After decades at the helm of Fox and News Corp as chair of their boards, Rupert Murdoch will this week cede direct control of his media empire to his son Lachlan — passing along not only one of the most polarising brands in US news, but also potentially costly legal
The legal baggage awaiting Lachlan Murdoch at Fox
Financial Times
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Lachlan Murdoch is taking over Fox at a time when the company faces several lawsuits. Photo / FT montage, Getty Images
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The cases potentially “pose the same kind of reputational risks that the Dominion case posed”, said Cary Coglianese, professor of law and political science at the University of Pennsylvania.
“It’d be reasonable to expect some, if not all of these cases will eventually settle — perhaps for hefty amounts.”
Here are some of the most notable cases facing Fox as Lachlan, 52, fully takes the reins.
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Smartmatic vs Fox
Global election technology company Smartmatic had a far smaller role in the 2020 US election than Dominion, providing voting machines for a single, deeply Democratic county in California.
But some Fox News anchors and guests allegedly implied that the group was involved in rigging the result against former president Donald Trump, and falsely accused it of working for the late Venezuelan dictator Hugo Chávez. As a result, Smartmatic is seeking a substantial $2.7b payout in its case, which was filed in New York.
“Night after night, publication after publication, Fox News reached out to its millions of viewers and readers around the world with a story: Joe Biden and Kamala Harris did not win the 2020 election; Smartmatic stole the election for them,” lawyers for the company wrote in their complaint, first filed in February 2021.
They added Fox knew the “story was a lie”, but it “was a story that sold”, so the network aired it anyway. As a result, they alleged, Smartmatic’s reputation as a secure and reliable technology provider was “irreparably harmed”.
In a statement, Fox said the coverage in question was “extremely newsworthy”, and that Smartmatic’s damages claims “are implausible, disconnected from reality, and on its face intended to chill first amendment freedoms”. The company’s motion to dismiss the case was denied by the court.
Sworn depositions of Rupert, Lachlan and Fox host Maria Bartiromo have been taken by Smartmatic’s lawyers, and the sides are engaged in protracted negotiations over documents Fox will hand over as part of the proceedings. A decision on whether the case should go to trial is expected around the time of the next US election.
NYC pension funds (and other shareholders) vs Fox and directors
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Five New York City pension funds holding almost $30mn worth of Fox shares, and the state of Oregon, which holds about $5m of the stock, combined forces to sue Fox Corp and its board of directors in September for breach of fiduciary duty.
They and several other shareholders argued Fox officers including Rupert and Lachlan Murdoch left the business exposed to costly defamation suits such as Dominion’s, in an “epochal journalistic scandal” and “governance failure”.
New York City comptroller Brad Lander said the board “failed to put safeguards in place despite having a business model that invites defamation litigation”, and the lack of a “proper strategy to mitigate defamation has clearly harmed Fox’s reputation and threatens their bottom line and long-term profitability”.
The plaintiffs argue Fox should have known since the Hulk Hogan vs Gawker case in 2016 — which resulted in a $140m verdict after the site published a sex tape of the star wrestler — that the payouts for defamation cases could be eye-watering.
Nevertheless Rupert, Lachlan and others “caused Fox News to promote political narratives without regard for whether the underlying factual assertions were true or based on sources worthy of credit”, they alleged.
Ray Epps vs Fox News
A Trump supporter who participated in the protests that led to the storming of the Capitol on January 6 2021, Ray Epps found himself unexpectedly in the crosshairs of Fox commentators, after he was cast by Carlson and others as a suspected FBI agent who was “the central figure” in inciting the violence in Washington.
Epps, a former US Marine, said the broadcasts turned him into a “character in a cartoonish conspiracy theory”, with “astronomical” consequences that included people driving to his farm “brandishing weapons and shooting on to [the] property”, according to a lawsuit filed earlier this year.
Fox’s lawyers have called the lawsuit “a direct attack on the first amendment” and maintained that the network’s stars merely joined a “public debate” about Epps, which had been fuelled by his unexplained disappearance from an FBI list of suspects.
Epps pleaded guilty in September to a misdemeanour charge over his role in the Capitol attack.
Fox’s motion to dismiss the case is pending.
Jason Donner vs Fox News
Jason Donner, a former Capitol Hill reporter and producer at Fox News, claimed he was unlawfully fired by the network for his refusal to report false information about the January 6 2021 riots and the outcome of the 2020 election.
During the riot itself, which was described at one point by Fox as “peaceful”, Donner alleged in his lawsuit that he called the network’s control room to tell them he was personally witnessing rioters storming the building and shots being fired, before adding: “I don’t want to hear any of this f***ing shit on our air ever again because you’re going to get us all killed.”
Donner also alleged he later raised objections to falsehoods being aired on Carlson’s programmes, and was dismissed shortly thereafter.
Nina Jankowicz vs Fox News
Fox’s legal woes extend to on-air comments made well after the 2020 election as well.
Public policy researcher Nina Jankowicz became a bête noire for Fox hosts after being appointed by the Biden administration to the newly created Disinformation Governance Board in April 2022, where she was tasked with “countering misinformation related to homeland security”.
Jankowicz came under attack from rightwing figures branding the unit a sinister “Ministry of Truth”.
She is suing for defamation, claiming Fox orchestrated a “malicious campaign of destruction” against her, which led to her and her extended family facing “unrelenting threats and harassment” that continue to this day.
In its motion to dismiss the case, Fox argued its opinion hosts merely “exercised their first amendment rights to join the debate” and voiced their predictions that the board and Jankowicz “would become arbiters of truth and thereby censor speech”.
Judge Colm Connolly in Delaware has yet to rule on the motion.
Jankowicz is seeking damages in an amount to be determined at trial.
Written by: Joe Miller and Anna Nicolaou in New York
© Financial Times
