Fox News Settlement With Dominion Gives Shareholder Lawyers Tangible Evidence
Just before they were set to begin trial, in a stunning turn of events, lawyers at Fox News decided to settle the $1.6 billion lawsuit filed by voting machine company Dominion, reaching a settlement of $787.5 million. While this amount is less than half of what Dominion was seeking in damages, it is still one of the largest defamation settlements in history, and the largest amount of money ever paid to conclude an American media libel case.
Dominion CEO John Poulos described the settlement as historic, noting that “Fox has admitted to telling lies about Dominion that caused enormous damage to [the] company, [its] employees and [its] customers.”
According to an article from Rueters, the settlement “gave shareholder lawyers exactly what they needed to sue Rupert Murdoch and the rest of the Fox board. The nine-figure settlement is tangible evidence of the consequences of Fox’s reporting on election fraud claims by supporters of former President Donald Trump in the aftermath of the 2020 election.”
The report claims that shareholder lawyers are now poised to bring lawsuits accusing Murdoch and other Fox board members of “breaching their fiduciary oversight duties by failing to block the network’s flawed reporting, despite red-flag warnings.
When shareholders accuse board members of failing to maintain their oversight duties, they typically bring their claims on behalf of the corporation itself, arguing that shareholders must step in to sue directors and officers because board members can’t be trusted to represent the company’s interests.”
The article notes that these kinds of cases are known as derivative suits and face a unique early obstacle: “Shareholders have to convince the judge that it would have been pointless to ask board members to sue on behalf of the company. They typically argue that board members wouldn’t approve litigation that would expose themselves to liability, or that directors are so closely tied to a dominant shareholder – in this case, Rupert Murdoch and his family – that they can’t make independent decisions.
If shareholders can establish their right to sue on the company’s behalf, they must then show that Fox’s board members acted so egregiously that their actions can’t be attributed merely to an error in judgment.”
Fox board members will likely argue that the network’s coverage decisions were simply “good business.” And with the ratings that the channel continually receives, they could be right – regardless of the truth.