Fox to pay $787.5m settlement in Dominion defamation trial settlement

[EnterpriseSovereign]

Fox to pay $787.5m settlement in Dominion defamation trial settlement

Voting maching company Dominion has reached a $787.5 million (£633.6m) settlement in a defamation lawsuit with Fox.

Dominion Voting Systems had asked for $1.6 billion in arguing that Fox had damaged its reputation by helping peddle false conspiracy theories about its equipment switching votes from former President Donald Trump to Democrat Joe Biden.

Fox said the amount greatly overstated the value of the Colorado-based company.

An attorney for Dominion confirmed the multimillion-dollar settlement figure on Tuesday.

“The truth matters. Lies have consequences,” Dominion lawyer Justin Nelson said in a news conference outside the courthouse after the announcement.

The judge overseeing the lawsuit earlier 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, owned by media mogul Rupert Murdoch, chased viewers by spreading false claims about the 2020 presidential election.

The sudden announcement came after jurors had been seated and attorneys were preparing to make opening statements for a trial that had been expected to last six week.

A statement from Fox said the settlement reflected the network's "continued commitment to the highest journalistic standards.

"We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues.”

Records released in the lawsuit showed that Fox hosts and executives did not believe the claims made by Trump's allies but aired them anyway.

During a statement, Fox Corporation 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.”

Judge Eric Davis called out the news organisation for airing false claims while noting how the bogus election claims persist, two and a half years after Trump lost his bid for re-election.

“The statements at issue were dramatically different than the truth,” 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 re-election.

“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.

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 scared of its audience after its election night declaration that Biden had won Arizona.

The race call infuriated Trump and many viewers who supported him.

One of Fox’s top news anchors, Bret Baier, noted the audience’s anger and suggested rescinding the call, even awarding the state to Trump.

“We don’t want to antagonise Trump further,” Murdoch said in a November 16 memo.

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, Murdoch talked in mid-November about firing them.

Fox executives and anchors discussed how not to alienate the audience, many of whom believed 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 Trump, including a Carlson text message that said, “I hate him passionately.”

[LadyTevar]

I'll bet all $787mil of that Fox agreed to the settlement because they did NOT want Murdoch et al placed on the stand to testify, and Murdoch himself made the call for the lawyers to "make it go away".

[Mr Bean]

We all wanted this to come to trial, the fact it did not is a sad day

[bilateralrope]

Pity Dominion didn't bring it to trial. But we still have all those people who admitted, under oath, that Fox lied. We still have Fox lying to the court and saying that Murdoch wasn't running Fox News. We still have a very clear loss in them settling for that much money, showing that suing Fox can be profitable.

Hopefully that's enough for someone else to sue Fox over other lies.

[Gerald Tarrant]

A snippet from the NYTimes link

The case held the potential to make public a stream of damaging information about how the network told its audience a story of fraud and interference in the 2020 presidential election that many of its own executives and on-screen personalities did not believe. And the network was not forced to apologize — a concession that Dominion lawyers had sought, lawyers involved in the case said.

Sorry if it's paywalled <shrug>. Pretty galling that Fox got away without an apology. I guess the Dominion team was worried Fox could get away with saying they were "just reporting someone else's views (and who would expect a news agency to practice journalism and verify someone else's views?"). I think the discovery has to have gotten them what they really wanted and that might help regain trust from some of their customers.

[Broomstick]

Here is a "gift" link to the article without a paywall, everyone should be able to read it:

link

[Zaune]

We all wanted this to come to trial, the fact it did not is a sad day

That they're out four-fifths of a billion dollars, which is the kind of pain in the wallet that will make even a News Corporation brand wary of fucking up that way a second time, is a certain amount of consolation.

[Alferd Packer]

And another company, Smartmatic, is still pursuing their $2.7 billion lawsuit against Fox.

[bilateralrope]

And another company, Smartmatic, is still pursuing their $2.7 billion lawsuit against Fox.

How easy would it be for them to get the transcripts or the depositions in Dominion's lawsuit ?

[Alferd Packer]

From what I've read, this settlement comes with no restrictions of any kind. Dominion can say whatever they want about the case, and use the money however they see fit. Like, say, refusing to agree to a settlement in their suit with MyPillow guy and run him out of business, because they now have cash on hand that is more than 50 times their annual revenue and, well, he probably doesn't.

And this doesn't even cover News Corp's newest liability: their shareholders. There's no way that Fox get hit with a class action suit for reckless management, or fiscal malfeasance, or something related to an almost 1 billion dollar fuckup.

[Soontir C'boath]

"If Fox can write off the full settlement payment to Dominion, it could amount to an estimated $213 million in tax savings for the company."

Fox Can Claim Tax Writeoff For Defamation Settlement

Fox’s massive settlement with private equity-backed voting machine company Dominion Voting Systems didn’t just spare the conservative news organization from a lengthy public defamation trial or a full public reckoning for its election lies — it could also mean a tax break as large as $213 million, according to a Lever review.

On Tuesday, Fox News and its parent company Fox Corporation agreed to pay a $787 million settlement to Dominion, the largest-known media defamation payout in U.S. history, concluding two years of litigation over the news network’s false claims that the 2020 election was rigged.

Thanks to an arcane line in the tax code, Fox can deduct that settlement payment from its income taxes, according to a company spokesperson and tax experts consulted by The Lever. That’s because federal law allows taxpayers to write off many legal costs, providing that they are “ordinary and necessary” business expenses. The IRS has repeatedly affirmed that for major corporations, paying out settlements is just part of the cost of doing business.

In Fox’s case, that business involved ginning up false claims that the 2020 election was stolen from former President Donald Trump.

“If your business model is to tell lies so that you’ll get viewers and have lots of advertising revenues, then, odious though this business model may be, the tax system’s job is to tax you on the profits that you actually make from it,” Daniel Shaviro, a professor of tax law at NYU, told The Lever. “And those profits are indeed reduced when you are successfully sued by the victims of your malicious falsehoods.”

Brian Nick, Fox Corporation’s chief communications officer, told The Lever that “I can confirm tax deductibility but not the amount.”

Exceptions to these tax write-off rules exist for settlement payments in sexual harassment or abuse cases with non-disclosure agreements. Fox has paid out several such sexual harassment settlements, including a 2016 settlement with former host Gretchen Carlson, and also settled with shareholders in 2017 for creating a culture of sexual harassment that had a negative effect on the company’s value.

Tax law also prohibits deductions for most fines and penalties paid to the government. But when corporations cut deals to settle claims of legal wrongdoing with the government, they often reap tax benefits.

That was the case for major corporate settlements between banks and the federal government after the financial crisis, and between drug companies and localities amid the opioid crisis.

When JPMorgan settled with the federal government in 2013 over charges that the bank lied about the quality of mortgages it underwrote, $11 billion of the $13 billion settlement was tax deductible, news reports indicated.

At least $2.7 billion of a $5 billion settlement between the government and Goldman Sachs in 2016 for that bank’s misconduct in the leadup to the financial crisis was tax deductible, earning the company a $936 million tax rebate. Of an $11.6 billion settlement between Bank of America and the federal government in 2014, $10 billion was tax deductible, ensuring the bank a $4 billion windfall from the IRS.

The 2017 Republican tax law, the Tax Cuts and Jobs Act, amended the IRS statute so payments to government entities could not be deducted if they were related to the “violation of any law,” but were deductible if they constitute “restitution” or “remediation” payments or are the cost of “coming into compliance with a law.”

The drug companies that paid a combined $26 billion to settle litigation in 2021 over their roles in the opioid crisis indicated in financial filings they intended to recoup more than $4.5 billion from deducting the settlements from their taxes. (Congress asked the Biden administration to investigate the planned write-offs in March 2022.)

However in the case of settlements between private entities, the entity making the payment can deduct the cost entirely — while the recipient pays corporate income taxes on it.

Fox Corporation reported $1.2 billion in net income in 2022, so the $787 million Dominion settlement is equivalent to about two-thirds of the company’s profits last year.

However, Fox could save hundreds of millions of dollars in taxes on the settlement payment. The firm reported paying an effective income tax rate of 27 percent in 2022 — a combination of federal and New York corporate taxes. If Fox can write off the full settlement payment to Dominion, it could amount to an estimated $213 million in tax savings for the company.

If any of Fox’s settlement payment is covered by insurance, Fox could not write off that portion of the payment. However, the company would then be able to deduct any subsequent higher premiums triggered by an insurance payout.

[Ralin]

Thanks to an arcane line in the tax code, Fox can deduct that settlement payment from its income taxes, according to a company spokesperson and tax experts consulted by The Lever. That’s because federal law allows taxpayers to write off many legal costs, providing that they are “ordinary and necessary” business expenses. The IRS has repeatedly affirmed that for major corporations, paying out settlements is just part of the cost of doing business.

In Fox’s case, that business involved ginning up false claims that the 2020 election was stolen from former President Donald Trump.

I mean, sounds legit when you put it that way.

[Gandalf]

Indeed, it's perfectly legitimate, and quite amusing.

Fox really scored a win in not having this go to trial.

[Zaune]

Son of a motherfucker.

[EnterpriseSovereign]

Doesn't that sort of last-minute settlement happen all the time in civil lawsuits?

[Eternal_Freedom]

Doesn't that sort of last-minute settlement happen all the time in civil lawsuits?

As someone who works in the civil courts in the UK, yes. All the time. In fact we actually count on it so we can get can get cases listed in time and still have Judges with a full day's worth of hearings - if we stuck to one 1 day trial per day, it'll settle and leave the Judge with nothing to do. So we list 2.5 a day, and all bar one (and sometimes more) settle.

Hell, I had one once where it was day one of a ten-day trial, with a claimed value in the millions, due to start at 10:00 and the counsel asked for a twenty-minute delay for discussion. They settled it. Judge wasn't entirely happy given the amount of reading he'd done, but then I fetched him a coffee and a smoke and all was well.

[bobalot]

Doesn't this open the door for more lawsuits?

[bilateralrope]

I've heard that Jack Smith has been requesting some of the evidence that Dominion acquired.

[Gerald Tarrant]

Tucker is out at Fox

Here is the latest on Tucker Carlson’s departure from Fox News.
Fox News on Monday abruptly parted ways with Tucker Carlson, its most popular prime-time host and one of the most influential voices on the American right.

The network made the announcement less than a week after it agreed to pay $787.5 million in a defamation lawsuit in which Mr. Carlson’s show, one of the highest rated on Fox, figured prominently for its role in spreading misinformation after the 2020 election.

Mr. Carlson’s program became a must-watch for conservatives during the presidency of Donald J. Trump, an ideological ally and occasional confidante of Mr. Carlson’s. Both men helped push hard-right positions on issues like immigration reform and race relations into the Republican mainstream, and both relished ways to antagonize their political opponents with audacious and often untrue attacks.

Here is what else to know:

In making its announcement, Fox offered a terse statement of gratitude. “Fox News Media and Tucker Carlson have agreed to part ways. We thank him for his service to the network as a host and prior to that as a contributor,” it said. His last program was on Friday, Fox said.

Mr. Carlson was given no heads-up that his time at Fox News had drawn to an end, according to two people with knowledge of the timing of the conversation. The anchor was told of the network’s decision on Monday morning, and his senior executive producer, Justin Wells, was also out of a job.

Mr. Carlson, 53, had helmed his prime time show “Tucker Carlson Tonight” since 2016. In 2021, he signed a new deal with Fox News expanding into podcasts and a series called “Tucker Carlson Originals” for the streaming service Fox Nation.

A Fox spokeswoman said Mr. Carlson’s show would be replaced with a new program called “Fox News Tonight” that would feature rotating Fox News personalities until a new host is named.

Mr. Carlson is also facing a lawsuit from a former Fox News producer, Abby Grossberg, who claims that he presided over a misogynistic and discriminatory workplace culture. Ms. Grossberg said in the lawsuit, which was filed in March, that on her first day working for Mr. Carlson, she discovered the work space was decorated with large pictures of House Speaker Nancy Pelosi wearing a swimsuit.

In April 2022, The New York Times examined how Mr. Carlson positioned himself to inherit the movement that grew around President Trump as he constructed what may be the most racist show in the history of cable news.

There's a little more at the link about the lawsuit details. Apparently Russia Today's Twitter account offered him a job.

In a strange coincidence Don Lemon got fired from CNN today too. Maybe News companies are tired of anchors making the news instead of reporting it. Don Lemon and CNN part ways

[edit]I should mention, I think this looks like Fox is getting rid of the worst offender about election lies[/edit]

[Solauren]

Simply put, anything less then a complete victory for Fox leaves them open to other lawsuits for similar issues. Combine that with the lawsuit against Tucker....

Fox may have decided to stop being so blatantly political (and maybe fact checking), to avoid future lawsuits over different shows like this. (They'll have to put up with any lawsuits about Tucker or his crap, but if they're pro-active they could prevent others).

[Broomstick]

This one lawsuit and settlement cost them three quarters of a billion dollars. Exactly how many more of those could the company survive?

[Zaune]

This one lawsuit and settlement cost them three quarters of a billion dollars. Exactly how many more of those could the company survive?

Depends how long it takes Congress to do something about the legal loophole that's letting them deduct the entire sum from their taxes, I guess.

[Solauren]

This one lawsuit and settlement cost them three quarters of a billion dollars. Exactly how many more of those could the company survive?

Fox was estimated (quick google search) at being worth 16.8 Billion. Plus whatever they make per year.

So, based on that, 2 - 3 more could see an upper management change. 6 or more could see serious shake up.

And it also depends on if 'reorganizing' into a new company would have an effect to avoid lawsuits.

i.e Fox as it exists becomes owned by ' Fox-New-Corp', with all it's assets transferred to the new company, with 'old Fox' being left with some bits and pieces.

[Rogue 9]

This one lawsuit and settlement cost them three quarters of a billion dollars. Exactly how many more of those could the company survive?

Depends how long it takes Congress to do something about the legal loophole that's letting them deduct the entire sum from their taxes, I guess.

That doesn't get them all the money back, though, it just reduces what's counted as their taxable income. For instance, I was allowed to deduct 10% of my total retirement savings for the year from my taxes, but I didn't just get 10% of my retirement savings back; it netted me like $14 by exempting that amount of my income from taxation. They're still losing hundreds of millions of dollars on the deal.

[Ralin]

You don't. Things get more complicated when you're talking about that level of money and corporations that big. Though I don't pretend to know all the ins and outs.