Those of us hoping that Fox and the Murdochs would take a big financial hit for undermining the 2020 election may be sorely disappointed.
Veteran legal correspondent Eriq Gardner wrote a recent Puck article explaining why he predicts both the Dominion and Smartmatic defamation cases against Fox News will settle - with at least the Dominion costs being borne by insurance.
Gardner wrote, “The first thing to understand” about both suits, each seeking billions in damages, “is how invasive they are for Fox News.”
The network has already turned over minute-by-minute ratings charts, emails about ratings, MyPillow advertising revenue, most communications with the White House, internal documents that include mentions of both “Trump” and “election,” and so forth. But that’s not good enough, say Dominion’s lawyers, who are demanding to see Sean Hannity’s texts. They are also wondering why, after providing nearly a half million documents about their company, that Fox has only offered thousands of their own. A discovery referee agreed, and pushed Fox to keep digging. Meanwhile, the potential witness list is getting personal: James Murdoch was recently served a subpoena for documents and a deposition next month. Dominion wants to see communications between him and his father; between him and his brother Lachlan Murdoch; and anything that precipitated his decision two years ago to leave the News Corp board (a separate Murdoch-controlled company).
Gardner says that Fox may well have hundreds of millions of dollars in insurance to cover defamation claims. That, he argues, is why a Dominion settlement is likely:
[Insurers are] typically risk-averse. Do insurers with a stake in the outcome really want to face a Delaware jury being told by the plaintiff to punish Fox to the tune of billions? And if there’s a reasonable settlement offer on the table, say $200-300 million, Fox might nudge them to accept by hinting they could face a bad faith claim by refusing. Meaning, the insurers would arguably be on the hook for the entire verdict regardless of the policy limit.
Should the company lose big, that trial result might lead to cascading consequences. Why risk it if you can get the insurer to foot the bill and you don’t have to admit wrongdoing? That’s why I think, sooner or later, this one gets resolved without the drama.
Gardner believes that the Dominion case, which is scheduled to go to trial next year in Delaware, will have consequences for the Smartmatic case in New York which could take a decade to get to trial. Presumably he means that the Smartmatic case will likely be resolved similarly to Dominion.
I’m not a lawyer. I’m not even a legal correspondent. But it does seem like something is missing from this calculation: whether Dominion would be willing to settle, especially without an admission of wrongdoing. Legal experts think Dominion has a strong case. Plus, Gardner notes that Delaware is a liberal state without a cap on punitive damages.
Dominion’s complaint says its employees have been threatened and harassed and that its business “has suffered enormous and irreparable economic harm.” It also alleges that Fox’s lies have harmed democracy and that the lawsuit is also about “accountability.” Smartmatic makes similar allegations.
It seems likely to me that any settlement acceptable to Dominion would have to involve some kind of massive mea culpa and an effort to rehabilitate Dominion’s reputation on Fox’s part. The same is likely true for Smartmatic.
Would Fox’s insurance offer up a big enough settlement for Dominion to accept? Would Fox be willing to issue the kind of apology and retraction that would satisfy Dominion and Smartmatic? I suspect the Murdochs would have Fox say or do almost anything for the sake of their own pocketbooks. But how much would it cost Fox to disavow its own MAGA rhetoric and promote Dominion's and Smartmatic's integrity? That would not be the kind of cost that insurance can cover.
(Rupert and Lachlan Murdoch images via DonkeyHotey)
Insurance companies spend a lot of time and money rooting out fraudulent claims; those lists of errors and omissions are only the starting point. Suicide is not covered by your life insurance policy and you’ll get a prison sentence instead of cash for setting fire to your own property or selling your wife’s jewelry. I’d be curious to know whether the insurers said anything to Fox(not)News because they’ve been pretty silent on voting machines lately.
Voting machines are a large chunk of Dominion’s bread and butter business and their reputation has been badly damaged, perhaps beyond repair. I really hope they won’t settle for a paltry sum to be covered by insurance. The Murdochs have got to put their cash where their mouth is.
Which is not to say that the insurance company wouldn’t look for ways to avoid paying what would surely be a big settlement.
For example, if an employee misbehaves and a lawsuit is generated at the employer, insurance may or may not cover the situation. If the employee was acting lawfully and appropriately, then yes, they will need to be covered against a frivolous attack. But if the employee did something unsupportable, the company has the right to back away. Similarly, just because a company like Fox has an insurance policy does not mean that it’s free from accountability when it knowingly lies and defames a company that can fight back. Further, even if insurance covers part of a settlement, the insurer would most assuredly skyrocket the premium in response.
Fox is not going to walk away from this situation without a significant amount of pain for itself and its stockholders. Frankly, were I to advise Dominion on this, I’d recommend they take it to trial and not let Fox try to worm their way out.
As a reverse example of this, the remaining Nick Sandmann nuisance suits were laughed out of court this past week – meaning that ABC, CBS, Rolling Stone, NY Times and Gannett are free from that harassment now. NBC, WaPo and CNN chose to settle for pittance payments over a year ago (reportedly under 50K each, with almost all the money going to Sandmann’s attorneys) because it was cheaper to avoid a longer court cost to get to the same place. The other outlets chose not to settle, as they wanted to make the point that they wouldn’t give Sandmann anything for trying to pretend to be a victim when he was the one at fault. This course was a little more expensive for them, and Sandmann certainly cannot afford to reimburse them for their costs – but it’s one based on principle. And I would hope that Dominion and Smartmatic would follow that same principle.