"To Settle, or Not To Settle: That is the Question"
By: Marci Hutchinson
On April 18, 2023 the “largest publicly known defamation settlement in US history involving a media company”[1] was announced as Fox News Network reached a settlement with Dominion Voting Systems. Fox News agreed to pay Dominion $787.5 million. No other specifics about the settlement have been publicly released.
The settlement was reached on the day the jury was sworn in and opening statements were to begin. This was following a two year time span from the filing of the complaint in the Superior Court of Delaware. You can read the complaint filing here, where they lay out the alleged facts supporting their complaint and Prayer for Relief for damages totaling $1.6 Billion for lost profits, lost enterprise value, security expenses, and expenses incurred to combat the disinformation campaign they claim that Fox News waged against them. The alleged campaign included repeatedly airing allegations, knowing they were false, that Dominion Voting Systems were “rigged” during the 2020 Presidential election and giving interviews on their programs to people making those allegations.[2]
Recently, at a speaking engagement at Harvard Law School Fox Corporation’s Chief Legal Officer Viet Dinh blamed “a series of errors” by the Delaware judge for forcing them to settle the case[3]. He is believed to be referring to the decision by the judge on March 31, 2023 to grant partial Summary Judgment to Dominion on the element of “falsity”. You can read the ruling here. Essentially, Fox News couldn’t argue at trial that the allegations may have been true and therefore they had an obligation to report them. It was ruled a material fact that the allegations of voter fraud related to Dominion Voting Systems were false.[4] The Judge stated:
“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. Therefore, the Court will grant summary judgment in favor of Dominion on the element of falsity.”[5]
Additionally, during the discovery phase emails, texts, and other communications between Fox News hosts and executives had been released. You can read about those communications here as well as in the Summary Judgment ruling above.
I don’t think anyone could argue that $787.5 million is not a large sum of money. We learned last week in class how common settlements are and that most cases don’t make it to trial. But, why would parties go through years of expensive litigation only to settle at the last minute? What could be some motivating factors for parties to settle?
[1] Marshall Cohen and Oliver Darcy, Fox News settles with Dominion at the last second, pays more than $787 million to avert defamation trial over its 2020 election lies, CNN.com April 19, 2023 https://www.cnn.com/2023/04/18/media/fox-dominion-settlement/index.html
[2] US DOMINION, INC., Dominion Voting Systems, Inc., and Dominion Voting Systems Corporation, Plaintiffs, v. FOX NEWS NETWORK, LLC, Defendant., 2021 WL 1153152 (Del. Super. March 26, 2021) (Trial Pleading)
[3] Brian Baxter, Fox Legal Chief Cites Judge Errors for $787 Million Settlement, Bloomberg Law October 16, 2023 https://news.bloomberglaw.com/business-and-practice/fox-legal-chief-cites-judge-errors-for-787-million-settlement
[4] US Dominion v. Fox News Network, WL 2730567 (Del. Super. Mar. 31, 2023) (Trial Pleading)
[5] Id. at 21
Great post, Marci. I guess that Fox had a legal team comprising finance people who did a cost-benefit analysis. They probably did a series of calculations and probabilities, including a Net Present Value calculation, to determine if the cost of continuing litigation vs the benefit of potential relief or beneficial judgment. $ 787 million or close to it was the number they arrived at.
ReplyDeleteI thought the same, even given how much they had already spent on legal fees they had to believe it would have been more financially beneficial for them to settle.
DeleteGreat blog, Marci.
ReplyDeleteI think parties settle for public relations/reputation management in cases like this. Although the US Dominion v. Fox case was already a high-profile story and received a lot of publicity, going through a trial could further damage the brand with the additional risk of legal uncertainty. Settling allows parties more control over the outcome rather than leaving it up to the discretion of a judge and jury.
I think the PR aspect factored in as well. At least with a settlement they could put their own spin on it, but if they had ended up with a verdict against them it would not have been so easy to dismiss.
DeleteI sort of feel like the attached cartoon answers the question. The amount spent on this settlement and the discovery leading up to it by Fox news was probably petty cash to them. Perhaps what was more at stake was the fact that at trial a lot of unsavory information and testimony about Fox and their reporters would come out. I believe with this settlement, they just paid the money and went on their merry way, no apology for being misleading in their news reporting, no admission of guilt (although the check they cut was pretty damning), just business as usual. If I were a regular Fox viewer I would be offended by this reporting. Feeding viewers false information because they can't handle truthful reporting and then afterwards making comments privately that the conspiracies they were feeding viewers as "mind-blowingly nuts" doesn't say a whole lot about how they feel about their viewers.
ReplyDeleteInterestingly, they barely covered the settlement in their own news publications, just issued one statement. So who knows whether their viewers even really knew that it happened...
DeleteGreat post Marci! I think it took a long time for the case to settle because of factors outside the case itself. The court and Dominion didn't want to fuel the claims that the 2020 election was "stolen," because they wanted to maintain public trust that the government systems they're a part of are functioning properly. On the other hand, Fox gets its viewers and money because of its antics and false information, so they wanted to maintain this facade and keep their viewers engaged. I think this was why the case didn't settle until the last minute; both sides wanted to maintain these completely opposite opinions in the eyes of the public. They knew the public would see a settlement as the side that settled accepting that their claims were wrong.
ReplyDeleteHowever, when the judge granted summary judgment on the falsity element, Fox would no longer get any social benefit from the case. They wouldn't be able to maintain the charade that the election was stolen anymore, and that hysteria is what motivates them and lines their pockets. So, they settled.
I think one of the biggest reasons for settling at the last minute is the game of chicken and who can hold out the longest. They had multiple settlement talks and they probably had a number that they were hoping for. There's also the gambling part to it - you are guaranteed X dollars if you settle or you can gamble and see if the jury would award you more (maybe, maybe not).
ReplyDeleteThanks for the good post, Marci! Fox's soon-to-be former Chief Legal Officer's remarks come across as hollow and bitter to me. If he was confident the Judge made an error, why didn't he have a better argument for why summary judgment shouldn't be given for the falsity claim? Or why couldn't he convince Fox to take that up on appeal?
ReplyDeleteThe text messages found in discovery didn't help Fox's case, and I am sure Fox didn't want their leadership or main TV personalities compelled to testify at trial. They probably didn't want to see the courtroom artist's sketches of Tucker or Hannity being used as the lead-in for all of their competitor's news programs for the next ten news cycles either.
Thanks, Ryne. It was interesting about his comments because I read in another article about the case (not one I cited here I think) where he says he felt pretty strongly they could have won on appeal but essentially he had no choice but to settle. I think that the client, Fox News and Rupert Murdoch, had the final say - which they should as the clients - and they wanted to settle and avoid a drawn-out trial and appeals process.
DeleteGreat post Marci!! In this case I think their only option was to settle, if they didn't settle and it went to a jury they would've likely had to pay double the amount to Dominion. I say that for a few reasons. The first, the partial summary judgment hurt their defense, big time. Second, the communications obtained in discovery. It is really hard to argue they weren't pushing false claims when their own news anchors acknowledged and complained about it in communications between them. Having said that I was really disappointed that they did because I wanted to see all the details come to light in the trial, as did a lot of other people. There is just something ridiculously fascinating about watching a company like FoxNews go down in flames, perhaps even satisfying.
ReplyDeleteI felt the same way, I almost felt like there was such so much at stake it would have served public interest to have it go to trial.
DeleteHi Marci! I really like how you organized this blog post. Law and legal terms was like a foreign language for me before starting this program. As we have learned terms like summary judgment, I've recognized them as terms I've heard before, but didn't really know how what they meant. As I read your description of the course of this case, some of those terms clicked together for me. Maybe it's a no-brainer for others, but I'm still making connections here. Hahaha. The way you worked these terms into the context and description, and then referenced key points, was really helpful for me. Good job!
ReplyDeleteI second that.
DeleteThank you! As I was going through all the materials I was thinking the same thing, how I would have had no idea what it all meant just a few months ago!
DeleteOne out of many possibilities is that Fox may have feared losing viewers. Maybe. I also wanted to see this go to trial. Would have made for good media at the very least.
ReplyDeleteI didn't have cable, so Fox News was not a thing for me growing up. I watched local and world news on CBS, NBC, or ABC.
Fox News was the only thing on in the chow hall. Glenn Beck was still on. The few times I paid attention to him, had me scratching my head. I saw ESPN played in the chow hall maybe twice my entire five year enlistment.
I finally got access to streaming services. I ended up watching the Daily Show which is not news. It was always fun to see Jon Stewart rip in to Tucker Carlson, Fox News, and CNN. I remember the time the Daily Show covered Fox News trying to cover up one of their presenters/reporters throwing an axe, missing the target, and nailing an Army band member in the arm. Besides comedy, Stewart used his platform to advocate for 9/11 first responders. I like seeing the news from a comedic stand point. "Spoonful of sugar helps the medicine go down."
It always intrigues me whether large public settlements look more like an admission of guilt than a guilty verdict. Sometimes a guilty verdict can be questioned, as the public knows that innocent entities can be wrongfully charged. But by settling, its pretty much a "yeah shut up here ya go" admission. Maybe this is how I WISH it was because Im tired of rich people and companies getting away with stuff by settling. If I had billions, I could do almost any crime and pay off the victims to continue my life. Wrong...
ReplyDelete