How Hard Lines in Fox-Dominion Deal Talks Suddenly Softened

On Tuesday morning, as the Dominion Voting Systems legal team walked from their hotel to the courthouse where they were finishing jury selection, one lawyer turned to another and whispered about a possible settlement. I was. “Do you have anything?”

“No, it’s not,” replied the other. They loaded the slide deck into the courtroom’s audiovisual system and geared up for opening statements.

Eleven hours after the $1 billion defamation lawsuit against Fox News, the deal appeared to have fallen apart.

One of Dominion’s biggest demands was a clumsiness with Fox. From Donald J. Trump he issued an official apology from the network for his role in implicating Dominion in a fictional algorithm-driven plot to steal the 2020 election. Fox’s insistence on not admitting any wrongdoing missed the mark for Dominion. The two companies whose lawyers exchanged dollar amounts over the weekend were also wide apart in settlement numbers.

But in a conference room down the hall from Judge Eric M. Davis’ courtroom in downtown Wilmington, Delaware, representatives from both sides weren’t giving up. In the room were Dominion chief executive John Poulos and one of his top investors, Staple Street Capital co-founder Hutan Yagubzadeh.

Calling from Los Angeles on behalf of Fox, Rupert and Lachlan Murdoch’s chief legal officer, Bet Ding, flew to New York to prepare to testify. Also called was a seasoned mediator whom the two sides had brought just 24 hours earlier. A veteran of wartime negotiations in the Balkans in the 1990s, he was on a Danube cruise with his wife.

Then, just as the judge took oath to the jury, the hard lines began to soften. And just before 4pm, he announced that the two sides had reached an agreement.

This account of how the talks came together to avoid the most serious defamation case to go to court in a generation is based on an interview with. Ten people who were closely involved in the negotiations or who had been briefed on the negotiations, most of them anonymously, revealed details of the secret meeting.

Arbitrator Jerry Roscoe declined to share details of the deal, but said in an interview that he has two key things at work. “Having a jury changes everything,” he said. “It’s a decision-making catalyst.”

Roscoe has struck a series of groundbreaking agreements that both sides can at least work on, adding new tension to the negotiations, according to people familiar with the matter. and recently brokered another case where their firm was on the other side.

The judge, who was personally urging the parties to find a way to settlement, took as much time as he could. He was visibly impatient when the jury finished eating a wrap and salad platter from nearby Cavanaugh’s.

Last weekend, Lachlan Murdoch allowed his team to increase the amount the company pays in an attempt to find a path to a deal. And during negotiations, as Fox’s offers increased, Dominion softened its final conclusion on admitting wrongdoing. Acknowledgment from Fox that it understood Judge Davis’ pretrial judgment against the network, including that it was

The resulting Fox statement was the fruit of a careful defense effort, saying it “acknowledges the court’s ruling that found certain claims about Dominion to be false,” which many of the network’s critics wanted. But it also gave Dominion lawyers the freedom to immediately announce the eye-popping sum they had won, $787.5 million, a message in itself. Once, Dominion attorney Stephen Shackelford told reporters outside the courthouse shortly after the trial’s abrupt end: “Money is accountability.”

The closing of the deal was surprising and unexpected. Neither side has seriously committed to a settlement since Dominion filed the lawsuit more than two years before him. The Dominion and his lawyers were backed up by emails, texts and depositions revealing that many inside Fox were concerned that the conspiracy theory propaganda about the Dominion machine was false. I liked the strength of the lawsuit.

And Mr. Ding, who heads Fox’s legal strategy, had advised the Murdochs that the case was viable — a judge’s pretrial ruling against Fox News and its parent company was more difficult than expected. Even as it showed, Fox continued to insist that they could win on appeal…the road for them in Delaware. Ding told his colleagues he believes the Supreme Court may find the case compelling and even take it up under the First Amendment.

But as Zoom’s hearings and court proceedings dragged on, Fox’s legal strategy repeatedly stalled and was tripped up by a series of miscalculations, bad breaks and missed opportunities for reconciliation.

Last summer, Fox replaced its legal team after a court granted Dominion access to messages from the personal phone and email accounts of Fox employees, including the Murdochs. That brought in Dan K. Webb, an experienced trial attorney and former federal prosecutor of Winston & Strawn, with a beef manufacturer ABC News linked with low-cost filler “pink slime.” negotiated a $177 million defamation settlement.

One of the reasons Fox and its new legal team continued to believe this case was winnable is because plaintiffs in libel litigation face a very high burden of proof. The Supreme Court has given media organizations considerable latitude to publish false information so long as it was not done intentionally or recklessly.

But Fox continued to lose decisions with judges, including his ruling that Dominion could sue the larger Fox Corporation in addition to Fox News, exposing Murdoch to more legal and financial hazards. it was done.

The court has repeatedly sided with Dominion in the discovery process, giving election firm attorneys broad access to private communications of Fox employees. Fox put forward a settlement offer last year, but the offer fell well short of what Dominion would consider, said people familiar with those discussions. With the ruling moving in Dominion’s favor, the attorney was surprised Fox didn’t make any further efforts to seal the deal.

In the months that followed, private exchanges between Fox hosts, producers and senior executives were made public across the country, criticizing and disparaging Mr. Trump and ridiculing his general counsel as a drug-addicted, drunken weirdo. The situation became clear. They expressed serious concern about the conspiracy theories their colleagues allowed on the air.

With so much embarrassing internal material exposed, the disclosure rocked the company, including Murdoch, top network executives and network stars.

One batch contained snippets from Mr. Murdoch’s own deposition. In it, he admitted that some of his hosts appeared to support a false election conspiracy theory. Mr. Murdoch seemed to have a different view than Mr. Ding about what happened to his deposition. After Ding said Justin Nelson, the Dominion attorney who led the interrogation, had “never touched you,” Murdoch pointed to Nelson and said, “He strongly disagrees with that.” I think so.”

Legally, Fox planned to defend itself with a theory known as “neutral press privilege.” This compensates the press for publishing “newsworthy” accusations about public figures, even if they are false.

However, the courts do not universally recognize that privilege. Judge Davis ruled that Fox could not use it as part of his defense.

Chris Mattei, the attorney who represented the Sandy Hook family in the defamation lawsuit against Infowars founder Alex Jones, said in an interview that the trial would be “a bloodbath for Fox.”

To make matters worse, this month a judge decided to allow the Dominion to issue a subpoena forcing Mr. Murdoch to appear in court, arguing that the aging media’s death by Dominion’s tenacious litigation team led by Dominion’s tenacious litigation team. The big shot – he’s 92 – presented the prospect of several hours of grueling interrogation. By Sussman Godfrey.

But it wasn’t a sure win for the Dominion either. The unpredictable nature of jurors (in this case, 12 and her six alternates were seated and told to prepare for a six-week trial) was a looming threat to voting technology companies. It was certainty. One juror broke down in court and claimed he couldn’t go through with it, so he was replaced after being sworn in. I was able to see another person asleep during the proceedings on Tuesday.

Dominion’s attorneys were ready to take the chance to the end, with the case ready to go after the 90-minute lunch break. Two of his attorneys, Mr. Nelson and Mr. Shackelford, sat at the plaintiffs’ table to prepare for the opening, while the third, David, her Brooke, sat in a conference room down the hall where the court and the settlement would be discussed. I went back and forth between It was done.

A presentation of about 60 slides was loaded onto the courtroom’s audiovisual system, some containing new and devastating revelations from private Fox internal communications. Mr. Shackelford, who would have delivered the Dominion’s opening argument, kept his microphone strapped to the collar of his suit jacket. His family watched from the audience.

So was the witness the Dominion was supposed to call first, Tony Flatt, a former Bush administration official. He would have walked the jury through a timeline of key moments in Fox’s coverage of the aftermath of the 2020 election. to no avail.

The legal team was putting the finishing touches on a carefully choreographed first week. Rupert Murdoch will be his second witness on Wednesday, followed possibly by Tucker Carlson on Thursday. Brooke planned to proactively question him about the vulgar and misogynistic text messages about Sydney Powell.

Nelson was still working on questions to ask Murdoch on Wednesday and had not prepared a statement should the case be resolved. When I learned about

“Truth matters,” he wrote. “Lies have consequences.”

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