(Bloomberg) -- Ever since Fox News was hit with a $1.6 billion defamation lawsuit over reports falsely accusing a voting-machine company of rigging the 2020 presidential election, the conservative network has invoked the broad protections of the First Amendment in its defense.

But the constitutional right to free speech doesn’t automatically protect the spreading of false facts, especially bogus allegations of criminal conduct, Delaware Superior Court Judge Eric M. Davis said Friday in a ruling denying a bid by Fox News to avoid a trial in the suit by Dominion Voting Systems Inc.

“The evidence developed in this civil proceeding demonstrates that is CRYSTAL clear that none of the statements relating to Dominion about the 2020 election are true,” Davis wrote, using capital letters as well as bold and italic fonts for emphasis.

The Fox reports falsely accused Dominion of rigging its software to flip votes away from Donald Trump and paying government officials to use its machines — on top of claiming it was founded in Venezuela “to rig elections for dictator Hugo Chavez,” Davis said. Those claims were defamatory because they were false and struck at the integrity of Dominion’s business, he said.

“The statements also seem to charge Dominion with the serious crime of election fraud,” the judge said. “Accusations of criminal activity, even in the form of opinion, are not constitutionally protected.”

The ruling wasn’t a total win for Dominion, which asked the judge to grant the company a complete victory without having to go to trial on April 17. 

Instead, the judge ruled that a jury must decide several key issues, including whether Fox News made the defamatory statements with “actual malice,” meaning the network knew they were false or had reckless disregard for the truth. The jury will also decide if the network’s parent, Fox Corp., is liable for the false statements and whether Dominion actually suffered any financial damages.

The witness list includes Fox Chairman Rupert Murdoch and top Fox News personalities whose emails and text messages were made public in the case, revealing they knew the conspiracy theory was bogus even as the network amplified it over and over by hosting Trump’s outspoken allies.

“This case is and always has been about the First Amendment protections of the media’s absolute right to cover the news,” Fox News and Fox Corp. said in a statement. “Fox will continue to fiercely advocate for the rights of free speech and a free press as we move into the next phase of these proceedings.”

Dominion, a little-known company before it was falsely accused of a vast fraud, said it’s looking forward to trial.

“We are gratified by the court’s thorough ruling soundly rejecting all of Fox’s arguments and defenses, and finding as a matter of law that their statements about Dominion are false,” Dominion said in a statement.

Falsity of Statements

The judge’s summary judgment ruling spares the jury from having to determine for itself whether the disputed statements were false. While the conspiracy theory has been debunked by multiple courts over the last two years, the finding on falsity is still significant because the statements were “dramatically different than the truth,” the judge said, adding: “Fox takes a nuanced approach to falsity.”

“In fact, although it cannot be attributed directly to Fox’s statements, it is noteworthy that some Americans still believe the election was rigged,” Davis wrote.

To help establish falsity, Dominion gave its source code to experts for both sides, the judge said. “Dominion’s expert stated it was unable to detect any mechanism to switch votes, which no Fox expert has contested,” Davis said. As for the allegedly corrupt algorithm used by Dominion, Fox witnesses admitted the “algorithm lie” was “false or lacks evidence,” the judge said.

Fox dedicated “little to its argument” on the question of falsity, Davis said.

Neutral Reporting

Davis denied Fox’s motion for summary judgment on the so-called neutral reporting privilege, which bars recovery for defamation when a challenged statement, even if defamatory, is “newsworthy.” Fox argued that the average viewer “would understand the statements as mere allegations to be investigated, rather than facts.”

But Davis said that earlier rulings under New York law barring use of the so-called neutral-reporting privilege are “binding on this court.”

“Even if the neutral report privilege did apply, the evidence does not support that FNN conducted good-faith, disinterested reporting,” Davis wrote, referring to Fox News Networks. Fox’s “failure to reveal extensive contradicting evidence from the public sphere and Dominion itself indicates its reporting was not disinterested.”

Dominion argues the real purpose of Fox’s reports was to avoid losing Trump-supporting viewers who are crucial to its bottom line.

Fair Reporting 

The judge also rejected Fox’s “fair report” defense, which protects defamatory statements if they are a “fair and true report” about an “official proceeding.” Fox tried to apply the defense to false claims about Dominion that were put forth in lawsuits by one of its guests, former Trump campaign lawyer Sidney Powell, who accused Dominion of “the most massive and historical egregious fraud the world has ever seen.” But that’s not official enough, Davis said.

“The privilege is not triggered unless the report comments on a proceeding, not the underlying events of such a proceeding,” Davis wrote, adding that reports must still be “substantially accurate.” 

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In a pair of February court filings Dominion outlined evidence it established during the case, including a deposition of Murdoch, who admitted that some Fox talent “endorsed” the bogus conspiracy theory. Dominion also cited internal Fox News documents, text messages and emails to undermine the network’s claim that the reports were merely important news.

For example, Fox News host Dana Perino described the theory in texts and emails at the time as “total bs,” “insane,” and “nonsense,” according to evidence presented by Dominion. Sean Hannity, one of Fox’s biggest stars, sent a text message at the time saying Powell, the architect of the conspiracy theory, was an “F’ing lunatic,” Dominion said.

The case is Dominion Voting Systems v. Fox Corp., N21C-11-082 EMD CCLD, Delaware Superior Court (Wilmington).


(Updates with details from ruling)

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