Fox vs. Dominion
787 million reasons to settle a lawsuit.
There was a lot of news this week, but I think the story that captured the most attention was the giant (and surprising) settlement in the Dominion v. Fox News defamation case. Let’s go through it.
Holy moly, $787 million is a lot of money.
On Tuesday of this week, it really looked like the Dominion vs. Fox trial was about to begin. Opening statements were being prepared, juries had been selected, and even the alternate jurors were readied up.
But Fox and Dominion ultimately settled the lawsuit before the trial began, with Fox agreeing to pay Dominion $787 million, which falls short of its $1.6 billion dollar lawsuit, but is a bigger number than many experts expected. On its own, it’s not a number that will cripple Fox News (they probably pull in a similar amount per month), but generally shareholders of a public company do not want to see them writing checks that big for avoidable errors.
Many of the Left were disappointed that Fox didn’t really have to admit any fault in the suit and basically made it go away with a big number. While Fox did have to acknowledge in a public statement that many of their claims were false, it is true that no on-air anchors who spread the lies about the 2020 election would have to correct in front of a Fox audience. Maybe that hurts a little, but it was always a talk ask.
That’s mostly because Dominion is only Fox’s first lawsuit related to its coverage of the 2020 election. Another company, Smartmatic, is still waiting for its day in court, and that case has many of the same strengths ascribed to the Dominion lawsuit. To wit, Smartmatic now has a lot of evidence to draw from thanks to the discovery process in the Dominion lawsuit, and they will be able to actively prove that the majority of the anchors at Fox did not actually believe that Joe Biden “stole” the 2020 election.
A primary reason that Fox could not admit fault in its statements about Dominion (and likely why such a statement would be a non-starter in any conversation) is that it would essentially end the Smartmatic case in their favor. And while Smartmatic has made a lot of statements about how they’d like to see a “bigger payout” and some more accountability for Fox News, it is kind of a safe bet to assume they will accept something similar to Dominion’s win.
Why did Fox settle?
The simple answer to this question is that Dominion’s case was really strong, pretty much as strong as a defamation lawsuit can get. There were rumors even before the trial that Fox had made repeated overtures to Dominion in order to keep it from getting to a jury, but Dominion’s attorneys were actually the ones who were resistant. Some of the rumors also alleged that Dominion saw their fight as being deeper than a mere monetary settlement and wanted to make sure Fox was held accountable. In the end, the money did a lot more of the substantive talking.
The other reason that Fox settled is related to why Dominion settled: As a roughly $80 million company, Dominion (which is owned by a private equity firm) essentially had a responsibility to accept such a large payout. In the end, $787 million is too much money to turn down for a company of Dominion’s size. In the same way, Fox settled the lawsuit to essentially make it go away, which would allow them to get back to doing what it does best: Making money. As the Dominion lawsuit revealed, Fox is less of a news company as it is an entertainment company, and its primary purpose is to keep viewers from changing the channel. By broadcasting Donald Trump’s lies about the 2020 election, they kept their viewers from changing to a different channel (in this case, Newsmax and OAN). Like Dominion’s attorneys have a responsibility to to act in the best interest of their client’s bottom line, Fox has a responsibility to its shareholders. A long, protected fight - even one that ends with a win - isn’t good for business, or Fox’s long-term brand.
What made Dominion’s case so strong?
There are varying legal opinions on the strength of Dominion’s case, but most of those opinions range from “slam dunk” to “not quite a slam dunk, but quite strong,” on the Dunk O’Scale™. To demonstrate why the case was so strong, I think it’s illustrative to highlight the different, but less successful defamation case lounged by Nicholas Sandmann against the Washington Post, CNN, and other outlets. The Sandmann story is pretty old, but way back in 2019 there was a confrontation in Washington, D.C., between three groups:
High school students from Covington High School (Sandmann is in this group).
A coalition of people advocating for the rights of Indigenous Peoples.
Black Hebrew Israelites.
It gets complicated, but basically the (true) story is that Black Hebrew Israelites were shouting epithets at the high school students (as someone who was frequently shouted at by Black Hebrew Israelites while I lived in Manhattan I can confirm that they do this), the kids responded by joking around, and a Native American, Nathan Phillips, walked in between both groups in order to diffuse the tension. He came face to face with Sandmann and video of that encounter went viral on social media. It quickly received wall-to-wall media coverage, including write-ups in the Washington Post and CNN.
Some of the media coverage focused on the “deeper meaning” behind a white, smiling high school student in a MAGA hat, rather than focus on what it actually was: A high school student staring at a Native American man while he sang. Sandmann took exception to a lot of that coverage and set out to sue a few different outlets, specifically the Washington Post and CNN. I’m singling out those two outlets because they are the ones that actually settled their lawsuits with Sandmann, whereas the other outlets that Sandmann sued (the New York Times, CBS, ABC, Rolling Stone) opted to fight the defamation suits filed against them.
Long story short, Sandmann lost all of his cases that moved forward past settlement, because the media coverage of his “confrontation” with Phillips was pretty clearly not defamation. Mike Masnick helps explain why:
There were also twenty different videos of the events of the day that were submitted — a reminder of how that same event was viewed from so many different perspectives (literally and figuratively).
The court then more or less telegraphs what it is thinking regarding all of this:
In the Court’s view, six of the videos show the specific encounter between Sandmann and Phillips in helpful respects. What a viewer might conclude from these videos is a matter of perspective.
A matter of perspective is… not defamatory.
Masnick also notes that the settlements that were paid out to CNN and the Washington Post were likely “nuisance fees,” in the range of $10-50K, which is not a small amount of money but not the $275 million he was seeking.
What made Sandmann’s case weaker than Dominion’s was that most of the coverage involving him was largely framed as opinion. For example, Chris Cuomo on CNN engaged in speculation about Sandmann’s motives, but at no point did he say, “Nick Sandmann is clearly a racist.”
What Fox News did with Dominion is entirely different, as there were many declarative statements indicating that their voting machines had “switched” votes from Trump to Biden, and that they couldn’t be trusted. The other notable point here is that while both Sandmann’s case and Dominion’s case involved discovery, Sandmann’s discovery turned up nothing and Dominion’s turned up incredibly salacious evidence demonstrating that Fox News hosts knew Trump’s statements about the election were false.
What’s next for Fox?
It is difficult to speculate how the Smartmatic case will go for Fox, but it’s worth looking back at Greg Gutfield’s statements following Sandmann’s settlement with CNN:
“But this is really good news for everybody on the planet, because it’s a turning point. […] But now if you know that somebody can sue you, that changes your behavior and if you don’t have deep pockets, and your company’s gotta be worried, so I think this is gonna put an end to the swarm.”
My emphasis.
Have a great week. See you all next Friday.