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Fox News, Giuliani circle drain in bid to duck defamation suit

A federal judge looked askance this morning at Fox's claim that its coverage of “unquestionably newsworthy” allegations of 2020 election fraud was protected.

MANHATTAN (CN) — The voting-technology company Smartmatic appeared likely Tuesday to advance a $2.7 billion defamation lawsuit against Fox News and Rudy Giuliani for pushing a baseless ballot-rigging conspiracy theory after the 2020 election.

Smartmatic’s complaint, filed in Manhattan Supreme Court, is one of the largest defamation complaints ever filed and, at 285 pages, is the first to target the lawyers Rudy Giuliani and Sidney Powell, as well as Fox News and three of the network's prime-time, on-air personalities: Lou Dobbs, Maria Bartiromo and Jeanine Pirro, herself a former Westchester County Supreme Court justice.

In the weeks after the November 2020 presidential election, the defendants each spent weeks advancing claims without evidence that Smartmatic had conspired with Democrats to ensure that then-President Donald Trump would not get a second term.

Now seeking to dismiss Smartmatic's lawsuit, Fox insists that its reports enjoy First Amendment protection.

“It was a widely shared opinion at the time,” Paul Clement, an attorney for the Fox defendants, said Tuesday morning, referring to the belief among Trump supporters that there had been widespread interference in the 2020 presidential election.

The claims proved to be a tough sell, however, for Justice David Cohen during a 3-1/2-videoconference on the case in which he carried out a claim-by-claim analysis on the specific words that the Fox host Dobbs used to discuss tampering.

“Alright, let’s get granular,” Cohen said, grilling Fox's attorney as to whether the network had any factual basis whatsoever to support claims Powell and Giuliani had made, including that the Smartmatic was banned in Texas.

"How is that not defamatory?" Judge Cohen asked. "Did any evidence ever come to light that Smartmatic was banned in Texas?"

Clement, who is with the Washington firm Kirkland & Ellis, responded that those specific allegations were made during an interview Dobbs conducted with Giuliani.

Photo included in a lawsuit that Dominion Voting Systems filed on Friday, March 26, 2021, against Fox News. (Image via Courthouse News)

Reporting the theories is not the same as endorsing them, Clement insisted, noting that the allegations were “unquestionably newsworthy” coming from Giuliani, who was at the time the personal attorney for the president of the United States.

Judge Cohen pressed Giuliani's Austin-based attorney Joe Sibley on the similar claim that Smartmatic was banned in the United Sates.

It “depends on what we mean by ‘banned,’" Sibley replied.

“I think it is substantially true that Smartmatic was ‘banned,’" Sibley argued, "because Smartmatic was not allowed to operate in U.S. elections, which is why they sold the U.S. arm to Dominion.”

Dominion Voting Systems has brought its own defamation claims against Giuliani and Powell, as has Eric Coomer, a Dominion employee who says he faced death threats because of bogus claims that the 2020 presidential election was rigged.

Smartmatic, which was founded in 2003, says it has processed more than 5 billion secure votes in a number of elections, but that it served only Los Angeles County during the 2020 election. Biden carried that county, a Democratic stronghold, by nearly 2 million votes.

Giuliani, who served as mayor of New York City and a federal prosecutor before joining forces with Trump, separately seeks dismissal of the complaint on the grounds that Smartmatic failed to plausibly demonstrate that he made the defamatory statements about Smartmatic with actual malice.

"Plaintiffs are required to plead and prove that Giuliani subjectively knew the complained of statements were actually false — not that he simply failed to do his homework or failed to follow all of the alternative evidence trails Plaintiffs claim laid before him," his motion to dismiss states (emphasis in original).

Clement has likewise claimed that there is no evidence that the Fox defendants exhibited “actual malice."

But Smartmatic says the defendants intentionally exaggerated the limited role it played in the 2020 election while painting it as a nefarious, shadowy corporation with international ties to socialist dictators.

The three Fox hosts leaned their separate motions to dismiss on a law designed to protect journalists. New York's anti-SLAPP statute, short for strategic lawsuit against public participation, applies to any individual looking to speak on issues of public importance, bona fide journalist or not.

Smartmatic attorney Erik Connolly scoffed Tuesday at the assertion that Fox’s reporting of the conspiracy claims fell “squarely within the fair report privilege,” as Clement argued.

“They are just private attorneys representing a private company,” Connolly said of Trump’s retention of Giuliani and Powell in November 2020. "You cannot simply say that they are related to President Trump and all the sudden cloak them with a government position or a public body position. That’s not how the privilege works.”

Smartmatic has urged Judge Cohen to reject Fox's First Amendment defense. “This is not a game,” Smartmatic wrote in an opposition brief. “The First Amendment does not provide the Fox Defendants a Get Out Of Jail Free card. The Fox Defendants do not get a do-over with their reporting now that they have been sued.

“Their decision to defame Smartmatic had real world consequences," the brief continues. "Smartmatic’s reputation will never be the same."

Smartmatic CEO Antonio Mugica was present on videoconference Tuesday but did not speak during the hearing.

Texas-based attorney Sidney Powell separately seeks dismissal based on jurisdiction grounds. She is represented by Howard Kleinhendler.

Smartmatic has sent retraction-demand letters to extreme right-wing news outlets One American News Network and Newsmax, and has stated that is is still considering suing them, as well. Dominion sued the two networks just last week.

The election conspiracy theory is not the first to have brought a defamation suit against Fox News. After it tried to tie the WikiLeaks dump of sensitive documents from Hillary Clinton's 2016 presidential campaign to the murder of Democratic National Committee staffer Seth Rich, Fox settled with Rich’s parents in November 2020 for an undisclosed amount. That suit originally had been dismissed in 2018 but was revived by the Second Circuit. 

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