Fox News Stumbles Into 1st Amendment

Dominion has landed a flurry of blows in discovery and pre-trial filings, from embarrassing revelations about behind-the-scenes discord at the network’s promotion of zany election conspiracy theorists down to the sloppy “discovery misconduct” of Fox’s lawyers on the eve of trial, which led to judge’s sanction.

With the rumble finally set to go down Monday morning in Delaware Superior Court, and Fox Corp. Chairman Rupert Murdoch himself expected to be called to testify right out of the gate, surely there’s more hard knocks in store.

“Fox is in trouble,” said Douglas Mirell, a veteran litigator in First Amendment, entertainment and other media law, told TheWrap. “Serious, serious trouble.”

Mirell and other legal experts say that at the outset Dominion appears to have a strong case — with enough heft not just to potentially win the billion-dollar-plus damages claim it is seeking, but to completely reset libel and defamation law for the first time since the Supreme Court instituted the “actual malice” standard in 1964 with New York Times v. Sullivan.

That landmark First Amendment case went the newspaper’s way, a huge win for the press to criticize politicians and other public figures, largely because the court took the unusual extra step of setting the “actual malice” standard. Its ruling established that publishers must have been aware of, or recklessly oblivious to, defamatory or libelous statements.

Times v. Sullivan will loom large in Dominion v. Fox. If Fox successfully defends, it will likely be on “actual malice” grounds, and a 60-year-old free speech precedent will hold. But if Fox loses and appeals, the stakes only get raised.

It may seem that Fox’s repeated losses and blunders over the past months don’t augur well for a win. But Fox has to be thinking about what’s at the end of this road: a Supreme Court with a more favorable opinion of the conservative cable network’s politics than, say, a Delaware jury may be.

But the road to get to the steps of the Supreme Court One looks rocky. And even a victory in the highest court for Fox could be Pyrrhic, should the justices choose to redraw the lines of what “defamation” means. For instance, the Supreme Court could absolve Fox of paying massive damages while still tightening the rules for publishers. Or, by upholding a lower court’s judgments against Fox, create a chilling effect on traditional media.

There future holds too many variables to account for, but one thing it doesn’t hold: Fox’s preferred defense strategy.

Fox had been busily crafting a “newsworthiness” argument, suggesting the First Amendment protects its right to cover newsmakers and their opinions about a newsworthy event even if they turn out to be wrong – in this case, Donald Trump and his circle of allies, including attorneys Sidney Powell and Rudy Giuliani opining about unproven fraud in the 2020 presidential election.

Then Delaware Superior Court Judge Eric Davis, who’s already made headlines with his pre-trial rulings –including a rare one in Fox’s favor, declaring the Jan. 6 Capitol insurrection “irrelevant” and off-limits — last week made the surprise declaration that Fox’s “newsworthiness” argument was so weak, so easy to pick apart, that he promised to rebuff defense attorneys if they attempted to use it.

And so back to the drawing board Fox lawyers would have to go, with a major pillar of their plan pulled out from under them.

Dominion says its reputation was materially damaged by Giuliani and Powell’s suggestions in the days and weeks after the 2020 presidential election that the voting machines’ algorithms threw ballots from Donald Trump to Joe Biden and that the company had shady ties to Venezuela. Neither of those assertions turned out to be based in fact.

Mirell said the network didn’t do itself any favors when top hosts like Sean Hannity and Tucker Carlson featured and at times supported those assertions on air, but privately asserted that they give them no credence. Those hosts and several others are also expected to be called as witnesses.

“I’m less persuaded that Fox had people on as guests spouting lies than with their on-air hosts endorsing those lies on-air, at a point in time when it was absolutely clear that these claims did not hold water,” Mirell said. “And at a point, they are not [protected by the First Amendment]. If they were simply reporting what was in a publicly filed document or something, they would be protected. But this?”

But to win this case, Dominion must also clear the “actual malice” bar, meaning the network knowingly allowed false claims on its air — and it’s a high one. Dominion lawyers have been laying the foundations to meet that definition, presenting evidence that Fox News hosts and top brass were internally repulsed by “stolen election” theories — but hung in with the narrative because it was necessary in order to retain viewers loyal to Trump.

“This is one of those cases — very rare — where the evidence points to the existence of ‘actual malice,’” Mirell said. “You want to talk about a lawsuit that’s been filed, has any chance in hell of prevailing, you can do that. That’s not a problem. It’s when you then say words to the effect that ‘Boy, this is really bad news, Sidney Powell,’ or ‘This is really awful, Rudy Giuliani,’ you essentially pander to your guests’ conspiracy theory and then endorse it. That’s where the rubber meets the road. That’s why this case is so terribly unusual.”

Fox’s reputation as a pugilistic conservative bastion throws another wrinkle into the prospects for a successful First Amendment defense, adding a political layer that only steepens their climb. It also makes it a compromised candidate for reexamining New York Times v. Sullivan.

“This is one of those cases not unlike Bush v. Gore — it’s an important issue, but it’s the wrong case to decide it,” said Andrew Brettler, a Los Angeles entertainment and media attorney who recently won a defamation case. “It’s become so politicized … the legal analysis has ben corrupted by the politicization of the issues. Sullivan needs to be looked at again, I just wish it were with a different case.”

But you go to battle with the army you have. Brettler said Sullivan is certainly due for an update, even if the case isn’t ideal.

“The world has changed so much since [1964] … we’ve got social media, the legal standard for who’s a public figure .. the president we just had … of course it needs to be re-examined,” he said.