Smartmatic's turn: $2.7 billion defamation lawsuit against Giuliani, Powell, Fox News

Twice the money, twice the fun! Smartmatic has filed its anticipated lawsuit against media outlets and Donald Trump’s lawyers for defamation based on their unsupported conspiracy theories about the 2020 election. On air and in legal briefs, the respondents looped Smartmatic into their tales of Dominion Voting Systems’ supposed corruption, even though the two companies compete against each other and Smartmatic only does business in the US in Los Angeles.

Smartmatic wants $2.7 billion from Rudy Giuliani, Sidney Powell, Fox News, Newsmax, OANN, and various hosts:

A voting technology company is suing Fox News, three of its top hosts and two former lawyers for former President Donald Trump — Rudy Giuliani and Sidney Powell — for $2.7 billion, charging that the defendants conspired to spread false claims that the company helped “steal” the U.S. presidential election.

The 284-page complaint filed Thursday in New York state court by Florida-based Smartmatic USA is one of the largest libel suits ever undertaken. On Jan. 25, a rival election-technology company — Dominion Voting Systems, which was also ensnared in Trump’s baseless effort to overturn the election — sued Guiliani and Powell for $1.3 billion.

Unlike Dominion, whose technology was used in 24 states, Smartmatic’s participation in the 2020 election was restricted to Los Angeles County, which votes heavily Democratic.

The lawsuit seems particularly aimed at Fox News and its hosts. They make the network both a villain and a craven follower almost simultaneously, arguing that Fox News knowingly amplified baseless allegations as a competitive strategy against the other two upstarts:

In its 276-page complaint, Smartmatic argues that Mr. Giuliani and Ms. Powell “created a story about Smartmatic” and that “Fox joined the conspiracy to defame and disparage Smartmatic and its election technology and software.”

“The story turned neighbor against neighbor,” the complaint continues. “The story led a mob to attack the U.S. Capitol.” …

Mr. Giuliani and Ms. Powell repeatedly made the case for election fraud while appearing as guests on the Fox programs hosted by Ms. Bartiromo, Mr. Dobbs and Ms. Pirro in the weeks after the election, a time when powerful Republicans in Congress were sowing doubts about the election outcome and Senator Mitch McConnell of Kentucky, then the majority leader, had yet to congratulate Joseph R. Biden Jr. on his victory.

Smartmatic said in the complaint that the promotion of false claims on Fox “jeopardized” its “multibillion-dollar pipeline of business”; damaged its election technology and software businesses; and made it difficult for the company to get new business in the U.S., where it had made inroads after years of servicing elections in other nations.

For its part, Fox News Media spokespeople have contacted media outlets, myself included, to rebut the allegations:

“FOX News Media is committed to providing the full context of every story with in-depth reporting and clear opinion. We are proud of our 2020 election coverage and will vigorously defend this meritless lawsuit in court.”

They also are pointing to the airing of interviews Fox did with OSET Institute voting-tech expert Eddie Perez on December 19th, 20th, and 21st to argue that they did balance their reporting. Smartmatic will no doubt argue, as Dominion apparently will as well, that those segments were too little, too late. Smartmatic claims that the damage was already done, and is still ongoing. How did Smartmatic come up with $2.7 billion? They might lose more than a billion dollars’ worth of business before this even comes to court, let alone increased security costs and banking interruptions:

With several client contracts in jeopardy, the company estimates that it will lose as much as $690 million in profits over the next five years. It also expects it will have to boost spending by $4.7 million to fend off what it called a “meteoric rise” in cyberattacks.

“For us, this is an existential crisis,” Mugica said in an interview. He said the false statements against Smartmatic have already led one foreign bank to close its accounts and deterred Taiwan, a prospective client, from adopting e-voting technology.

Both companies can point to real damages as a result of the conspiracy theories promoted by Trump’s team after the election. Here’s where this gets tricky, however. It is not easy to go after media outlets and attorneys for defamation — not impossible, but it’s no slam dunk. Fox and Newsmax can point to actions they took to correct the record after being threatened with legal action over their earlier claims that demonstrate some form of willingness to correct the record. Both aired segments that rebutted if not entirely debunked their earlier reporting, and of course Newsmax’ segment with Mike Lindell this week speaks for itself. Media outlets exist to report and analyze events, and courts have a high bar on proving defamation in the US to encourage reporting as a public good.

The best case both companies have might be against Rudy Giuliani. Sidney Powell actually submitted her “Kraken” arguments in court, giving her some potential shield against a defamation claim under litigator privilege, even if she also raised money off her website over those claims as well. Giuliani didn’t ever file those claims in court, but he pushed the Dominion and Smartmatic theories on his podcasts, which he monetizes through product sales and endorsements. Even after being warned by both companies that litigation would be forthcoming — warnings that created U-turns in coverage at Fox and Newsmax — Giuliani kept publicly claiming he had enough evidence to prove those conspiracy theories correct, right up until that January 6th rally where he called for “trial by combat” to settle the matters.

In the end, though, we’ll never know. It’s in everyone’s best interest to settle these suits, as long as the respondents get forced to repudiate these crackpot theories in public as a condition. The only people who will get rich will be the lawyers, and it might just be that the only pockets to raid will be Giuliani’s, which won’t leave much for Dominion or Smartmatic when the dust settles.