Smartmatic USA (SUSA), a Florida-based voting technology company, had a very limited role in the 2020 general election: a single contract with Los Angeles County. But Smartmatic loomed much larger in the imaginations of Trump campaign lawyers Sidney Powell and Rudy Giuliani, who repeatedly claimed the company had supplied fraud-facilitating software to Dominion Voting Systems as part of an elaborate conspiracy to steal millions of votes for Joe Biden.
Fox News played a conspicuous role in promoting that tall tale, which is why SUSA sued the cable channel for defamation in February 2021, seeking $2.7 billion in damages. Fox argued that it was protected by freedom of the press because it was merely covering the president's allegations of election fraud. But this week, a New York judge ruled that Smartmatic can proceed with its claims against Fox News, former Fox host Lou Dobbs, and current host Maria Bartiromo.
In his 61-page decision, New York County Supreme Court Judge David B. Cohen also rejected Giuliani's motion to dismiss Smartmatic's claims against him. Cohen granted Powell's motion, accepting her argument that SUSA had not established a New York nexus sufficient to justify suing her there. He also dismissed the claims against Fox host Jeanine Pirro, finding that just one of her allegedly defamatory statements pertained specifically to Smartmatic and that she described it as a claim made by Donald Trump's lawyers.
SUSA's complaint made a strong case that Dobbs and Bartiromo had not merely conducted softball interviews with Powell and Giuliani but had repeatedly lent credence to their wild claims, often presenting them as fact. They continued to do so even though the allegations were plainly at odds with reality, even though their own colleagues at Fox (including news reporters and commentator Tucker Carlson) had noted the lack of evidence to support Trump's conspiracy theory, and even though government officials and cybersecurity experts had dismissed the idea that compromised vote-tabulating machines could have swung the election to Biden.
As Cohen notes, Dobbs claimed on the air that "SUSA and Dominion sent votes out of the country to be counted so that the results would not be auditable"; that "Dominion worked with SUSA, a voting technology company with ties to former Venezuelan dictator Hugo Chavez"; that "what President Trump's legal team was discovering about Dominion and SUSA gave rise to 'probable cause for a complete and thorough investigation'"; that "SUSA 'electronically chang[ed] votes in the 2013 presidential election in Venezuela'"; and that "SUSA had 'documented issues with [its] voting machine software.'"
Dobbs reinforced these allegations on Twitter, where he "accused Dominion and SUSA of 'Democrat electoral fraud,'" reported that "Powell said she had 'firsthand evidence' that SUSA's software was designed to change votes without detection," and "said that Powell had revealed 'groundbreaking new evidence indicating that [the election] came under massive cyber-attack orchestrated with the help of Dominion, [SUSA], and foreign adversaries.'"
Bartiromo, meanwhile, "said that, according to a 'source,' SUSA's software had a 'back door' used to determine how many votes needed to be switched to rig an election," asserted that "SUSA's software changed votes from President Trump to President Biden," "showed a graphic of swing states in which SUSA software was allegedly used, despite having no evidence to support her statement," and "showed a graphic on the screen indicating that Dominion machines were used in the 'swing' or 'battleground' states of Arizona, Georgia, Michigan, Nevada, Pennsylvania, and Wisconsin." She "simultaneously said that SUSA's software was used in those jurisdictions as well, despite the fact that it was only used in Los Angeles County, California."
If these statements are false, Cohen notes, they "are defamatory per se insofar as they concern plaintiffs' 'trade, business or profession' and suggest that they committed a serious crime." Under New York law, which provides extra protection in defamation cases for statements on issues of public concern made in a public forum, SUSA also has to prove "actual malice," meaning that Dobbs and Bartiromo either knew these claims were false or showed "reckless disregard" for their accuracy. In both cases, Cohen found, SUSA "adequately pleaded a substantial basis" for actual malice.
"Dobbs' extremely serious claims that SUSA sent votes out of the country to be counted, that SUSA changed votes in the Venezuelan election of 2013, that there was probable cause to investigate the company, that SUSA's software was designed to change votes without detection, and that SUSA was involved in a cyberattack on the election could be found to be 'so inherently improbable that only a reckless person would have put [them] in circulation,'" Cohen writes. And although Dobbs referred to Powell's "firsthand evidence" and "groundbreaking evidence," he was "conspicuously silent regarding what this evidence was or who provided it." He therefore "could be found to have had obvious reasons to doubt the truthfulness of what Powell told him."
As for Bartiromo, Cohen notes that her "representation about a 'back door' may be a fabrication insofar as she did not name the 'source' she referred to." He also says "her claim that SUSA's software converted votes for President Trump to votes for President Biden, if false, could be found 'so inherently improbable that only a reckless person would have put [it] in circulation.'" Cohen adds that "Bartiromo's representation that SUSA software was used in Dominion machines in swing states which, according to plaintiffs, it was not, implied that the software helped President Biden steal the election from President Trump."
After Smartmatic threatened to sue Fox on December 14, 2020, Fox News and Fox Business aired a corrective, prerecorded interview with election security expert Eddie Perez during Lou Dobbs Tonight, Justice with Judge Jeanine, and Mornings with Maria. "I have not seen any evidence that Smartmatic software was used to delete, change, alter anything related to vote tabulation," Perez said.
Perez noted that Smartmatic software was used only in Los Angeles County during the 2020 election and that the company is independent from Dominion, whose machines were used to process votes in 28 states. He rebutted the idea that U.S. votes had been tabulated in foreign countries and the charge that Smartmatic had been banned in the United States because officials concluded it was untrustworthy.
In SUSA's view, this was too little, too late. Cohen seems inclined to agree. Although Fox News, Dobbs, and Bartiromo cited the Perez interview as evidence that they were covering Trump's "Big Lie" in a fair and evenhanded manner, Cohen nevertheless ruled that SUSA had provided "a substantial basis" to claim that all three had recklessly reinforced claims they should have known were false.
Cohen was similarly unimpressed by the fact that Dobbs had told his viewers about an email in which SUSA noted its limited role in the election. "Dobbs cannot be exculpated simply because he mentioned that SUSA denied his comments," Cohen says. "Moreover, since Dobbs continued to disseminate allegedly false information about SUSA after he told his viewing audience about the emails, there is a substantial basis for SUSA's allegation that he acted with reckless disregard for the truth."
More generally, Cohen says, "Fox News cannot escape liability merely because the Fox anchor defendants occasionally mentioned that SUSA denied their representations." He cites a 1964 case in which the New York County Superior Court dismissed as "patently absurd" the "suggestion that a libel be excused because a denial made by the subject thereof is also published."
Cohen says the plaintiffs "correctly rely" on a 1989 decision in which the U.S. Supreme Court held that, "although a failure to investigate will not alone support a finding of actual malice, the purposeful avoidance of the truth is in a different category." The Court said a plaintiff could establish actual malice by showing that the defendant's "inaction was a product of a deliberate decision not to acquire knowledge of facts that might confirm the probable falsity."
Fox News argued that its absence of malice was evident from its repeated requests that Powell and Giuliani provide evidence to support their allegations. "This fact," Cohen notes, "can also support plaintiffs' claim that Fox News had reason to suspect that what it was broadcasting was false, and nevertheless continued to allow Powell and Giuliani to appear on its network, specifically on shows hosted by Dobbs, Bartiromo, and Pirro, to promote completely unfounded claims that plaintiffs' software enabled President Biden to steal the election." Even if Fox News did not deliberately promote lies, Cohen says, "there is a substantial basis for plaintiffs' claim that, at a minimum, [it] turned a blind eye to a litany of outrageous claims about plaintiffs, unprecedented in the history of American elections, so inherently improbable that it evinced a reckless disregard for the truth."
Powell, who lives and practices law in Texas, was the main exponent (next to Trump himself) of the claim that Biden had stolen the election through a baroque conspiracy that involved not only Smartmatic and Dominion but also George Soros, the Clinton Foundation, and the governments of Venezuela, Cuba, and China. In the Smartmatic case, she claimed "she believed the allegations then and she believes them now," although in other contexts she has said she was not actually making factual assertions or that she was just conveying her clients' claims.
Powell nevertheless is off the hook in this particular case—although not in Dominion's $1.3 billion lawsuit against her, which also names Giuliani as a defendant—because her main connection to New York was her interviews on Fox News, which is based there. Cohen deemed those appearances insufficient to established personal jurisdiction over Powell. But Giuliani, who lives in New York and practiced law there until his license was suspended last June based on his promotion of Trump's stolen-election fantasy, was not so lucky.
"Giuliani's barrage of statements about SUSA adequately provide a substantial basis for its claim that he acted with actual malice insofar as he evinced a reckless disregard for the truth of his statements and/or a high degree of belief that the said information was false," Cohen writes. He notes that Giuliani, among other things, claimed "SUSA was founded 'for the specific purpose of fixing elections. That's their expertise. How to fix elections.'" Giuliani also claimed that "SUSA's software was used in other countries to steal elections and that it had 'tried and true methods for fixing elections.'"
Cohen rejected Giuliani's argument that he cannot be held liable for such statements because he made them in the context of representing Trump. "Giuliani's contention that his statements are protected by an absolute litigation privilege is without merit," Cohen says. "Although Giuliani made the allegedly defamatory statements at the time he was representing President Trump in litigation related to the election, the statements were made on Fox News and thus were not 'defamatory words spoken in a judicial proceeding.'"
Giuliani, of course, can still defend himself against Smartmatic's and Dominion's defamation claims by showing that what he said was true. That should not be a problem, since he has repeatedly declared that the scheme he described was "easily provable" and that he had "conclusive proof" of "machines that are crooked" and "ballots that are fraudulent." Although Giuliani never managed to produce that evidence in any of the Trump campaign's post-election lawsuits, he has a strong incentive to dig it up now.