Defamation / Reputation
Johnson v. Steele
Closed Mixed Outcome
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The Superior Court of the State of Delaware gave a decision upon the motion to dismiss filed by Fox Corporation and Fox Broadcasting Company in one of the several cases before the court relating to media coverage of Dominion’s role in the 2020 presidential election. In the present case, Dominion sought to extend the liability for allegedly defamatory statements published by the Fox News Network to its parent company, Fox Corporation, and a wholly owned subsidiary of Fox Corporation, the Fox Broadcasting Company. The Court denied the motion to dismiss filed by the defendants, ruling that Dominion adequately pleads actual malice on behalf of Fox Corporation and that the latter is directly liable for the allegedly defamatory statements published by Fox News. On the other hand, the Court granted the motion to dismiss with regards to Fox Broadcasting, as Dominion failed in adequately pleading “actual malice” on the part of Fox Broadcasting.
US Dominion, Inc. is a Delaware corporation with Dominion Voting Systems, Inc. and Dominion Voting Systems Corporation as its subsidiaries (the plaintiffs), engaged in the business of electronic voting softwares and hardwares. Fox Corporation and Fox Broadcasting (the defendants) are Delaware entities headquartered in New York, with Fox Broadcasting and Fox News wholly owned by Fox Corporation. This case is one of several that the plaintiffs had filed in the court relating to media coverage of Dominion’s role in the 2020 presidential election.
The plaintiffs had filed a complaint on March 26, 2021. In US Dominion, Inc. v. Fox News Network, LLC, 2021 WL 5984265 (Del. Super. Dec. 16, 2021) (Dominion I), Dominion alleged that Fox News Network published defamatory statements accusing Dominion of election fraud with regard to media coverage of Dominion’s role in the 2020 presidential election. Fox News predicted that former President Trump had lost the State of Arizona which turned out to be correct, but also angered former President Trump and his political allies who made a number of public statements denouncing Fox News which resulted in a decline of the audience of Fox News as well as negatively impacted the stock value of Fox Corporation. Dominion claimed that after this, Fox entities decided to further President Trump’s election fraud narrative to win back viewers and began connecting Dominion with the election fraud narrative [p. 3]. The court in Dominion I held that Dominion had adequately pleaded actual malice by Fox News [p. 7].
In the current case, the plaintiffs filed a complaint to extend liability for the same statements to Fox News’s parent company, Fox Corporation, and another of Fox Corporation’s wholly owned subsidiaries, Fox Broadcasting Company, LLC [p. 1].
Justice Eric M. Davis of the Superior Court of the State of Delaware presided over this case. The major issue for consideration was whether the defendants could be held liable for the defamatory statements made through Fox News.
The defendants had contended that the statements were not defamatory in the first instance. However, the court stated that the statements had already been considered in Dominion I and refused to re-litigate its holdings in Dominion I as the defendants had failed to show any reason for carrying out such an exercise. The court further observed that it would be inappropriate to litigate Fox News’ underlying liability in an action where it was not a party [p. 11].
With regard to the liability of Fox Corporation, the court found that the complaint pleaded facts permitting a reasonable inference that Fox Corporation participated in the creation and publication of Fox News’ defamatory statements. The particulars of this inference included (i) reliance on Fox News by the Fox Corporation as main profit vehicle, (ii) control over day to day operations by the Executives, (iii) close involvement of the executives with decisions relating to Fox News’ coverage of the 2020 Presidential Elections, (iv) belief of Fox Corporation executives that Fox News would benefit from endorsing former President Trump’s election fraud narrative and would suffer by not doing so, (v) pressure from the Executive of Fox Corporation on Fox News to acquire the audience back and perpetuate false claims about Dominion, (vi) reward was attached with the compliance with the instructions, and punishment was attached with the non-compliance with the instructions. The aforementioned reasons were found sufficient by the court at the pleading stage to make Fox Corporation “responsible in law” [p. 15-16].
Further, based on the level of control and decision-making powers exercised by the executives in issuing the instructions and the rewards and punishment attached to the instructions, the court found that Dominion had adequately pleaded facts supporting a reasonable inference that Fox Corporation proximately caused Dominion’s alleged injury [p. 18].
With regard to the claim of actual malice, the court expounded that actual malice required proof that the individual responsible for the allegedly defamatory statements had knowledge that the statements were false or recklessly disregarded the truth, which in turn required proving that the defendant “entertained serious doubts as to the truth of the publication or … had a high degree of awareness of its falsity” [p. 19]. The allegations against Rupert and Lachlan Murdoch, the executives of Fox Corporation supported a reasonable inference that Rupert and Lachlan Murdoch either knew Dominion had not manipulated the election or at least recklessly disregarded the truth when they allegedly caused Fox News to propagate its claims about Dominion. Thus, the court considered that Dominion satisfied the requirements of actual malice by identifying the individuals responsible at Fox Corporation for the broadcast [p. 20].
The claim against Fox Broadcasting failed as Dominion did not specify the person at Fox Broadcasting, responsible for publishing the defamatory statements and also failed to establish that such individuals knew the statements were false or acted in reckless disregard of their falsity or that they failed to investigate in the face of actual subjective doubts as to the accuracy of the story. Thus, Dominion failed to adequately establish that Fox Broadcasting acted with actual malice [p. 22-23].
Decision Direction indicates whether the decision expands or contracts expression based on an analysis of the case.
This case is one of more than a dozen lawsuits brought by Dominion and Smartmatic voting systems, not only against Fox News but also against One America News Network (OANN), Newsmax, Overstock CEO Patrick Byrne, MyPillow CEO Mike Lindell, and Trump attorneys Sidney Powell and Rudy Guiliani, on the grounds that they knowingly disseminated lies about the U.S. Presidential election for financial and political gain. Thus far, courts have allowed the cases to proceed finding the voting machine companies have adequately pleaded actual malice on behalf of the defendants, meaning they spread known falsehoods with reckless disregard of whether it was false or not.
Dominion argues that the conspiracy theories are undermining democratic governance and see the best way to address the social and business harms of disinformation is through the courts. Dominion’s website states “Lies and misinformation have severely damaged our company and diminished the credibility of U.S. elections, subjecting hardworking public officials and Dominion employees to harassment and death threats. Dominion is taking steps to right these wrongs through our judicial system.”
While the defendants claim that the suits threaten freedom of the press and their right to political speech, the outcome could be immensely important for setting standards on the spreading of verifiably false information by demonstrating that knowingly spreading harmful lies has consequences.
Global Perspective demonstrates how the court’s decision was influenced by standards from one or many regions.
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