing on Tuesday indicates that Ms. Willis’s office is still actively investigating, even though the special grand jury completed its work in January. During recent discussions with prosecutors, some of the fake electors represented by Ms. Debrow claimed that another elector, whom she also represents, broke the law, but that they themselves “were not party to these additional acts,” according to the new filing.The fact that Ms. Debrow is representing people who are making accusations against another of her clients amounts to an untenable conflict, the district attorney’s office said.“Ms. Debrow’s continued participation in this matter is fraught with conflicts of interest that rise to the level of her being disqualified from this case in its entirety,” the filing said.During their recent discussions with some of the fake electors, investigators in Ms. Willis’s office were told “that no potential offer of immunity was ever brought” to those electors last year, despite assurances to the court by Ms. Pierson.Clark D. Cunningham, a law professor and ethics specialist at Georgia State University who has been following the case closely, said that if the conduct described in the filing did take place, “that’s the kind of conduct that can get a lawyer disbarred.”Ms. Debrow, in a statement late Tuesday, called the motion “baseless, false and offensive.”“None of my clients have committed any crimes, and they necessarily have not implicated themselves or each other in any crimes,” she said.Last year, Ms. Debrow and Ms. Pierson together represented the 10 electors and Mr. Shafer until Judge Robert C.I. McBurney of Fulton County Superior Court, who is handling the case, decided that Mr. Shafer needed separate counsel. Mr. Shafer has been informed that he is among the targets of the investigation who could face criminal charges, according to people with knowledge of the case.Mr. Trump’s legal team, in a filing in March, assailed the special grand jury proceedings as “confusing, flawed and, at times, blatantly unconstitutional.”The Atlanta case is not the only legal issue Mr. Trump faces. Earlier this month, the former president pleaded not guilty in Manhattan to 34 felony counts of falsifying business records, in a case tied to his role in a hush-money payment to the porn star Stormy Daniels. He is also under investigation by Jack Smith, a special counsel appointed by Attorney General Merrick B. Garland, for his role in the events leading up to the Jan. 6 attack on the Capitol and retaining sensitive government documents at his home in Florida. More

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      Fox Will Pay $787.5 Million to Settle Dominion Defamation Suit

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      The settlement with Dominion Voting Systems was the latest extraordinary twist in a case that exposed the inner workings of the most powerful voice in conservative news.Fox News abruptly agreed on Tuesday to pay $787.5 million to resolve a defamation suit filed by Dominion Voting Systems over the network’s promotion of misinformation about the 2020 election, averting a lengthy and embarrassing trial just as a packed courtroom was seated in anticipation of hearing opening statements.The settlement, one of the largest ever in a defamation case, was the latest extraordinary twist in a case that has been full of remarkable disclosures that exposed the inner workings of the most powerful voice in conservative news.In addition to the huge financial price, Dominion exacted a difficult admission from Fox News, which acknowledged in a statement that “certain claims” it made about Dominion were false.“The truth matters. Lies have consequences,” Justin Nelson, a lawyer for Dominion, said outside Delaware Superior Court on Tuesday.“Lies have consequences,” a lawyer for Dominion Voting Systems said during a news conference.Pete Marovich for The New York TimesNews of the 11th-hour agreement stunned the full courtroom in Wilmington, where the case was being heard. Gasps filled the air when Judge Eric M. Davis told the jury shortly before 4 p.m. that the two parties had resolved the matter. Lawyers for both sides had been preparing to speak to the jury for the first time, microphones clipped to their jacket lapels.The settlement spares Fox a trial that would have gone on for weeks and put many of the company’s most prominent figures — from the media mogul Rupert Murdoch to hosts like Tucker Carlson and Maria Bartiromo — on the stand.The case held the potential to make public a stream of damaging information about how the network told its audience a story of fraud and interference in the 2020 presidential election that many of its own executives and on-screen personalities did not believe. And the network was not forced to apologize — a concession that Dominion lawyers had sought, lawyers involved in the case said.Dominion sued two years ago, after Fox aired false stories claiming that Dominion’s voting machines were susceptible to hacking and had flipped votes from President Donald J. Trump to Joseph R. Biden Jr. On Tuesday, the company expressed a sense of exoneration about the large financial cost that Fox will have to pay. While Dominion’s suit asked for damages of $1.6 billion, almost double the settlement figure, the company will avoid many years of appeals that could have trimmed or eliminated any payout from a trial.“Over two years ago, a torrent of lies swept Dominion and election officials across America into an alternative universe of conspiracy theories causing grievous harm to Dominion and the country,” Mr. Nelson said. “Today’s settlement of $787.5 million represents vindication and accountability.”The case and the expected trial were significant because they raised the prospect for an elusive judgment in the post-Trump era: Very few allies of the former president’s have been held legally accountable for their roles in spreading the falsehoods that undermined confidence in the country’s democratic process and cast Mr. Biden’s victory as illegitimate. Polls show that large numbers of Republicans still believe the 2020 election was tainted.The size of the settlement, experts said, seems to have little precedent. RonNell Andersen Jones, a professor of law at the S.J. Quinney College of Law at the University of Utah, said she believed it was one of the largest settlements in a defamation case ever.“This was unquestionably the strongest defamation case we’ve ever seen against a major media company,” Ms. Andersen Jones said. The case was even more unusual, she added, because media companies typically seek to settle well before so much damaging information about their internal workings is released.A deal came together at the last possible minute, after months of almost no serious discussion between the two sides. As the case proceeded, Dominion divulged extraordinary details about the doubts that Fox employees expressed privately about voter fraud claims, even as they struck a different tone on the air.“Settlement before this trove of evidence became public would of course have been in Fox’s best interest,” Ms. Andersen Jones said. “Waiting until the eve of trial, when the whole nation had a chance to focus on what Fox said internally about Trump, its sources and its own viewers, gave Dominion the extra layer of accountability it was seeking.”It is uncommon for defamation suits to get to trial, in part because the bar for proving “actual malice” — the legal standard that requires plaintiffs to show that defendants knew what they were saying was a lie, or had a reckless disregard for the truth — is so high. It is rarer yet for one to feature the volume of evidence that Dominion had amassed against Fox.In the run-up to trial, Dominion publicly released reams of internal communications among Fox executives, hosts and producers that revealed how the country’s most-watched cable news network set in motion a strategy to win back viewers who had tuned out after Mr. Trump’s loss. The messages tell the story of a frantic scramble inside Fox as it started losing audience share to competitors, like Newsmax, that were more willing to report on and endorse false claims about a plot involving Dominion machines to steal the election from Mr. Trump.Producers referred to pro-Trump guests like Sidney Powell and Rudolph W. Giuliani as “gold” for ratings and acknowledged that the audience didn’t want to hear about subjects like the possibility of a peaceful transition from a Trump administration to a Biden administration.Those communications have shown how employees at Fox expressed serious doubts about and, at times, were scornful of Mr. Trump and his allies as they spread lies about voter fraud, questioning the legitimacy of Mr. Biden’s election. Some at Fox mocked Mr. Trump and his lawyers as “crazy” and under the influence of drugs like L.S.D. and magic mushrooms.Some Fox hosts privately described their colleagues as “reckless” for endorsing Mr. Trump’s false claims, acknowledging that there was “no evidence” to back them up. Yet for weeks, Fox continued to give a platform to election deniers, despite doubts about their credibility. Dominion challenged statements made on multiple programs on multiple nights. Typically, defamation cases involve only a single disputed statement.The trial would have been a spectacle. Mr. Murdoch, whose family controls the Fox media empire, was slated to be one of Dominion’s first witnesses this week. Star anchors including Sean Hannity, Mr. Carlson and Ms. Bartiromo were likely to be called at other points.Even the most blockbuster media trials of the last generation — Ariel Sharon’s suit against Time and Gen. William C. Westmoreland’s against CBS, both in the 1980s — lacked the most explosive elements of this case, which raised weighty questions about the protections the First Amendment affords the media and whether one of the most influential forces in conservative politics would have to pay a price for amplifying misinformation.Both of those cases were settled out of court, too.In recent days, Fox raised questions about Dominion’s claims of damages. On Monday, it disputed Dominion’s worth, pointing to a recent legal filing in which the company lowered part of its request for compensation. Fox lawyers also raised doubts about the harm that Dominion had suffered, saying the company acknowledged that it had turned a profit in recent years.But the potential pitfalls for proceeding with a trial were real for Fox. Some of the revelations from the depositions that Dominion had conducted offered a preview of how damaging a trial could be. Mr. Murdoch acknowledged during his deposition that some Fox hosts had “endorsed” Mr. Trump’s lies, an admission that undercut Fox’s defense that it was merely reporting on — not amplifying — the former president’s claims.After the deposition concluded, the general counsel of Fox Corporation, Viet Dinh, tried to reassure Mr. Murdoch that he had done well.“I’m just going to say it. They didn’t lay a finger on you,” Mr. Dinh said.Mr. Murdoch disagreed, according to a person who witnessed the exchange. He pointed a finger at the lawyer who had questioned him for Dominion, Mr. Nelson, and said, “I think he would strongly disagree with that.”To which Mr. Nelson replied, “Indeed, I do.” More

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      Another Texas Election Official Quits After Threats From Trump Supporters

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      Heider Garcia, the top election official in deep-red Tarrant County, had previously testified about being harassed by the former president’s right-wing supporters.Heider Garcia, the head of elections in Tarrant County, Texas, announced this week that he would resign after facing death threats, joining other beleaguered election officials across the nation who have quit under similar circumstances.Mr. Garcia oversees elections in a county where, in 2020, Donald J. Trump became only the second Republican presidential candidate to lose in more than 50 years. Right-wing skepticism of the election results fueled threats against him, even though the county received acclaim from state auditors for its handling of the 2020 voting. Why it’s importantWith Mr. Trump persistently repeating the lie that he won the 2020 election, many of his supporters and those in right-wing media have latched on to conspiracy theories and joined him in spreading disinformation about election security. Those tasked with running elections, even in deeply Republican areas that did vote for Mr. Trump in 2020, have borne the brunt of vitriol and threats from people persuaded by baseless claims of fraud.The threats made against himMr. Garcia detailed a series of threats as part of his written testimony last year to the Senate Judiciary Committee, which he urged to pass better protections for election officials.One of the threats made online that he cited: “hang him when convicted from fraud and let his lifeless body hang in public until maggots drip out his mouth.”He testified that he had repeatedly been the target of a doxxing campaign, including the posting of his home address on Twitter after Sidney Powell, a lawyer for Mr. Trump, falsely accused him on television and social media of manipulating election results.Mr. Garcia also testified that he received direct messages on Facebook with death threats calling him a “traitor,” and one election denier used Twitter to urge others to “hunt him down.”Heider Garcia’s backgroundMr. Garcia, whose political affiliation is not listed on public voting records, has overseen elections in Tarrant County since 2018. Before that, he had a similar role outside Sacramento in Placer County, Calif.He did not immediately respond to a request for comment on Tuesday.Election deniers have fixated on Mr. Garcia’s previous employment with Smartmatic, an election technology company that faced baseless accusations of rigging the 2020 election and filed a $2.7 billion defamation lawsuit against Fox News that is similar to one brought by the voting machine company Dominion, which was settled on Tuesday. He had several roles with Smartmatic over more than a dozen years, ending in 2016, according to his LinkedIn profile. His work for the company in Venezuela, a favorite foil of the right wing because of its troubled socialist government, has been a focus of conspiracy theorists.What he said about the threats“I could not sleep that night, I just sat in the living room, until around 3:00 a.m., just waiting to see if anyone had read this and decided to act on it.”— From Mr. Garcia’s written testimony last year, describing the toll that the posting of his address online, along with other threats, had taken on him and his family.Other election officials who have quitAll three election officials resigned last year in another Texas county, Gillespie — at least one of whom cited repeated death threats and stalking.A rural Virginia county about 70 miles west of Richmond lost its entire elections staff this year after an onslaught of baseless voter fraud claims, NBC News reported.Read moreElection officials have resorted to an array of heightened security measures as threats against them have intensified, including hiring private security, fireproofing and erecting fencing around a vote tabulation center.The threats have led to several arrests by a Justice Department task force that was created in 2021 to focus on attempts to intimidate election officials. More

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      Fox-Dominion Trial Delayed: What to Know About the Company Behind the Lawsuit

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      Dominion, which is owned by a New York private equity firm, has accused the news network of spreading false narratives about its election technology.If not for the 2020 election, most people would not have heard of Dominion Voting Systems, an elections technology company that John Poulos started out of his basement in Canada more than two decades ago.But in the days and weeks after the election, former President Donald J. Trump and many of his allies accused the company of perpetrating election fraud. Dominion then filed a slew of defamation lawsuits against public figures and news networks, accusing them of spreading the false narratives and exposing its employees to harassment. The company’s case against Fox News is scheduled to go to trial this week. Judge Eric M. Davis, who is presiding over the case, said in a statement late on Sunday that he was delaying the trial by a day, until Tuesday. He did not cite a reason but said he would make an announcement Monday at 9 a.m.Here is what we know about the company, from its private equity owner in New York to its powerful perch in the nation’s elections industry.Dominion’s Early DaysDominion became one of the largest providers of election technology in the United States by selling, licensing and maintaining products such as its Democracy Suite software and ImageCast voting and tabulation machines. During the 2020 election, the company served 28 states, including many swing states, as well as Puerto Rico. Mr. Poulos, who has degrees in electrical engineering and business, incorporated Dominion in Toronto in 2003 with some friends after a stint in Silicon Valley. His sister was his first investor, followed by his parents and his friends’ parents. (Dominion declined to comment for this article.)The company is named after Canada’s 1920 Dominion Elections Act, which removed barriers to voting that had excluded women and voters of certain racial, religious or economic groups. Mr. Poulos’s business idea was to help people with disabilities, such as paralysis or blindness, cast their ballots as independently as possible while still leaving an auditable paper trail. Dominion incorporated accessible technology like audio readouts and large screens into election machines.The company scored its first American contract in 2009, providing voting technology to dozens of counties in New York. The next year, it moved its headquarters to Denver, where it now has several hundred employees.Private Equity OwnersStaple Street Capital, a private equity firm in New York, is the majority owner of Dominion. Mr. Poulos, Dominion’s chief executive, retains a roughly 12 percent stake. PennantPark Investment, a financial firm based in Miami, is another investor.Fox said in a legal filing that Staple Street paid $38.3 million in 2018 to acquire 76.2 percent of Dominion. At the time, the private equity firm valued the technology vendor at $80 million, or one-twentieth of the $1.6 billion in damages that Dominion had sought from Fox, according to Fox’s filing.Staple Street’s owners, Stephen D. Owens and Hootan Yaghoobzadeh, first worked together in 1998 on buyouts for the Carlyle Group, a private equity giant. (Their résumés also feature stints at Lehman Brothers and Cerberus Capital Management.) The firm’s board of directors includes a former chief executive of Dunkin’ Brands as well as a former chairman of the Federal Communications Commission and ambassador to the European Union.Staple Street declined to comment.On its website, Staple Street says it has $900 million of assets under management — mostly midsize companies such as a flower bulb distributor in New Jersey, an accounting and payroll reporting service popular with restaurant chains, a support organization for dental clinics and, at one point, the theme park operator Six Flags.Fox said in its filing that Mr. Yaghoobzadeh had authorized Dominion’s lawsuit against the network. The lawsuit, Fox said, is meant to generate publicity, deter negative reporting and “unjustly enrich” Staple Street.Fox cited discovery documents that it said showed Dominion “in a solid financial position, maintaining substantial cash, carrying no debt and producing a steady return on investment” to Staple Street. In 2021, Dominion paid full bonuses to its employees and executives and projected $98 million in revenue for 2022, Fox said.Last year, when asked whether he believed that Dominion was a “toxic” company after the 2020 election, Mr. Owens answered, “That’s correct.”A Business in FluxIn its complaint, which it filed in 2021, Dominion accused Fox of broadcasting lies that “deeply damaged” its “once-thriving” business, “one of the fastest-growing technology companies in North America” with a potential value of more than $1 billion.Shasta County, a rural area in Northern California that has become a hotbed for election denial, terminated its Dominion contract in January. Lawmakers in Montgomery County in Pennsylvania renewed a deal with Dominion for $518,052 in February, the same month that officials in Kern County, north of Los Angeles, narrowly approved a three-year, $672,948 contract after hours of heated debate.Dominion’s contracts with local and state governments typically last for several years and range from tens of thousands of dollars to more than $100 million, the company said in its complaint against Fox. The company estimated that misinformation about the company had cost it more than $600 million in profits.In an expert witness report submitted in the case late last year, Mark J. Hosfield, a managing director of the investment bank and advisory firm Stout, wrote that the false narratives had led Dominion to lose $88 million in profits from current and future opportunities. He also wrote that Fox’s coverage had caused the value of Dominion’s equity and debt to drop $920.8 million. Dominion’s renewal rate with clients had historically been 90 percent, he said.Fox has said the $1.6 billion that Dominion is seeking is “a staggering figure that has no factual support” and was “pulled out of thin air.” There has been no evidence of Dominion’s laying off employees, closing offices, defaulting on credit obligations or suffering canceled contracts as a result of Fox’s coverage, the network said.Fox said in other court filings last year that “Dominion’s calculations are riddled with mathematical overstatements” and losses misattributed to damaging news coverage, and that the company had beaten revenue forecasts that it set before the election.“Dominion’s lawsuit is a political crusade in search of a financial windfall, but the real cost would be cherished First Amendment rights,” Fox said in a statement.Dominion, in a statement said: “In the coming weeks, we will prove Fox spread lies causing enormous damage to Dominion. We look forward to trial.”An Important but Mysterious IndustryThe elections technology industry has few major players and offers little public information about its finances. Dominion is most likely the second-largest company of its kind operating in the United States, behind Election Systems & Software in Nebraska, according to Verified Voting, an election security nonprofit.Both companies, along with Hart InterCivic in Texas, have acquired smaller competitors over the past two decades. As of 2016, the three vendors served more than 90 percent of eligible voters in the country, according to a report from the Wharton School at the University of Pennsylvania.Wharton researchers at that point described the election technology business as having “all the aspects of an industry that new investors would want to avoid — a costly regulatory environment, constrained market size, cost-conscious customers, and concentrated and entrenched vendors.”The Brennan Center for Justice estimated last year that replacing outdated voting equipment over the next five years could cost more than $580 million. A group of Democratic lawmakers, including Senator Elizabeth Warren of Massachusetts, sent letters in 2019 to Staple Street and other private equity firms that had invested in election technology companies, voicing concern about industry consolidation and the maintenance of voting machines. In response, Staple Street wrote to Ms. Warren that it spent roughly 10 to 20 percent of its revenue on research and development.Susan C. Beachy More

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      Judge Delays Fox and Dominion Trial by a Day

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      Opening statements in the $1.6 billion defamation case against Fox News were set to begin on Monday.A Delaware judge on Monday said that he had delayed by a day the start of a highly anticipated defamation trial over the spread of misinformation in the 2020 presidential election.The postponement of the trial was the latest twist in the case. Late Sunday, Judge Eric M. Davis said the proceedings would continue on Tuesday. He did not give a reason then or in his brief remarks from the bench just after 9 a.m. on Monday.“This does not seem unusual to me,” Judge Davis said, explaining that he had rarely been part of a trial that did not have some kind of delay. “I am continuing the matter until tomorrow.”The case has opened an unprecedented window into the inner workings of the country’s leading conservative news network. In the run-up to trial, Fox has handed over tens of thousands of emails and text messages exchanged among its hosts, producers and executives. Many of them revealed that there was widespread doubt inside the network over former President Donald J. Trump’s false claims that he had been cheated of victory.The case is considered a landmark test of First Amendment protections for the press and has been closely watched by legal and media analysts. Dominion’s voting machines became the focus of pro-Trump conspiracy theories that wrongly implicated the company’s technology in a plot to flip votes from Mr. Trump to President Biden.On Monday, the courtroom was filled with reporters from around the world awaiting word on when they could expect to hear opening statements from both parties and exactly what the delay was about.Boldface names from Fox News — hosts including Tucker Carlson, Sean Hannity and Maria Bartiromo, along with Rupert Murdoch, whose family controls the sprawling Fox media empire — are expected to testify if the case goes to trial.Dominion Voting Systems, an elections technology company, filed the libel lawsuit against Fox in early 2021, claiming that Fox hosts and guests repeatedly uttered lies about its role in a fictitious plot to steal the election despite knowing the claims, which had been pushed by Mr. Trump and his supporters, were not true.Fox has said that it was reporting on newsworthy allegations involving a presidential election and insisted that its broadcasts were protected under the First Amendment as commentary and news. It has also challenged Dominion’s damages claim, arguing that the company vastly overvalued itself and has not suffered the blows to its business that it says.This is a breaking news story. Check back for updates. More

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      Fox News Is on Trial, and So Are Falsehoods About 2020

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      A jury in Delaware will be asked to weigh the limits of the First Amendment. Another question in the case is whether the network will pay a financial penalty for disseminating election lies.WILMINGTON, Del. — On Monday, a judge in Delaware Superior Court is expected to swear in the jury in a defamation trial that has little precedent in American law. Fox News, one of the most powerful and profitable media companies, will defend itself against extensive evidence suggesting it told its audience a story of conspiracy and fraud in the 2020 election it knew wasn’t true.The jury will be asked to weigh lofty questions about the limits of the First Amendment and to consider imposing a huge financial penalty against Fox. Some of the most influential names in conservative media — Rupert Murdoch, Sean Hannity, Tucker Carlson — are expected to be called to testify. But there is another fundamental question the case raises: Will there be a price to pay for profiting from the spread of misinformation?Few people have been held legally accountable for their roles in trying to delegitimize President Biden’s victory. Sidney Powell, a lawyer who was one of the biggest purveyors of conspiracy theories about Dominion Voting Systems, the company suing Fox for $1.6 billion, avoided disbarment in Texas after a judge dismissed a complaint against her in February.Jenna Ellis, an attorney who worked with Ms. Powell and the Trump campaign, received a reprimand last month instead of losing her license with the Colorado bar. Donald J. Trump, whose false insistence that he was cheated of victory incited a violent mob on Jan. 6, 2021, is running for president a third time and remains the clear front-runner for the Republican nomination.Political misinformation has become so pervasive in part because, there is little the government can do to stop it.“Lying to American voters is not actually actionable,” said Andrew Weissmann, the former general counsel of the F.B.I. who was a senior member of the special counsel team under Robert S. Mueller that looked into Mr. Trump’s 2016 campaign.It’s a quirk of American law that most lies — even ones that destabilize the nation, told by people with enormous power and reach — can’t be prosecuted. Charges can be brought only in limited circumstances, such as if a business executive lies to shareholders or an individual lies to the F.B.I. Politicians can be charged if they lie about a campaign contribution, which is the essence of the criminal case against Mr. Trump by the Manhattan district attorney’s office.In the Fox News case, the trial is going forward because the law allows companies like Dominion, and people, to seek damages if they can prove their reputations were harmed by lies.The legal bar that a company like Dominion must meet to prove defamation is known as actual malice. And it is extremely difficult to prove because of the Supreme Court’s 1964 decision in New York Times Company v. Sullivan, which held that public officials can claim defamation only if they can prove that the defendants either knew that they were making a false statement or were reckless in deciding to publish the defamatory statement.“There are all sorts of times you can lie with impunity, but here there’s an actual victim,” Mr. Weissmann added. “It’s only because of the serendipity that they actually attacked a company.”Usually, there is great deference among media lawyers and First Amendment scholars toward the defendants in a libel case. They argue that the law is supposed to provide the media with breathing room to make mistakes, even serious ones, as long as they are not intentional.But many legal scholars have said that they believed there was ample evidence to support Dominion’s case, in which they argue they were intentionally harmed by the lies broadcast by Fox, and that they would not only be surprised but disappointed if a jury didn’t find Fox liable for defamation.“If this case goes the wrong way,” said John Culhane, professor of law at Delaware Law School at Widener University, “it’s clear from my perspective that would be a terrible mistake because this is about as strong as a case you’re going to get on defamation.” Mr. Culhane added that a Fox victory would only make it harder to rein in the kind of misinformation that’s rampant in pro-Trump media.“I think it would embolden them even further,” he said.This case has proved to be extraordinary on many levels, not only for its potential to deliver the kind of judgment that has so far eluded prosecutors like Mr. Weissmann, who have spent years pursuing Mr. Trump and his supporters who they believe bent the American democratic system to a breaking point.“Even if this didn’t involve Donald Trump and Fox and the insurrection, this is a unique libel trial, full stop,” said David Logan, a professor of law at Roger Williams School of Law and an expert on defamation. “There’s never been one like this before.”It is extremely rare for defamation cases to reach a jury. Mr. Logan said his research shows a steady decline over the years, with an average of 27 per year in the 1980s but only three in 2017.Some experts like Mr. Logan believe the case’s significance could grow beyond its relevance to the current disinformation-plagued political climate. They see an opportunity for the Supreme Court to eventually take the case as a vehicle to revisit libel law and the “actual malice” standard. The justices have not done that since a 1989 case involving a losing candidate for municipal office in Ohio who successfully sued a newspaper after it published a false story about him a week before the election. The court said that a public figure cannot recover damages unless there was “clear and convincing proof” of actual malice..The actual malice standard has been vital for individual journalists and media outlets who make mistakes — as long as they are honest mistakes. But some scholars like Mr. Logan — as well as two conservative Supreme Court justices, Neil M. Gorsuch and Clarence Thomas — have argued that “actual malice” should be reconsidered as too high a standard. Justice Thomas specifically cited as a reason “the proliferation of falsehoods.”“The nature of this privilege goes to the heart of our democracy, particularly in this case,” said Mr. Logan, whose paper arguing that the courts have made it too difficult for victims of libel to win relief was cited in a dissent by Justice Gorsuch in 2021.Fox lawyers are already preparing for an appeal — a sign they are under no illusion that beating Dominion’s case will be easy. At several recent hearings in front of Judge Eric M. Davis, Fox has been represented by Erin Murphy, an appellate lawyer with experience arguing cases before the Supreme Court.Dominion also apparently considers the possibility of an appeal quite realistic. It had an appellate attorney of its own, Rodney A. Smolla, arguing on its behalf when questions of Fox’s First Amendment defense arose last month — the kind of constitutional questions that federal appellate courts will entertain.The belief that the Supreme Court could eventually hear the Fox-Dominion case is shared by the general counsel of Fox Corporation, Viet Dinh. Mr. Dinh, who is likely to be called as a witness by Dominion during the trial, has told colleagues privately that he believes Fox’s odds at the Supreme Court would be good, — certainly better than in front of a Delaware jury, according to people who know his thinking. The evidence against Fox includes copious amounts of text messages and emails showing that producers, hosts and executives belittled the claims being made on air of hacked voting machines and conspiracy, details that Dominion has said prove the network defamed it.But Fox lawyers and its public relations department have been making the case that its broadcasts were protected under the First Amendment because they encompassed the kind of coverage and commentary that media outlets have a right to do on official events of intense public interest.“A free-flowing, robust American discourse depends on First Amendment protections for the press’ news gathering and reporting,” a network spokeswoman said in a written statement. The statement added that Fox viewers expected the kind of commentary that aired on the network after the election “just as they expect hyperbole, speculation and opinion from a newspaper’s op-ed section.”Judge Davis has overruled Fox on some of its First Amendment claims, limiting its ability to argue certain points at trial, such as its contention that it did not endorse any false statements by the president and his allies but merely repeated them as it would any newsworthy statement.A spokeswoman for Dominion expressed confidence, saying: “In the coming weeks, we will prove Fox spread lies causing enormous damage to Dominion. We look forward to trial.”Inside Fox, from the corporate offices in Los Angeles to the news channel’s Manhattan headquarters, there is little optimism about the case. Several current and former employees said privately that few people at the company would be surprised to see a jury return a judgment against Fox. Judge Davis has expressed considerable skepticism toward Fox in the courtroom. He issued a sanction against Fox last week when Dominion disclosed that the company had not revealed details about Mr. Murdoch’s involvement in Fox News’s affairs, ruling that Dominion had a right to conduct further depositions at Fox’s expense.But he does not have the final say. Twelve men and women from Delaware will ultimately decide the case. And defamation suits so rarely prevail, it’s also reasonable to consider the possibility that Fox does win — and what a 2024 election looks like with an emboldened pro-Trump media. More