Fox loses bid to pause Smartmatic defamation case in wake of charges against voting machine company

MANHATTAN (CN) — A New York state judge on Monday morning denied Fox’s motion to pause the $2.7 billion defamation lawsuit brought by voting machine company Smartmatic until newly filed federal corruption charges against the voting technology company are handled.

“I don’t find that there’s good cause for a stay,” New York State Supreme Court Justice David B. Cohen said Monday, ruling against Fox’s request to halt proceedings in Smartmatic’s 2021 civil defamation case until the federal indictment is resolved. “This would cause undue delay.”

With no stay in effect, Smartmatic’s case is scheduled to advance arguments to summary judgment next week.

Smartmatic applauded the judge’s decision Monday.

“Today’s decision is an important victory for Smartmatic as we progress in our efforts to hold Fox accountable for its lies," a spokesperson said. “The court made clear that Fox’s attempts to delay accountability won’t work, and its day of reckoning is coming.”

Smartmatic sued Fox Corporation and its right-wing news network in early 2021 over broadcasts that falsely claimed the company interfered in the 2020 presidential election.

Federal prosecutors in Florida charged Smartmatic in an Oct. 16 superseding indictment accusing the voting machine company under the Foreign Corrupt Practices Act of a conspiracy to bribe a Philippine government official $1 million in exchange for over $180 million in contracts related to that nation’s 2016 elections.

In light of those federal charges, Fox argues the company’s criminal indictment warrants a stay of the pending civil defamation case in New York state court and further discovery as to the reputational damages Smartmatic claims.

“Smartmatic’s entire case is built on the premise that Fox News’ coverage of the 2020 election somehow destroyed Smartmatic’s ‘perfect record’ as the ‘most successful voting company in the world’ and forever harmed its ‘stellar reputation’ as a company that has operated ‘without a single incident,’" the company wrote in its motion for a stay. “DOJ’s allegations, if proven, directly refute that fable.”

Fox attorney Winn Allen argued Monday that the criminal case was “powerful rebuttal evidence” against Smartmatic because the outcome of the bribery and money laundering charges would have had an enormous impact on the $2.7 billion enterprise valuation and lost profits that Smartmatic asserts in its defamation case.

“We’re in a fundamentally different place than we were in before,” the Kirkland Ellis lawyer said.

“They previously made a big deal out of how Smartmatic had not been indicted,” he said. “Well now they have — now SGO, the parent company, has been indicted.”

Allen said Smartmatic’s business came mostly from two clients: Los Angeles County and the Philippines, meaning the contracts at issue in the criminal indictment made up about half of the company’s average annual revenue.

The superseding indictment, brought in the Southern District of Florida, charged SGO Corporation Limited — commonly known as Smartmatic or the Smartmatic Group — as well as three of its executives and the former head of the Commission on Elections in the Philippines. The four individuals were initially indicted in August 2024.

Attorneys for Smartmatic meanwhile argued the motion for a stay was a drastic remedy based on a “false narrative” in the indictment.

“The DOJ could have made a criminal complaint that was broad and similar to how Fox is portraying it, but they didn’t,” Smartmatic attorney J. Erik Connolly, from Benesch, Friedlander, Coplan & Aronoff, said Monday morning.

“The FCPA case has no connection with the underlying charge of libel,” Connolly said, rebutting the relevancy and admissibility of discovery requested by Fox in the criminal case.

Smartmatic accused Fox of requesting the stay as a “procedural gambit that allows Fox to escape accountability for an egregious campaign of defamation.”

“Fox has already sought — and the court has three timesrejected — discovery on identical DOJ allegations,” company wrote in a court filing opposing the stay. “Fox will do anything to avoid a decision on the merits, as illustrated by its settlement of Dominionfor $787.5 million on the courtroom steps. Fox hopes Smartmatic will capitulate if summary judgment and trial are delayed long enough.”

Representatives for Fox expressed disappointment at Cohen’s ruling on the motion to stay, but said the company looks forward to prevailing on summary judgment and at trial.

“While we respectfully disagree with the court’s decision not to pause the case at this time, it doesn’t change the fact that Smartmatic—a company that describes itself as putting ‘integrity over profits’ —has been indicted by a federal grand jury for international bribery and money laundering and has a criminal trial currently scheduled for next Spring," a Fox spokesperson said Friday afternoon.

Earlier this year, Fox lost a bid to depose Reid Hoffman, the billionaire LinkedIn co-founder who invested $25 million into Smartmatic’s long-running litigation.

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