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Why there's so much at stake in the Dominion-Fox News trial

The $1.6 billion lawsuit is the most consequential libel fight in decades. Will Fox settle?

The most consequential libel trial in decades, Dominion Voting Systems’ $1.6 billion lawsuit against Fox News Network, was supposed to begin on Monday. The trial's start has now been pushed to Tuesday — which could be an indication that Fox is looking to settle. To be sure, pretrial rulings have already given Dominion a significant boost in proving its case to a Delaware jury.

But the case — however it ends up — is not only consequential for Fox’s journalistic reputation, and bank account. Also at issue is the viability of Supreme Court rulings in the 1960s providing sweeping protection for media companies, even when they disseminate false information.

Libel lawsuits are tough for a public figure or corporation to win, and rightly so.

Specifically, the landmark First Amendment decision in New York Times v. Sullivan created the test of “actual malice,” and that test requires Dominion to prove that when Fox News broadcast false and defamatory statements about “rigged” Dominion voting machines after the 2020 election, Fox News knew the statements were false or acted with reckless disregard about their truth or falsity. “Malice” in this context is a confusing misnomer, as the standard has nothing to do with the normal dictionary definition, such as hatred or ill will. Instead, it focuses on the subjective state of mind of Fox News.

The Dominion v. Fox News defamation trial is expected to begin Tuesday. Follow our live blog for the latest updates and expert analysis at msnbc.com/dominiontrial. 

Libel lawsuits are tough for a public figure or corporation to win, and rightly so, given the First Amendment value of a free press. The legal standard is so protective of the media that almost all such libel suits are dismissed prior to trial.

And yet Dominion’s case, as disclosed in pretrial discovery and pretrial rulings, is exceptionally strong. If Dominion loses, then the constitutional question will be whether the existing actual malice rule favors a defendant too much.  

That high constitutional standard already has critics on the current Supreme Court. Two conservative Supreme Court justices, Clarence Thomas and Neil Gorsuch, have publicly advocated that the Supreme Court reconsider — and potentially modify or overrule — the “actual malice” standard. That creates an odd dichotomy here. The actual malice rule challenged by the conservative justices is embraced by Fox News, a conservative news outlet, as its central defense.

“There will be a lot of noise and confusion generated by Dominion and their opportunistic private equity owners, but the core of this case remains about freedom of the press and freedom of speech, which are fundamental rights afforded by the Constitution and protected by New York Times v. Sullivan,” Fox News said in a statement in February. 

Of course, the actual malice test may not save Fox News. Dominion has a powerful case even using that test.

Pre-trial filings of internal Fox News communications and sworn deposition testimony have been revealing.

Pre-trial filings of internal Fox News communications and sworn deposition testimony have been revealing. Those filings suggest some Fox News personnel did not believe that the election had been stolen and privately debunked the credibility of election deniers. Nonetheless, Fox News continued to give a national TV platform to guests who spread lies about Dominion.

The court’s pre-trial rulings have only made Dominion’s case stronger. Not only did the court deny pretrial motions from both defendants seeking judgment in their favor, but it also ruled that several critical elements of Dominion’s libel claim were already proven.

The court concluded that Fox News hosts and guests made, on-air, false and defamatory factual statements about Dominion. So the jury will be told that those points are decided. Not many plaintiffs in libel lawsuits have had such a head start in proving their case.       

The setbacks continued for Fox News last Wednesday, when the court sanctioned it for withholding evidence and bluntly questioned its credibility.

If Dominion prevails, Dominion will recover a monetary judgment, perhaps a massive one. Fox News argued that Dominion has not suffered any damages. But here again, Judge Eric M. Davis has already and unequivocally rejected that argument, leaving the calculation of damages to the jury.  

Libel law terms can be arcane, but ancient legal concepts have real-world consequences. The court has also already ruled that Fox News’ false statements were libel per se. This means that the falsehoods were so naturally injurious to Dominion that the plaintiff need not prove actual damages such as lost business or proven reputational damages. Damages are presumed. If the jury finds Fox News or its parent company acted with actual malice, the jury can assess whatever damages it believes are justified.

Fox News is also barred from arguing that it was simply reporting neutrally the statements of election deniers such as Sidney Powell about Dominion voting machines having been programmed to steal votes from Trump. Judge Davis ruled that New York law, which governs this case, does not recognize Fox News’ legal theory that a “neutral report” privilege allowed it to air election deniers’ theories, whether true or false.

Three key questions remain to be decided by the jury. First, whether Fox Corporation (which owns Fox News Network) is itself also liable because of the alleged involvement of Rupert Murdoch, Fox’s chairman, and other Fox executives, in Fox News’ decision to broadcast defamatory statements about Dominion. The court has ruled that, if subpoenaed by Dominion, Murdoch will be required to testify in person at the trial.

Second, the jury must decide, by clear and convincing evidence, if the defendants disseminated false information with actual malice. 

Finally, if the jury finds either Fox News or its parent company liable, the jury will decide the amount of actual and presumed damages. Judge Davis has not yet decided whether the jury will also be allowed to consider awarding punitive damages, which are designed solely to punish a defendant for egregious misconduct.

Fox News can still try to settle with Dominion, but in addition to money, Dominion could demand a public on-air apology.

Fox News can still try to settle with Dominion, and indeed those conversations may have already started. But in addition to money, Dominion could demand a public on-air apology. 

Meanwhile, media lawyers and their clients face a conundrum: A jury victory for Fox News may trigger an appellate process that could lead the Supreme Court to jettison the ultra-protective standard that media defendants have consistently relied upon since 1964. If Dominion, despite its strong evidence, fails to persuade the jury under the daunting actual malice test, Dominion may argue that the test unlawfully deprives injured parties of compensation for real and serious reputational injuries.

Such a challenge could lead to intriguing cross currents. Dominion would be inviting conservative justices to overturn a victory for Fox News achieved under the existing constitutional standard. And media competitors who are not fans of Fox News will find themselves siding with Fox in any such appeal.

There is a lot at stake to strike a balance between punishing those who promulgate fake news and affording the press the ability to report without fear of harassing libel lawsuits. Let’s hope the former doesn’t inadvertently destroy the latter.