Tucker Carlson speaks in Phoenix, Dec. 17, 2022. (Rebecca Noble/The New York Times)

Tucker Carlson speaks in Phoenix, Dec. 17, 2022. (Rebecca Noble/The New York Instances)

In August 2021, the Fox Corp. board of administrators gathered on the corporate’s film studio lot in Los Angeles. Among the many subjects on the agenda: Dominion Voting Methods’ $1.6 billion defamation lawsuit towards its cable information community, Fox Information.

The go well with posed a menace to the corporate’s funds and status. However Fox’s chief authorized officer, Viet Dinh, reassured the board: Even when the corporate misplaced at trial, it will finally prevail. The First Modification was on Fox’s facet, he defined, even when proving so might require going to the Supreme Court docket.

Dinh advised others inside the corporate that Fox’s doable authorized prices, at tens of tens of millions of {dollars}, might outstrip any damages the corporate must pay to Dominion.

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That dedication knowledgeable a collection of missteps and miscalculations over the subsequent 20 months, in accordance with a New York Instances evaluation of courtroom and enterprise information, and interviews with roughly a dozen individuals instantly concerned in or briefed on the corporate’s decision-making.

The case resulted in one of many greatest authorized and enterprise debacles within the historical past of Rupert Murdoch’s media empire: an avalanche of embarrassing disclosures from inside messages launched in courtroom filings; the most important recognized settlement in a defamation go well with, $787.5 million; two shareholder lawsuits; and the benching of Fox’s prime prime-time star, Tucker Carlson.

And for all of that, Fox nonetheless faces a lawsuit searching for much more in damages, $2.7 billion, filed by one other topic of the stolen election principle, voting software program firm Smartmatic, which may now construct on the proof produced within the Dominion case to press its personal appreciable claims.

Within the month for the reason that settlement, Fox has refused to remark intimately on the case or the various subsequent setbacks. That has left a string of unanswered questions: Why did the corporate not settle earlier and keep away from the discharge of personal emails and texts from executives and hosts? How did some of the doubtlessly prejudicial items of proof — a textual content from Carlson about race and violence — escape high-level discover till the eve of the trial? How did Fox’s pretrial evaluation so spectacularly miss the mark?

Repeatedly, Fox executives missed warning indicators concerning the harm they and their community would maintain, the Instances discovered. In addition they failed to acknowledge how far their cable information networks, Fox Information and Fox Enterprise, had strayed into defamatory territory by selling President Donald Trump’s election conspiracy theories — the central problem within the case. (Fox maintains it didn’t defame Dominion.)

When pretrial rulings went towards the corporate, Fox didn’t pursue a settlement in any possible way. Executives have been then caught flat-footed as Dominion’s courtroom filings included inside Fox messages that made clear how the corporate chased a Trump-loving viewers that most popular his election lies — the identical lies that helped feed the Jan. 6, 2021, Capitol riots — to the reality.

It was solely in February, with the overwhelming destructive public response to these disclosures, that Murdoch and his son with whom he runs the corporate, Lachlan Murdoch, started significantly contemplating settling. But they made no main try to take action till the eve of the trial in April, after nonetheless extra damaging public disclosures.

On the heart of the motion was Dinh and his overly rosy situation.

Dinh declined a number of requests for remark, and the corporate declined to answer questions on his efficiency or his authorized selections. “Discussions of particular authorized technique are privileged and confidential,” an organization consultant stated in an announcement.

Defenders of Dinh, a high-level Justice Division official beneath President George W. Bush, say his preliminary place was sound. Due to the energy of American free speech protections, Dominion wanted to clear a excessive bar. And unfavorable rulings from the Delaware choose who oversaw the case damage Fox’s probabilities, they argue.

“I believe Viet and Fox carried out simply the appropriate technique by transferring down two paths concurrently — first, mounting a powerful authorized protection, one which I believe would have ultimately gained on the appellate stage, and, second, constantly assessing settlement alternatives at each stage,” stated William Barr, the previous lawyer basic beneath Trump who labored with Dinh earlier in his profession.

After all, the case would have been tough for any lawyer. As the interior information confirmed, executives knew conspiracy theories about Dominion have been false but didn’t cease hosts and visitors from airing them.

That positioned Fox within the final hazard zone, the place First Modification rights give technique to the authorized legal responsibility that comes from knowingly selling false statements, referred to in legalese as “precise malice.”

An Unanswered Letter

The autumn of 2020 introduced Fox Information to a disaster level. The Fox viewers had come to count on favorable information about Trump. However Fox couldn’t present that on election night time, when its resolution desk workforce was first to declare that Trump had misplaced the essential state of Arizona.

Within the days after, Trump’s followers switched off in droves. Scores surged on the smaller right-wing rival Newsmax, which, in contrast to Fox, was refusing to acknowledge Joe Biden’s victory.

The Fox host who was the primary to discover a means to attract the viewers again was Maria Bartiromo. 5 days after the election, she invited a visitor, Trump-aligned lawyer Sidney Powell, to share particulars concerning the false accusations that Dominion, an elections expertise firm, had switched votes from Trump to Biden.

Quickly, wild claims about Dominion appeared elsewhere on Fox, together with references to the election firm’s supposed (however imagined) ties to the Smartmatic election software program firm; Hugo Chávez, the Venezuelan dictator who died in 2013; George Soros, the billionaire investor and Democratic donor; and China.

On Nov. 12, a Dominion spokesperson complained to Fox Information Media CEO Suzanne Scott and Fox Information Media Government Editor Jay Wallace, begging them to make it cease. “We actually weren’t enthusiastic about constructing a litigation file as a lot as we have been attempting to cease the bleeding,” Thomas A. Clare, considered one of Dominion’s attorneys, stated not too long ago at a postmortem dialogue of the case held by a First Modification advocacy group, the Basis for Particular person Rights and Expression.

As Fox famous in its courtroom papers, its hosts did start together with firm denials. However as they continued to provide oxygen to the false allegations, Dominion despatched a letter to Fox Information basic counsel Lily Fu Claffee, demanding that Fox stop and proper the file. “Dominion is ready to do what is important to guard its status and the security of its staff,” the letter warned.

It got here amid greater than 3,600 messages that Dominion despatched debunking the conspiracy theories to community hosts, producers and executives within the weeks after the election.

Such letters usually set off inside opinions at information organizations. Fox’s attorneys didn’t conduct one. Had they accomplished so, they could have realized of an electronic mail that Bartiromo obtained in November about considered one of Powell’s unique sources on Dominion.

The supply intimated that her info had come from a mix of goals and time journey. (“The wind tells me I’m a ghost however I don’t consider it,” she had written Powell.)

Dan Novack, a First Modification lawyer, stated that if he ever stumbled upon such an electronic mail in a shopper’s recordsdata, he would “bodily wrest my shopper’s checkbook from them and settle earlier than the police arrive.”

Fox, nonetheless, didn’t reply to the Dominion letter or adjust to its requests — now a key problem in a shareholder go well with filed in April, which maintains that doing so would have “materially mitigated” Fox’s authorized publicity.

The Case

Three months after the election, one other voting expertise firm tied to the Dominion conspiracy, Smartmatic, filed its personal defamation go well with towards Fox, searching for $2.7 billion in damages. Dominion advised reporters that it was making ready to file one, too.

Dinh was publicly dismissive.

“The newsworthy nature of the contested presidential election deserved full and honest protection from all journalists. Fox Information did its job, and that is what the First Modification protects,” Dinh stated on the time in a uncommon interview with authorized author David Lat. “I’m under no circumstances involved about such lawsuits, actual or imagined.”

Dinh was saying as a lot inside Fox, too, in accordance with a number of individuals aware of his actions on the time. His phrases mattered.

A refugee of Vietnam who fled the communist regime and landed along with his household in the USA just about penniless, he graduated from Harvard and Harvard Legislation and was a clerk for Justice Sandra Day O’Connor. As an assistant lawyer basic for Bush, he helped draft the Patriot Act increasing authorities surveillance powers. He and Lachlan Murdoch later grew to become so shut that Dinh, 55, is godfather to considered one of Murdoch’s sons.

Dinh took a hands-on strategy to the Dominion case, and ultimately break up with a key member of the surface workforce, Charles L. Babcock of Jackson Walker, in accordance with a number of individuals with data of the interior discussions.

After disagreement over the easiest way to formulate Fox’s protection, Jackson Walker and Fox parted methods. George Freeman, government director of the Media Legislation Useful resource Middle and a former assistant basic counsel for the Instances, stated Babcock’s exit had left Fox down a seasoned defamation protection lawyer. “He’s in all probability one of the best trial lawyer within the media bar,” Freeman stated.

By then, Dinh was fashioning the authorized workforce extra in his personal picture, having introduced in a longtime colleague from the Bush administration, former Solicitor Common Paul Clement.

Clement’s presence on the Fox workforce was itself a sign of Dinh’s willingness to take the case all the way in which to the Supreme Court docket — few members of the conservative authorized bar had extra expertise there.

Dinh employed Dan Webb, a former U.S. lawyer, for the position of lead litigator, succeeding Babcock. Webb was recognized for representing a beef producer that sued ABC Information over stories a couple of product typically known as “pink slime.” The case was settled in 2017 for greater than $170 million.

The Fox authorized workforce based mostly a lot of the protection on a doctrine generally known as the impartial reportage privilege. It holds that information organizations can’t be held financially accountable for damages when reporting on false allegations made by main public figures so long as they don’t embrace or endorse them.

“If the president of the USA is alleging that there was fraud in an election, that’s newsworthy, whether or not or not there’s fraud within the election,” Clement advised Jim Geraghty, a author for Nationwide Evaluate and The Washington Submit. “It’s essentially the most newsworthy factor possible.”

Fox remained so assured, the corporate stated in stories to buyers that it didn’t anticipate the go well with would have “a cloth opposed impact.”

However the impartial reportage privilege shouldn’t be universally acknowledged. Longtime First Modification attorneys who agree with the precept in principle had their doubts that it will work, provided that judges have more and more rejected it.

“Most astute media defamation protection attorneys wouldn’t, and haven’t for a really very long time, relied on impartial reportage — actually as a main line of protection, as a result of the chance {that a} courtroom would settle for it as a matter of First Modification legislation has continued to decrease over time,” stated Lee Levine, a veteran media lawyer.

An early warning got here in late 2021. The choose within the case, Eric M. Davis, rejected Fox’s try to make use of the impartial reportage protection to get the go well with thrown out altogether, figuring out that it was not acknowledged beneath New York legislation, which he was making use of to the case. Even when it was acknowledged, Fox must present it reported on the allegations “precisely and dispassionately,” and Dominion had made a powerful argument that Fox’s reporting was neither, the choose wrote in a ruling.

That ruling meant that Dominion, in making ready its arguments, might have entry to Fox’s inside communications in discovery.

That was a pure time to settle. However Fox caught with its protection and its plan, which at all times foresaw a possible loss at trial. “There was a powerful perception that the attraction might very properly be as essential, or extra essential, than the trial itself,” Webb stated on the postmortem dialogue of the case with Clare.

Issues Fall Aside

Fox executives didn’t foresee how daunting the invention course of would change into.

At almost each step, the courtroom overruled Fox’s makes an attempt to restrict Dominion’s entry to non-public communications exchanged amongst hosts, producers and executives. The largest blow got here final summer season, after a ruling stating that Dominion might evaluation messages from the private telephones of Fox staff, together with each Murdochs.

The consequence was a treasure trove of proof for Dominion: textual content messages and emails that exposed the doubts that Rupert Murdoch had concerning the protection airing on his community, and assertions by many inside Fox, together with Carlson, that fraud couldn’t have made a cloth distinction within the election.

The messages led to much more damaging revelations throughout depositions. After Dominion’s attorneys confronted Rupert Murdoch along with his personal messages displaying he knew Trump’s stolen election claims have been false, he admitted that some Fox hosts appeared to have endorsed stolen election claims.

That appeared to have undermined Fox’s protection. However Dinh advised Murdoch afterward that he thought the deposition had gone properly, in accordance with an individual who witnessed the change. Murdoch then pointed a finger within the path of the Dominion lawyer who had simply completed questioning him and stated, “I believe he would strongly disagree with that.”

Throughout Carlson’s deposition final 12 months, Dominion’s attorneys requested about his use of a crude phrase to explain ladies — together with a rating Fox government. In addition they talked about a textual content by which he mentioned watching a bunch of males, who he stated have been Trump supporters, assault “an Antifa child.” He lamented within the textual content, “It’s not how white males combat,” and shared a momentary want that the group would kill the particular person. He then stated he regretted that intuition.

Carlson felt blindsided by the extent of the questions, in accordance with associates and confirmed by a video leaked to left-leaning group Media Issues: “Ten hours,” he exclaimed to individuals on the set of his present, referring to how lengthy he was questioned. “It was so unhealthy, the hate I felt for that man,” he stated concerning the Dominion lawyer who had questioned him.

There isn’t any indication that Carlson’s texts tripped alarms on the prime of Fox at that time.

The alarms rang in February, when reams of different inside Fox communications grew to become public. The general public’s response was so destructive that some individuals on the firm believed {that a} jury in Delaware — which was more likely to be left-leaning — might award Dominion greater than $1 billion. But the corporate made no critical bid to settle.

With outstanding First Modification attorneys declaring that Dominion had an exceptionally sturdy case, a siege mentality appeared to set in.

Within the interview with Geraghty, Clement stated Fox was being singled out for its politics. In contrast to mainstream media, which are likely to report on main occasions the identical means and have energy in numbers, he stated, “conservative media, or anyone like Fox, is in a way more susceptible place.” He added, “In the event that they report it, and the underlying allegations aren’t true, they’re way more on the market on an island.”

Reflecting the view of Dinh’s supporters even now, Barr stated the “mainstream media stupidly cheered on Dominion’s case,” which he stated they might come to remorse as a result of it will weaken their First Modification protections. (He made the same argument in March in The Wall Road Journal.)

However Davis had decided that Fox had set itself aside by failing to conduct “good-faith, disinterested reporting” within the segments at problem within the go well with. That was largely why, simply earlier than opening statements, he dominated that Fox couldn’t make impartial reportage claims that the conspiracy principle was newsworthy on the trial, knocking out a pillar of Fox’s technique. (He additionally dominated that Fox had, certainly, defamed the corporate in airing the false statements.)

Webb, who had already drafted a lot of his opening assertion and examined it with a spotlight group, needed to take away key elements of his remarks, he stated within the post-trial dialogue with Clare.

The Administrators Step In

All alongside, the Fox board had been taking a wait-and-see strategy.

However the choose’s pretrial selections started to vary the board’s pondering. Additionally, in these closing days earlier than the trial, Fox was hit with new lawsuits. One, from former Fox producer Abby Grossberg, accused Carlson of selling a hostile work setting. One other, filed by a shareholder, accused the Murdochs and a number of other administrators of failing to cease the practices that made Fox susceptible to authorized claims.

The weekend earlier than trial was to start, with jury choice already underway, the board requested Fox to see the interior Fox communications that weren’t but public however that might nonetheless come out within the courtroom.

That Sunday, the board realized for the primary time of the Carlson textual content that referred to “how white males combat.” Dinh didn’t know concerning the message till that weekend, in accordance with two individuals aware of the matter. Fox’s attorneys believed it will not come out at trial, as a result of it was not related to the authorized arguments at hand. The board, nonetheless, was involved that Dominion was ready to make use of the message to additional undermine the corporate with the jury.

In an emergency assembly that Sunday night, the board — with an eye fixed on future lawsuits, together with these from Smartmatic and Grossberg — determined to rent the legislation agency Wachtell, Lipton Rosen & Katz to research whether or not some other problematic texts from Carlson or others existed.

Over that very same weekend, Lachlan Murdoch advised his settlement negotiators to supply Dominion greater than the $550 million for which he had already obtained board approval.

In interviews, individuals with data of the deliberations disagreed about how a lot Carlson’s textual content contributed to the ultimate $787.5 million settlement value.

By the point the board realized of the message, the Murdochs had already decided {that a} trial loss might be way more damaging than they have been initially advised to count on. A considerable jury award might weigh on the corporate’s inventory for years because the appeals course of performed out.

“The distraction to our firm, the distraction to our progress plans — our administration — would have been terribly expensive, which is why we determined to settle,” Lachlan Murdoch stated at an funding convention this month.

However there was broad settlement amongst individuals with data of the discussions that the Carlson textual content, and the board’s initiation of an investigation, added to the stress to keep away from trial.

The textual content additionally helped result in the Murdochs’ resolution a couple of days later to abruptly pull Carlson off the air. Their view had hardened that their top-rated star wasn’t value all of the downsides he introduced with him.

Fox’s bother has not ended. Within the weeks for the reason that settlement and Carlson’s ouster, prime-time scores have dropped (though Fox stays No. 1 in cable information), and new plaintiffs sued the community, most not too long ago a former Homeland Safety official, Nina Jankowicz.

As considered one of Jankowicz’s attorneys stated in an interview, the Dominion case “indicators that there’s a path.”

Nonetheless pending is the Smartmatic go well with. In late April, Fox agreed handy over further inside paperwork referring to a number of executives, together with the Murdochs and Dinh. In an announcement harking back to Dinh’s early view of the Dominion case, the community stated that the $2.7 billion in damages sought by Smartmatic — working in just one county in 2020 — have been implausible and that Fox was protected by the First Modification.

“We can be able to defend this case surrounding extraordinarily newsworthy occasions when it goes to trial, seemingly in 2025,” the assertion stated.

c.2023 The New York Instances Firm