New York City and Oregon pension funds sue Fox over false election claims

State and city officials accuse the media giant of neglecting its fiduciary duties to shareholders by promoting false election claims that exposed the company to crushing defamation lawsuits

Alex Woodward
Tuesday 12 September 2023 23:05 BST
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New York City and Oregon officials are suing the Fox Corporation and its board on behalf of their government pension funds, accusing the media behemoth of neglecting its fiduciary duties to shareholders by airing false statements about the 2020 presidential election that have opened the company to massive defamation lawsuits.

The lawsuit filed in Delaware on 12 September follows high-profile litigation targeting Fox News in the aftermath of the 2020 election, including April’s record-setting settlement stemming from a defamation lawsuit from Dominion Voting Systems. Fox agreed to pay the voting machines company $787.5m, narrowly averting a closely watched trial moments before it started.

New York City’s five pension funds stand at roughly $253bn and represent nearly 800,000 current and retired workers. The funds held about 857,000 shares, valued at $28.1m, as of 31 July, according to The New York Times, which first reported the lawsuit.

“Fox’s board of directors has blatantly disregarded the need for journalistic standards and failed to put safeguards in place despite having a business model that invites defamation litigation,” New York City Comptroller Brad Lander said in a statement shared with The Independent.

“A lack of journalistic standards and a proper strategy to mitigate defamation has clearly harmed Fox’s reputation and threatens their bottom line and long-term profitability,” he added. “Clear governance systems are absolutely necessary for the long-term health of a company. As Fox’s board continues to ignore these red flags, we are holding them accountable as long-term shareholders.”

The state of Oregon, representing a retirement fund for the state’s public employees, has also joined the lawsuit. Oregon holds 150,146 shares of Fox Class A stock and 76,169 shares of Fox Class B stock worth approximately $5.2m as of 31 August, according to the state.

“The board of Fox Corporation took a massive risk in pursuing profits by perpetuating and peddling known falsehoods,” Oregon Attorney General Ellen Rosenblum said in a statement.

“The directors’ choices exposed themselves and the company to liability and exposed their shareholders to significant risks. That is the crux of our lawsuit, and we look forward to making our case in court,” she added.

Oregon’s litigation follows a joint investigation from the state’s Department of Justice and Treasurer’s Office which determined that Fox management harmed its investors, including Oregon’s public employees.

The complaint in Delaware alleges that the Fox board knowingly amplified false claims supported by Donald Trump and his allies baselessly alleging that the 2020 election was rigged against him. The lawsuit claims that the company “consciously disregarded” potential exposure to defamation lawsuits and failed to minimize those risks.

Fox and its board “chose to invite robust defamation claims, with potentially huge financial liability and potentially larger business repercussions, rather than disappoint viewers of Fox News,” according to the complaint, which names the Fox Corporation board and chief executives.

The Fox Corporation board includes Rupert Murdoch and his son Lachlan Murdoch.

The media titan recently settled with Abby Grossberg, a former producer for Tucker Carlson Tonight, for $12m following a blockbuster lawsuit accusing the network of fostering a “toxic workplace” where “truth remains a fugitive” in a revealing lawsuit that depicts an environment where women are routinely verbally violated “by a poisonous and entrenched patriarchy.”

In July, Ray Epps – the subject of debunked right-wing conspiracy theories that accuse him of being a government agenct who instigated the January 6 attack – sued the network and former host Tucker Carlson for defmation.

The Independent has requested comment from Fox.

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