Fox shareholder sues Rupert Murdoch, other directors over 2020 election coverage

[April 12, 2023]  By Jody Godoy and Helen Coster

(Reuters) - A Fox Corp shareholder sued Chairman Rupert Murdoch and four other board members on Tuesday, saying they failed to stop Fox News from reporting falsehoods about the 2020 U.S. presidential election that damaged its credibility and prompted lawsuits.

Shareholder Robert Schwarz alleged in the lawsuit filed in Delaware Chancery Court that the directors breached their duties to ensure that Fox followed its own ethical standards and avoided reputational risk, and instead sought to keep supporters of former U.S. President Donald Trump tuned in.

"FOX knew – from the Board on down – that Fox News was reporting false and dangerous misinformation about the 2020 Presidential election, but FOX was more concerned about short-term ratings and market share than the long-term damages of its failure to tell the truth," he said in the lawsuit, which did not say how many shares he owned.

A Fox representative did not immediately respond to a request for comment.
 

The lawsuit seeks damages for the company from Rupert Murdoch, his son and Fox Chief Executive Lachlan Murdoch, and fellow directors Chase Carey, Roland Hernandez and Jacques Nasser. It also seeks unspecified corporate governance reforms.

Schwarz said the board's failure to act on "red flags" subjected the network to defamation claims by two voting technology companies that Fox reported were involved in a conspiracy to steal the U.S. presidential election from Trump.

Together, the two lawsuits by Dominion Voting Systems and Smartmatic USA seek damages totaling $4 billion.

Donald Trump (R) speaks to media mogul Rupert Murdoch as they walk out of Trump International Golf Links in Aberdeen, Scotland, June 25, 2016. REUTERS/Carlo Allegri

The trial in the Dominion case is scheduled to begin in Delaware Supreme Court with opening statements on Monday and is expected to last five weeks.

Dominion alleges that Fox destroyed its business by knowingly airing false claims that its ballot counting machines were used to flip the results of the 2020 election. Fox has argued that election-rigging claims by Trump and his lawyers were inherently newsworthy and protected by legal doctrines concerning press freedom.

In March, a trove of exhibits in the lawsuit became public, including emails and statements in which Rupert Murdoch and other top Fox executives said the claims made about Dominion on-air were false.

The shareholder lawsuit cited filings in the Dominion lawsuit, which said Murdoch had acknowledged under questioning from Dominion lawyers that some Fox hosts had "endorsed" the idea that the election was stolen. Murdoch said in the deposition he believed Biden won fairly.

The case is Schwarz v. Murdoch et al., No. 2023-0418, Delaware Chancery Court.

(Reporting by Jody Godoy and Helen Coster in New York; Editing by Jamie Freed)

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