Trump headaches to dog Fox and the Murdochs in 2025

Rupert Murdoch has sailed into the new year with more bad news in tow, even as the media mogul strives to resolve the succession struggle that threatens the future of his empire.

Just days after Christmas, Fox Corporation lost a motion in the US courts to dismiss a lawsuit from his fellow investors.

They are seeking to hold the Murdochs personally liable for Fox News pushing claims that the 2020 US election was stolen, with voting machines from Smartmatic and Dominion largely to blame, despite knowing this was false.

Rupert Murdoch will not escape the legal repercussions of Fox News’ reporting of claims that the 2020 presidential election was stolen from Donald Trump.Credit: Reuters/AP

At the heart of the issue is what role the Murdochs, and Fox Corp board members, played as the network struggled to keep faith with right-wing viewers who were deserting it after it dithered over the issue in the days following the 2020 election result.

Fox has already settled the Dominion defamation claim in 2023 for a record $US787 million cash. Meanwhile, Smartmatic – which is also suing Fox for defamation – is still in the pre-trial information gathering stage of its case, but a trial date is expected to be set for later this year if Fox’s latest motion to dismiss the case fails.

Trump’s unwillingness to believe his 2020 loss prompted him to encourage supporters to head to the US Capitol, which they stormed.Credit: Getty Images

Comments from a court hearing last month suggest this matter will go to trial.

According to Bloomberg reports, New York Supreme Court associate justice Saliann Scarpulla said the allegations “support a straight-up defamation claim”.

And if Smartmatic succeeds, Fox investors want the Murdochs to be held personally liable for the financial damage being wrought by the election fraud claims, rather than all Fox Corp shareholders.

On December 27, vice chancellor J. Travis Laster, of Delaware’s Chancery Court, found that investors had sufficiently argued that Murdoch faces a “substantial likelihood” of being found liable for allowing Fox News to broadcast defamatory content about voting machine maker Smartmatic.

Laster cautioned that the investor victory “does not mean that the plaintiffs will prevail at trial” but rather that “their claims have some merit”.

More worryingly, in light of the recent family battle for control of Murdoch’s controlling shareholding in both Fox and News Corp, Laster found that it is not Rupert who has the most to fear from the lawsuit.

He noted that Lachlan Murdoch – the heir apparent – attended daily meetings with Fox executives as the controversy played out and said: “If anything, the claim against Lachlan is stronger.”

According to a CNN report, Smartmatic has already sought access to court documents from Rupert Murdoch’s failed bid to alter an irrevocable family trust.

His plan was to ensure Lachlan retained control after his father’s death – rather than splitting control with his three eldest siblings – and ensuring News Corp and Fox retained their conservative positioning.

‘Rupert and Lachlan Murdoch ordered a hit.’

Smartmatic’s lawyer J. Erik Connolly

Smartmatic is hoping the inference of family interference in editorial matters might aid its case. If successful, it could mean details of the family battle will be made public for the first time.

Fox did not respond to requests for comment for this story, but has previously said it was engaging in journalism with its reporting on the election, and said Smartmatic’s claims are “intended to chill First Amendment freedoms”. This is a reference to the First Amendment of the US Constitution giving a right to free speech and press freedom.

Smartmatic’s Legal Counsel Erik connolly, said the facts of the matter are not in dispute: Lachlan and Rupert Murdoch control Fox News, and Fox employees knowingly lied and defamed Smartmatic repeatedly in November and December 2020; they have never apologised for these actions.

“Smartmatic’s efforts to hold Fox Corporation and Fox News accountable for knowingly spreading false, defamatory, and harmful information continue with a trial expected later this year,” he said.

“Rupert and Lachlan Murdoch ordered a hit. They saw the ratings take a huge dive, they saw their stock price taking a dive. So Rupert and Lachlan Murdoch said, ‘Oh, if we aren’t embracing this disinformation, it’s going to be a problem’,” Connolly told the court in an earlier hearing.

“We have extensive emails … discussing that they have a gameplan to pivot. The pivot is the disinformation. It’s not a coincidence.”

The moment of truth for Smartmatic investors – including LinkedIn billionaire Reid Hoffman, who injected funding last year to help with its legal battle against Fox – could come as a trial date nears.

It was on the eve of the 2023 trial with Dominion that Fox agreed to pay $US787.5 million to avoid the matter going to court. It was the largest-ever out-of-court defamation settlement.

Dominion had been seeking $US1.6 billion from Fox.

“This settlement reflects Fox’s continued commitment to the highest journalistic standards,” Fox said at the time.

“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.”

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