Fox News settles Dominion's defamation lawsuit for $787.5 million over election conspiracy theories just as the trial is about to start

• Fox News settled Dominion's defamation lawsuit over election conspiracy theories for $787.5 million.
• The litigation has already spilled Fox's secrets into the open.
• Fox still faces a major legal threat from Smartmatic, another election technology company.

WILMINGTON, Delaware — Fox News settled Dominion Voting Systems's blockbuster defamation lawsuit just as it was about to go to trial, agreeing to pay it $787.5 million.

"The parties have resolved this case," Delaware Superior Court Judge Eric M. Davis said in court Tuesday afternoon.

It is the largest publicly disclosed settlement for a defamation lawsuit in US history.

Davis, who has been presiding over the case, previously decided to push back the start of the case one day, giving lawyers for both sides an extra day to devote to settlement discussions.

The settlement is a victory for Dominion, which no longer has to contend with the prospect of a six-week trial and potentially years of grueling appeals if it had won.

But it also means that Fox News's many detractors won't get to see the right-wing media network's biggest executives and stars — including Rupert Murdoch, Tucker Carlson, and Sean Hannity — grilled on the witness stand.

Fox News hosts will not be required to issue retractions or many any other statements under the terms of the agreement, a person familiar with its terms told Insider.

In a press conference after Davis announced the settlement, Justin Nelson, an attorney for Dominion, said the $787.5 million payout represented "vindication and accountability."

"People across the political spectrum can and should disagree on issues even of the most profound importance," he said. "For our democracy to endure for another 250 years and hopefully much longer, we must share a commitment to facts."

Dominion CEO John Poulos criticized Fox for broadcasting lies about the company and thanks election officials throughout the US.

"Fox has admitted to telling lies about Dominion that caused enormous damage to my company, our employees, and the customers that we serve," he said. "Nothing can ever make up for that."

In its own statement, Fox News said it was "pleased to have reached a settlement" which it claimed represented a commitment to journalistic standards.

"We acknowledge the Court's rulings finding certain claims about Dominion to be false," a Fox spokesperson said in an emailed statement. "This settlement reflects FOX'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."

Settlement talks have been brewing

On Sunday night, Davis pushed back the trial's start from Monday to Tuesday. Several outlets reported that both sides were in settlement discussions.

At the same time, on the court docket, each side slung filings arguing over technical issues that could determine how much Dominion would be able to claim in damages in the trial.

On Tuesday morning, the case still seemed headed to trial as Davis completed jury selection. Dominion and Fox each had about two dozen lawyers present in court.

But Davis extended the jurors' lunch break by more than two hours as he retreated to his chambers — beckoning attorneys from both parties to join him — and gave rise to more speculation among the journalists assembled in court that a settlement was imminent.

Dominion filed its lawsuit against Fox News and its parent company, Fox Corp., in March 2021. It alleged the network defamed it when its hosts Jeanine Pirro, Maria Bartiromo, and Lou Dobbs brought on conspiracy theorist lawyers Rudy Giuliani and Sidney Powell as guests.

Trump hired Giuliani and Powell to challenge his loss in the 2020 election. The two spun a fantastical, false tale claiming Dominion — in cahoots with rival election technology company Smartmatic — rigged the election by switching votes from Trump to now-President Joe Biden.

Fox News hosts, Dominion alleged, either endorsed or didn't sufficiently push back against those claims when they invited Powell and Giuliani on their shows.

Davis had already ruled it was "CRYSTAL clear that none of the Statements relating to Dominion about the 2020 election are true," and that Dominion only had to prove Fox acted with "actual malice" — the legal standard for defamation cases involving public figures. Fox, for its part, claimed it was simply reporting the news and that its broadcasts were protected by the First Amendment. First Amendment experts overwhelmingly believed it was Dominion's case to lose.

In brief remarks on Tuesday afternoon, Davis thanked the jurors for their service and praised attorneys from both Fox and Dominion for their professionalism and the quality of their legal briefs.

"I've been on the bench since 2010, and I think this is the best lawyering I've ever had — ever," he said.

Fox News's secrets have already been spilled

Two years of litigation have already dealt Fox heavy blows.

In court filings leading up to the trial, Dominion shared excerpts from numerous depositions, texts, and emails from Fox's executives, hosts, and producers. They depicted a newsroom desperately trying to stay on Trump's good side while fending off competition from Newsmax, a further-right media network that more explicitly embraced his election lies. Fox News was more interested in protecting its viewership ratings than reporting the news, Dominion argued.

Internal messages showed that Powell shared an email demonstrating her claims of election fraud relied in part on someone claiming to be a time-traveling headless ghost. Carlson, Hannity, Laura Ingraham, and multiple producers all privately believed she had taken leave of her senses, though they didn't say as much on air and were slow to accept Biden's electoral victory anyway. People close to Murdoch believed Giuliani, for his part, was frequently drunk. Ingraham called him an "idiot."

Carlson — the Fox News host with the highest primetime ratings — said in texts that he "passionately" hated Trump and thought him a "demonic force" who nonetheless had the capacity to "destroy" the network. He and Hannity tried to get a Fox News reporter fired when she fact-checked Trump on Twitter.

"We are very, very close to being able to ignore Trump most nights," Carlson wrote as he lost the 2020 election. "I truly can't wait."

Murdoch had recognized that Fox News's audience was in Trump's thrall and said it "would have been stupid" to alienate them. After the January 6, 2021, insurrection at the US Capitol, he said it was time to make Trump a "non-person."

Throughout this period, Dominion sent Fox 3,600 fact-checking messages, which it said were widely circulated throughout the network. One executive "received Dominion's fact check so many times that on November 14 he wrote a colleague: 'I have it tattooed on my body at this point,'" Dominion lawyers wrote in a filing.

After being told that Dobbs ran false information about election fraud on one of his shows, one producer responded, "Jesus Christ. Does anyone do a fucking simple google search or read emails?" according to a filing. A top executive said "the North Koreans do a more nuanced show" than Dobbs.

As for airing ads from Mike Lindell — the MyPillow CEO who shared an even more outlandish conspiracy theory about Dominion and Smartmatic than the one pushed by Powell and Giuliani — Murdoch agreed in a deposition that he was happy to take his money.

The case has also been beset by late twists. The judge has admonished Fox's lawyers for withholding certain discovery evidence until right before the start of the trial. And Abby Grossberg, a former producer for Carlson and Bartiromo, alleged that Fox's attorneys coached her answers in a deposition given for Dominion's lawsuit.

"They're activists, not journalists," Grossberg said of Fox News producers in court filings.

Fox is not out of the woods

The prospect of shareholder lawsuits may complicate any payout to Dominion. One such lawsuit, already working its way through Delaware Chancery Court, alleges Fox Corp. breached its fiduciary duties by allowing Fox News to broadcast election lies and expose it to litigation from Smartmatic and Dominion.

A settlement, First Amendment experts say, may also make Fox the target of future defamation lawsuits from plaintiffs who believe they'll get a payout. Murdoch already has a record of settling lawsuits: A Washington Post analysis found his companies paid out nearly $750 million over the past 13 years to settle legal claims, including sexual harassment and hacking allegations.

A potentially greater risk is a case from Smartmatic, which asks for $2.7 billion in damages. That lawsuit, filed in New York state court, also names Giuliani as a defendant. (The company's lawsuit against Powell is progressing through a court in Washington, DC, for jurisdictional reasons.) Court filings indicate that Smartmatic has drawn on some of the evidence in the Dominion lawsuit for its own case.

"Dominion's litigation exposed some of the misconduct and damage caused by Fox's disinformation campaign. Smartmatic will expose the rest," Smartmatic attorney J. Erik Connolly said in a statement Tuesday. "Smartmatic remains committed to clearing its name, recouping the significant damage done to the company, and holding Fox accountable for undermining democracy."

Dominion and Smartmatic both have a passel of other pending lawsuits against Newsmax and another right-wing media outlet, One America News, as well as a number of conspiracy theorist influencers.

Ahead of the settlement Tuesday, there were some minor signs of drama in the case.

Davis appointed a special master to investigate potential "discovery issues" with Fox News withholding potential evidence in the case. One juror, moments after he was sworn in, said aloud "I can't do it." The judge took him aside, excused him, and designated an alternate with the consent of both parties a short while later.

At 8:55 a.m., five minutes before the day's court session began, officers escorted out a Fox News spokesperson sitting in the back of the courtroom who had taken a photo and instructed her to delete it. Davis reminded the attorneys and throng of reporters seated in the room to abide by his orders forbidding any form of broadcast.

"You have to abide by the official order. If you don't, there will be consequences," he said. "It's not a joke."

"We have people in the courtroom who are moles," he added, to loud laughter from the attorneys and nervous chuckles from some journalists.

In the afternoon, after Davis announced the parties reached a settlement, gasps could be heard in the courtroom. Journalists ran outside the courtroom to file their stories.

While Dominion's team gave a press conference, Fox's lawyers walked away and declined to comment.