Prof. Cary Coglianese and Amanda Shanor, Asst. Prof. at Wharton, offer insight into the recent settlement in the Fox News defamation case.
Fox News has agreed to pay $787.5 million to settle a defamation suit brought by Dominion Voting Systems.
When Judge Davis issued a ruling last month, he handed Dominion a win on all but one issue the company needed to prevail against Fox. This upped the pressure on Fox to settle. The judge had ruled that Fox aired false, damaging statements about Dominion. And that left just one issue left over which Dominion needed to convince a jury: Did Fox act with actual malice? Today’s record-setting settlement suggests that Fox was far from sure that it would keep Dominion from winning on that last element in the case.
The Associated Press has featured Coglianese’s commentary on the case, noting the rulings by Judge Eric Davis that preceded the settlement agreement:
Davis methodically went through 20 different times on Fox when allegations against Dominion were discussed, ruling that all of them were fully or partly considered statements of fact, and fair game for a potential libel finding.
“A lawsuit is a little bit like hitting a home run,” said Cary Coglianese, law professor at the University of Pennsylvania. “You have to go through all of the bases to get there.” The judge’s rulings “basically give Dominion a spot at third base, and all they have to do is come home to win it.”
Coglianese’s commentary on the case has also been featured at Reuters and KNX News on Demand.
Coglianese is a globally renowned expert on regulatory law, analysis, and management who has produced extensive action-oriented research and scholarship. He has consulted with regulatory organizations around the world and is a founding editor of the peer-reviewed journal Regulation & Governance. He also created and continues to serve as the faculty advisor to the PPR’s flagship publication, The Regulatory Review.
Amanda Shanor, Assistant Professor of Legal Studies and Business Ethics at The Wharton School, offered her perspective:
Is the settlement good news for free speech or democracy? Both yes and no. The magnitude of that price tag puts news organizations on notice that the sort of knowing misinformation that Fox commentators peddled about the 2020 election can have dramatic financial consequences — a possibility that may alter business and journalistic practices around the country.
The settlement also demonstrates that we are not in a fully post-truth world: facts still matter. At the same time, Fox’s statement that the settlement reflects its “continued commitment to the highest journalistic standards” indicates that Fox itself may not have learned that lesson.
A pretrial settlement, however, means that the public lost out on a fuller airing of Fox’s intentional peddling of election misinformation. The briefing and pre-trial proceedings have already uncovered the first-hand involvement of Fox executives and personalities, including Rupert Murdoch, Tucker Carlson, and Sean Hannity. This evidence made clear that although they knew that Donald Trump lost the election and that claims otherwise were false, Fox persisted with a counter-narrative to retain viewers. A public trial might have helped more Americans see through that story and agree about the election’s outcome.
The Dominion settlement also shows that the standard for defamation that the Supreme Court announced in New York Times v. Sullivan — that the First Amendment only allows liability for falsehoods made about public figures if the speaker knows the statements are false or speaks with reckless disregard for whether or not they are false — may be highly speech-protective but is not toothless. The First Amendment doesn’t, and shouldn’t, protect knowing lies about elections like those in the Dominion case.
Fox isn’t out of trouble. There are still other lawsuits both against the news company and Trump attorneys, Rudy Giuliani and Sydney Powell. The big question is what ripple effects the Dominion settlement and those other cases will have on the media ecosystem, its journalistic practices, and its business models. We can hope that big enough ticket penalties for misinformation may put a break on the incentives the attention economy creates for companies to tell consumers only want they want to hear and create echo chambers where lies — even ones going to the basis of our democracy — are not only possible, but profitable.
Shanor’s scholarship focuses on constitutional law, and particularly the intersection of the First Amendment and economic life. She has taught courses at Yale Law School and Georgetown University Law Center and has published in the New York University Law Review, Harvard Law Review Forum, and Yale Law Journal Forum, among others. Shanor is a regular contributor to the legal blog “Take Care” and the co-author of a textbook on counterterrorism law.
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