The judge overseeing Dominion Voting Systems’ defamation lawsuit against Fox has announced that the parties “have resolved their case” and dismissed the jury just as the trial was to begin.
The announcement averts a prolonged trial in a case that exposed how the top-rated network chased viewers by spreading false claims about the 2020 presidential election.
The sudden announcement came after jurors had been seated and lawyers were preparing to make opening statements for a trial that had been expected to last six weeks.
A lawyer for Dominion said the settlement was for 787.5 million dollars (£633.6 million).
“The truth matters. Lies have consequences,” said Dominion lawyer Justin Nelson in a news conference outside the courthouse after the announcement.
Jury selection earlier on Tuesday in the voting machine company’s 1.6 billion dollar (£1.29 billion) defamation lawsuit against Fox News came a day after the judge granted a one-day delay that offered time to see if the two sides could work out a settlement.
Dominion had asked for 1.6 billion dollars in arguing that Fox had damaged its reputation by helping peddle conspiracy theories about its equipment. Fox said the amount greatly overstated the value of the Colorado-based company.
The settlement was announced by the judge in the case, who allowed the case to go to trial while emphasising that it was “crystal clear” that none of the allegations about Dominion aired on Fox by allies of former president Donald Trump was true.
Records released as part of the lawsuit showed how Fox hosts and executives did not believe the claims by Mr Trump’s allies but aired them anyway, in part to win back viewers who were fleeing the network after it correctly called hotly contested Arizona for Democrat Joe Biden on election night.
If accepted by the judge, the settlement will end a case that has proved a major embarrassment for Fox News. If it had gone to trial, it would also have presented one of the sternest tests to a libel standard that has protected media organisations for over half a century.
Several First Amendment experts had said Dominion’s case was among the strongest they had ever seen. But there was real doubt about whether Dominion would be able to prove to a jury that people in a decision-making capacity at Fox could be held responsible for the network airing the falsehoods.
Ultimately, there appeared to be too much at risk for both sides to allow them to put the case in the hands of a jury.
The company sued both Fox News and its parent, Fox Corp.
During a deposition, Fox Corp chairman Rupert Murdoch, who founded the news network, testified that he believed the 2020 election was fair and had not been stolen from the former president.
“Fox knew the truth,” Dominion argued in court papers. “It knew the allegations against Dominion were ‘outlandish’ and ‘crazy’ and ‘ludicrous’ and ‘nuts’. Yet it used the power and influence of its platform to promote that false story.”
In a March 31 ruling, Judge Davis pointedly called out the news organisation for airing falsehoods while noting how the bogus election claims persist, two and a half years after Mr Trump lost his bid for re-election.
“The statements at issue were dramatically different than the truth,” Judge Davis said in his summary judgment ruling. “In fact, although it cannot be attributed directly to Fox’s statements, it is noteworthy that some Americans still believe the election was rigged.”
In its defence, Fox said it was obligated to report on the most newsworthy of stories — a president claiming that he had been cheated out of reelection.
“We never reported those to be true,” Fox lawyer Erin Murphy said. “All we ever did was provide viewers the true fact that these were allegations that were being made.”
Fox said Dominion had argued that the network was obligated to suppress the allegations or denounce them as false.
“Freedom of speech and of the press would be illusory if the prevailing side in a public controversy could sue the press for giving a forum to the losing side,” Fox said in court papers.
In a 1964 case involving The New York Times, the US Supreme Court limited the ability of public figures to sue for defamation. It ruled that plaintiffs needed to prove that news outlets published or aired false material with “actual malice” — knowing it was false or acting with a “reckless disregard” for whether or not it was true.
That has provided news organisations with stout protection against libel judgments. Yet the nearly six-decade legal standard has come under attack by some conservatives in recent years, including Mr Trump and Florida Governor Ron DeSantis, who have argued for making it easier to win a libel case.
Two Republican-nominated Supreme Court justices, Clarence Thomas and Neil Gorsuch, have publicly expressed interest in revisiting the protection.
Dominion’s attorneys argued that Fox made a deliberate decision to repeatedly air the false claims to appeal to viewers. They allowed guests to falsely claim that the company had rigged the election, flipped large numbers of votes to Mr Biden through a secret algorithm, was owned by a company founded in Venezuela to rig elections for Hugo Chavez, and bribed government officials.
“What they did to get viewers back was start this new narrative that the election had been stolen and that Dominion was the thief,” Dominion lawyer Rodney Smolla said during a March hearing.
A mountain of evidence — released in the form of deposition transcripts, internal memos and emails from the time — was damaging to Fox even if some of the material was only tangentially related to the libel argument.
Much of the material showed a network effectively terrified of its audience after its election night declaration that Mr Biden had won Arizona. The race call infuriated Mr Trump and many viewers who supported him.
“We don’t want to antagonise Trump further,” Mr Murdoch said in a November 16 memo.
Mr Biden narrowly won Arizona, but two executives responsible for the accurate election night call lost their jobs because of it two months later. In an internal memo, Mr Murdoch talked in mid-November about firing them.
Fox executives and anchors discussed how not to alienate the audience, many of whom believed Mr Trump’s claims of fraud despite no evidence to back them up. Fox’s Tucker Carlson suggested a news reporter be fired for tweeting a fact check debunking the fraud claims.
Some of the exhibits were simply embarrassing, such as scornful behind-the-scenes opinions about Mr Trump, including a Carlson text message that said “I hate him passionately”.