Newsmax faces ‘bet-your-company’ defamation trial over 2020 election lies

Washington (CNN) — Jury selection is set to begin Thursday in a closely watched defamation trial pitting voting technology company Smartmatic against the right-wing cable network Newsmax, in a high-stakes case over the airing of false 2020 election claims.

Barring a last-minute settlement, which is common in cases like these, both sides are girding for a showdown in Delaware Superior Court, where a similar lawsuit between Fox News and Dominion Voting Systems was famously settled last year for a record $787 million.

The Newsmax case revolves around the same false claims, championed by former President Donald Trump and his Republican allies, that the 2020 election was rigged by Smartmatic software and others. The Florida-based company sued Newsmax and other right-wing outlets and figures in 2021, alleging that its reputation was destroyed by the lies.

Newsmax has denied wrongdoing and said it was covering newsworthy events protected by the First Amendment. Unlike other right-wing networks that were sued, Newsmax also ran an on-air “clarification” in December 2020 declaring that it’s newsroom had not uncovered any evidence that Smartmatic or Dominion “manipulated votes in the 2020 election.”

“This is a case that is a bet-your-company case for Newsmax,” Howard Cooper, an attorney representing the pro-Trump network, said in a pretrial hearing last week.

Judge Eric Davis, who also oversaw Dominion’s blockbuster case against Fox News, is set to preside over a monthlong trial in Wilmington, Delaware. The Newsmax case will test the legal limits of publishing lies about the 2020 election, and the trial will play out during the final stretch of the 2024 campaign.

Davis already ruled that Newsmax’s on-air claims about possible vote-rigging were unquestionably false. But he said a jury must determine if Newsmax acted with “actual malice” — the legal standard to prove defamation. Smartmatic would need to show that Newsmax staffers knew these claims were false, or recklessly disregarded the truth.

“The actual malice standard is a high bar, but it’s not a free pass,” said Katie Townsend, legal director at the Reporters Committee for Freedom of the Press. “The standard is meant to protect innocent mistakes and errors, which are inevitable. But this legal standard doesn’t protect people who knowingly state false and defamatory information.”

Earlier this year, Smartmatic settled a defamation lawsuit against the far-right cable channel One America News for an undisclosed amount. The company is also suing Fox News in New York for defamation, in a case that is not expected to go to trial until next year.

‘Dozens’ of defamatory reports

After mainstream news outlets – and even Fox News – projected that Democratic nominee Joe Biden would win the 2020 election, Trump and his surrogates falsely claimed that he won.

In the days following Trump’s loss, Fox News started hemorrhaging viewers to Newsmax, a smaller cable rival run by Trump ally Chris Ruddy and hosted by a roster of pro-Trump personalities. Newsmax hosts didn’t acknowledge Biden’s victory and gave airtime to Trump’s conspiracies about massive voter fraud.

The voting technology company alleges that Newsmax published “dozens” of defamatory reports and endorsed false claims that its software flipped millions of votes from Trump to Biden. Smartmatic’s software was only used in Los Angeles County in 2020 and wasn’t involved in any battleground states where Trump falsely claimed the results were rigged.

Several of the broadcasts cited in Smartmatic’s lawsuit include Newsmax hosts playing clips of disgraced pro-Trump lawyer Sidney Powell promoting these lies on Fox News, including one particularly unhinged claim that “President Trump won… by millions of votes that were shifted by this software.”

“I believe her, and I don’t believe the critics,” Newsmax host Greg Kelly said after playing the clip of Powell on his show.

Newsmax host Chris Salcedo also touted Powell’s comments and added that Smartmatic “got a backdoor software built in” to flip votes. In another segment, he claimed Smartmatic “designed these machines to easily modify the vote.” Fellow Newsmax host John Bachman said Powell was questioning Smartmatic’s credibility “for good reason.”

In its lawsuit, Smartmatic’s accused Newsmax of recklessly bringing on guests who peddled claims that they knew were false, or at least were deeply skeptical about.

Two weeks after the 2020 election, Bachman interviewed Liz Harrington, then a senior spokeswoman for the Republican National Committee, who falsely claimed that Smartmatic’s software “was actually designed to steal elections.”

Court filings indicate that Smartmatic plans to put Ruddy, Kelly, Bachman, and Salcedo on the witness stand, forcing them to appear in-person and answer questions under oath.

Pretrial momentum for Newsmax

In the days leading up to trial, the judge handed Newsmax a major victory by eliminating the possibility of a punitive damages award, which significantly reduced any amount the network might have to pay if it is found liable for defamation.

“This means Smartmatic can only recover damages that it can actually prove and quantify,” said Eric Robinson, who teaches media law at the University of South Carolina. “Punitive damages are meant to punish bad behavior and be preventative. There are limitations, but punitive damages can vastly exceed the actual damages.”

Newsmax spokesman Bill Daddi praised the decision in a statement, adding, “after extensive discovery, Smartmatic has offered no evidence of such claimed damages.”

The ruling came one week after Davis threw a lifeline to Newsmax, saying he might narrow Smartmatic’s case and decide during the trial that some of the allegedly defamatory statements were “opinion” and therefore were protected by the First Amendment.

He also will let Newsmax present some evidence about the recent federal indictment charging Smartmatic executives with bribing a top Philippines election official to secure contracts in 2016. Smartmatic denies wrongdoing, but the criminal case has drawn a spotlight on the company’s extensive foreign ties, including its past work in Venezuela.

Behind the scenes at Newsmax

The lawsuit has already brought to light internal communications between Newsmax staffers and executives showing how the network tried to navigate the chaotic post-election period in 2020.

One week after Biden’s victory, Newsmax hosts and producers received a memo drafted by Ruddy stating, “we have a no evidence of a voter fraud conspiracy” but “we should not censor allegations made by the President or his lawyers” as they contest the election results.

“They pushed the story after that date 23 more times,” Smartmatic’s lead lawyer Erik Connolly said at a pretrial hearing last month. “…They knew they had no evidence.”

Lawyers for Newsmax pointed out that the memo further stated that the network “will fully accept and acknowledge the President-elect as decided by the Electoral College” and that it would “encourage a smooth transition of power” regardless of the outcome.

Court filings also indicate that Newsmax host Bob Sellers told one of his producers on November 9, 2020, “How long are we going to have to play along with election fraud?”

On December 11, he said, “we can start slamming Biden instead of defending crazy.”

Newsmax’s conspiracy-peddling White House correspondent Emerald Robinson was told in January 2021 that “giving air to unsubstantiated, unproven allegations is no longer acceptable to us without demonstrated evidence that stands up to scrutiny from both sides of the story,” according to internal emails read aloud at a recent hearing.

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