The news from a New York appeals court that Fox News will have to face a nearly $3 billion defamation suit from Smartmatic — a company that makes voting machines — signals gathering legal peril for the media behemoth and reminds that defamation, while difficult to prove, is not a dead letter. 

By a 5-to-0 tally, the judges of the Appellate Division at Manhattan — an intermediate court — ruled that Smartmatic had shown in “detailed fashion” how Fox hosts and guests “effectively endorsed and participated in [defamation] with reckless disregard for, or serious doubts about” voter fraud. 

The case turns on Fox’s coverage of the allegations that Smartmatic’s voting machines were rigged to favor President Biden in the 2020 presidential election. Smartmatic argues that Fox News knew — or should have known — that the theory was false, but pushed it for financial gain and to keep viewers from defecting to alternatives like Newsmax and One America News.    

The ruling, rebuffing a motion by Fox News to dismiss the suit, was not on the merits of the case but rather a determination of whether Smartmatic has met its burden of proof to move forward. The judges also reinstated previously dismissed claims against television personalities Rudolph Giuliani and Jeanine Pirro.

In an ominous sign for Fox News, the judges found that Smartmatic’s complaint was “meticulously detailed” and contained  “significant allegations” that in its “coverage and commentary” Fox “effectively endorsed and participated” in false statements about Smartmatic with “reckless disregard.”   

Fox News struck a defiant note despite the setback, noting in a statement that there is “nothing more newsworthy than covering the president of the United States and his lawyers making allegations of voter fraud.” It added: “Freedom of the press is foundational to our democracy and must be protected.” 

Smartmatic’s case has now been seen as viable by both trial and appellate judges, as this latest win comes on the heels of a green light from a state supreme court jurist, David Cohen, in March. Judge Cohen saw enough to surmise that Fox News “turned a blind eye to a litany of outrageous claims” about the voting machines.

Smartmatic’s success in pushing its case is mirrored in a parallel suit brought by Dominion, another voting machine company. That litigation is based in Delaware, and seeks $1.6 billion in damages. A similar suit is under way against Newsmax. Smartmatic is also eyeing roping in the Fox Corporation, not just the news division.   

The climate in which these claims are brought features substantial headwinds for defamation plaintiffs. A Supreme Court case from 1964, New York Times Company v. Sullivan, set the standard; “actual malice” is required to show defamation, meaning to a defamatory statement “was made with knowledge of its falsity or with reckless disregard of whether it was true or false.” 

While Fox News appears to be on the hook for eye-watering sums should it ultimately lose in court, it is likely that any award would be covered by general liability insurance, which as a matter of course covers libel and defamation claims. 

Even as the cases against Fox News wend their way through New York state and Delaware courts, another high-profile defamation suit awaits hearing on appeal. The riders of the United States Court of Appeals for the Second Circuit are due — at some point —  to hear Governor Palin’s arguments that she was defamed in the opinion pages of the New York Times.