On April 20, 2023, Wolf Popper LLP commenced a derivative action alleging breaches of fiduciary duty against the directors of Fox Corporation (NASDAQ: FOXA). The action arises from the aftermath of the 2020 presidential election, where Fox broadcasted and repeated on Fox News and its other media platforms false statements accusing two voting technology companies, U.S. Dominion, Inc. and Smartmatic USA Corp., of conspiring to steal the election from Donald Trump in favor of Joseph Biden. As a result of these statements, Smartmatic and Dominion commenced defamation suits against Fox, alleging $4.5 billion in specified damages in addition to unquantified punitive damages. On April 18, 2023, Fox settled Dominion’s lawsuit for $787.5 million, which, as reported by CNN, “is the largest publicly known defamation settlement in US history involving a media company.” The Smartmatic lawsuit is ongoing.
Wolf Popper’s derivative complaint, which follows an investigation into Fox’s internal books and records, alleges that the defendants—including Rupert Murdoch, founder and board chairman of Fox Corp. and Executive Chair of Fox News, and Lachlan K. Murdoch, CEO of Fox Corp.—feared losing Fox’s viewership to competing media outlets and refused or otherwise failed to prevent high-ranking Fox employees from disseminating false statements regarding the election, exposing Fox to extremely costly litigation, reputational injury, and other harm. The lawsuit, among other things, demands that the defendants indemnify Fox for the damages it has incurred and will continue to incur resulting from the defamation lawsuits.