Defamation trial against Fox News to proceed following delay

The trial in the $1.6 billion defamation lawsuit by Dominion Voting Systems against Fox Corp (FOXA.O) and Fox News will proceed with jury selection resuming on Tuesday rather than on Monday as previously scheduled, a judge said on Monday.

Delaware Superior Court Judge Eric Davis did not provide a reason for the delay in the trial, stemming from Fox's airing of false claims that the Denver-based company's machines were used to rig the 2020 US presidential election in favor of Democrat Joe Biden over Republican-then President Donald Trump.

A source familiar with the matter told Reuters on Sunday that Fox had been pursuing a possible settlement. The Washington Post and the Wall Street Journal also reported that Fox was pursuing settlement talks, citing sources.

After jury selection, which began last week, is completed on Tuesday, opening statements to the 12-member panel would then be scheduled to take place on Tuesday, the judge said.

Dominion sued Fox Corp and Fox News. The trial is one of the most closely watched U.S. defamation cases in years, involving a leading cable news outlet with numerous conservative commentators. The primary question for jurors is whether Fox knowingly spread false information or recklessly disregarded the truth, the standard of "actual malice" that Dominion must show to prevail in a defamation case.

Rupert Murdoch, the chair of Fox Corp, is set to testify during the trial, along with a parade of Fox executives and on-air hosts, including Tucker Carlson, Sean Hannity and Jeanine Pirro.

The trial is considered a test of whether Fox's coverage crossed the line between ethical journalism and the pursuit of ratings, as Dominion alleges and Fox denies.

Fox has said the $1.6 billion in damages being sought by Dominion is unrealistic and based on flawed economic modeling. An expert report commissioned by Dominion attributed scores of lost contracts to Fox's coverage, though much of the report remains under seal.

Fox Corp reported nearly $14 billion in annual revenue last year.

Fox claimed in filing on Sunday that Dominion had agreed to knock off more than $500 million of its damages claim. Fox's filing cited a Friday email from a Dominion lawyer saying that Dominion would not pursue its lost profit claim at the trial.

A Dominion spokesperson disputed that characterization on Monday, saying in an email that the company's damages have not changed.

Dominion has said Fox's conduct was damaging to American democracy and that the network must be held accountable, while Fox said on Friday that Dominion's lawsuit was a threat to press freedom.

Davis on Wednesday sanctioned Fox News, handing Dominion a fresh chance to gather evidence after Fox withheld records until the eve of the trial.

The evidence to be presented in the trial includes recordings of Rudy Giuliani, Trump's lawyer, saying in pre-taped Fox appearances that he did not have any evidence to back up the false allegations of election rigging by Dominion. The recordings were made by a former Fox producer named Abby Grossberg in her separate lawsuit against the network.

Davis said he would also very likely tap an outside investigator to probe Fox's late disclosure of the evidence and take whatever steps necessary to remedy the situation, which he described as troubling.

Dominion has said defamatory statements were aired on Fox shows including "Sunday Morning Futures," "Lou Dobbs Tonight" and "Justice with Judge Jeanine." Dominion alleges that Fox staff, ranging from members of the newsroom to the board of directors, knew the statements were false but continued to air them to avoid losing viewers to far-right outlets.

Dominion also cites evidence that some hosts and producers thought the guests spreading the false statements, including former Trump attorneys Giuliani and Sidney Powell, could not back up their allegations.

Fox had argued that coverage of the vote-rigging claims was inherently newsworthy and protected by the U.S. Constitution's First Amendment guarantee of press freedom. Davis rejected that argument in a ruling last month.

Fox has also said that Dominion cannot pin actual malice on the individuals Dominion has said were responsible for the defamatory statements.

Fox has said Dominion must prove that a "superior officer" at the network or its parent company "ordered, participated in, or ratified" wrongdoing. The network has argued that doubts about the claims among certain individuals cannot be attributed to the organization as a whole.