The Week Ahead

April 16, 2023

The legal developments keep coming, sometimes faster than it’s possible to keep track of them all. We’ll focus on two that are sure to be of interest this week, although I have no doubt we’ll see more as we get into it.

Fox goes to trial

Dominion Voting Systems’s defamation case against Fox News kicks off this week. A jury hasn’t been selected yet, but the judge expects to finish that process on Monday. Originally, the trial was set to begin with opening arguments as soon as the jury was in place, but Delaware Superior Court Judge Eric Davis is expected to announce he will delay the start until Tuesday morning. If it were any other case, you might expect settlement negotiations had become a possibility, but that seems unlikely in this case.

Although juries can do strange things, the evidence here is very strong, which is unusual for a plaintiff in a defamation case. Usually there’s a struggle to prove actual malice—that the defendant made statements that damaged the plaintiff, knowing that they were false or with reckless disregard for their truth. Here the judge has already ruled, as a matter of law, that Fox was peddling falsehoods. The jury will be able to take that as a given, and will only have to decide whether Fox knew it.

The evidence, which includes texts and tapes, is compelling. It’s very likely that the only real issue in this case will end up being how much Fox has to pay out to Dominion. Dominion is asking for $1.6 billion to compensate it for business losses, but it has also asked for punitive damages. Punitive damages are meant to punish a defendant for bad behavior, and the amount is left up to the jury’s discretion. Given that the evidence in this case includes little gems like Fox discontinuing fact-checking when it ran contrary to what they thought their viewers wanted to hear, and the impact that had (and continues to have) on our country, it’s possible the jury could whack Fox. The trial is expected to last five weeks.

There have been some interesting legal rulings in advance of trial in this case that are likely to come up as the trial proceeds. The judge ruled Dominion cannot bring up the insurrection because it would be unduly prejudicial. But—and it’s a big one—there’s a legal rule that if the other side “opens the door” to evidence that would otherwise be inadmissible, a party can offer it in response. Smart lawyers in this situation ask to approach the bench if they believe the door has been opened and ask for the court’s permission before they proceed, and it’s quite possible this could happen here. It might not seem important, since jurors will likely be aware of it, but they won’t be able to consider any evidence they don’t hear in the courtroom when they deliberate.

Dominion has received some favorable rulings, including authorization to cite the salaries of Fox hosts and executives, which could play a big role in helping the jury understand Fox’s profit motive for spreading falsehoods and also, perhaps in a more subtle way, empower the jury to award substantial damages. The judge also prohibited Fox from introducing evidence that some of its broadcasts fact-checked Trump’s baseless claims about 2020 election fraud (not relevant when other shows presented it as gospel) and from referring to internal Dominion emails referencing some issues with their machines.

Alabama used to be called “tort hell” because of the large punitive damage awards Alabama juries were infamous for. It’s possible a Delaware jury might claim that name before this trial is over.

There are other lawsuits against Fox right behind Dominion’s:

• Voting machine manufacturer Smartmatic has an April trial scheduled in state court in New York, seeking $2.7 billion in damages. The complaint refers to many of the same statements Dominion cites to support its contention that Fox made the company a “villain” in its fake reporting that the 2020 election was stolen from Trump. It will have the benefit of information Fox turned over to Dominion, including the materials that Fox failed to provide but that Dominion learned of through other sources, including tapes. That will make Smartmatic’s case that much stronger. Smartmatic, in addition to suing the Fox defendants, names Rudy Giuliani, Lou Dobbs, and Maria Bartiromo as defendants.

• Shareholders lawsuits have started. A single Fox shareholder sued last week alleging a breach of fiduciary duty over Murdoch’s failure to stop the network from broadcasting Trump’s Big Lie and exposing the business to legal liability. It’s likely this or a similar suit could develop into a class action and there could be additional suits by others who did business with Fox. A “breach of fiduciary duty” means a company’s executives and board failed to act responsibly in the company’s best interest and their failures caused shareholders to lose money.

• A Fox News producer named Abby Grossberg filed lawsuits in federal court in New York and state court in Delaware with claims that include an allegation Fox “coerced” her into testifying falsely in her deposition and tried to set up her and host Maria Bartiromo as the scapegoats for Fox’s false reporting. Her allegations resulted in the surfacing of new evidence that Fox had previously withheld, including audiotape of producers and hosts being told by campaign staff that Trump’s allegations weren’t supported by evidence. Frankly, it’s a little hard to know what to make of this situation, because Grossberg is essentially conceding she lied in her deposition, while blaming the network. But her claims include allegations of a longtime culture of sexism and discrimination against women who worked for Fox, and they could carry some weight. Fox has filed a countersuit to prevent her from discussing her conversations with their lawyers and has placed her on forced administrative leave. We’ll have to watch and see how this lawsuit develops.

If you want a little refresher on some of the evidence in the case, as well as the legal standard for proving actual malice, from the New York Times v. Sullivan case in defamation lawsuits, take a look here, at this early March edition of Civil Discourse.

Clarence Thomas

What’s now become an outright ethics scandal for the Supreme Court justice started with some dishy reporting from ProPublica (a nonprofit newsroom that does some great reporting and that you can support here if you’re so inclined). First, we learned Thomas and his wife accepted years of uber-expensive vacation trips from wealthy real estate developer Harlan Crow. Crow issued a statement saying they were personal friends and no one tried to influence Thomas’s decisions on the Court. Of course, no one believes that. The two only became friends after Thomas had been on the Supreme Court for several years, and the elaborate trips gave wealthy, conservative men unique access to the Justice, as captured in a painting Crow commissioned of Thomas, surrounded by conservative elites like the Federalist Society’s Leonard Leo. Crow is on the board of directors of the conservative American Enterprise Institute. He may not have been a named party in any cases in front of the court, but calling these trips “personal hospitality” that didn’t have to be reported stretches the permission officials have to hang out with old friends beyond recognition.

Next came reporting that Crow bought Thomas’s mother’s house in Savannah, Georgia, at an inflated price, along with some other property on her street. Thomas, who had previously included some of the property on financial reports, didn’t include the sale or the identity of the purchaser on his report in the year of the sale. But he made a lot of other disclosures that year, including fees he received for teaching, travel reimbursement for other trips, and a $540 stained-glass medallion. But he left out the sale of property to Crow.

Crow issued a statement claiming he bought the property and made improvements to it (Thomas’s mom still lives there) to preserve it for future use as a Thomas museum. There may be some, but I couldn’t really find a whole horde of museums dedicated to justices in their childhood homes, although there is a great virtual exhibit on Justice Thurgood Marshall hosted by the Smithsonian that you may want to check out. And the residence doesn’t fit in with the rest of Crow’s real estate portfolio, which seem to run more towards investing in and developing industrial, business, or multifamily properties. Crow’s bio on the Crow Holdings website reflects his work—“the firm made important strategic diversifications into a variety of additional asset classes including new asset allocation models for public equities, hedge funds, private equities, and other asset classes”—while he was the CEO (he now chairs the board).

Thomas’s failure to report is hard to view as anything other than a clear violation of disclosure rules. He had to certify his annual forms when he filed them, and the standard, which he is well aware of, is that an omission of information counts as a false statement. Senator Sheldon Whitehouse (D-R.I.) and Congressman Hank Johnson (D-GA) called for the Judicial Conference to refer Thomas to DOJ for investigation, and Johnson, from the Justice’s home state, called for his resignation.

The letter concludes that “Justice Thomas’s failure to report this transaction is part of an apparent pattern of noncompliance with disclosure requirements . . . .  [T]here is at least reasonable cause to believe that Justice Thomas intentionally disregarded the disclosure requirement to report the sale of his interest in the Savannah properties in an attempt to hide the extent of his financial relationship with Crow.”

Supreme Court justices can be prosecuted for violations of law committed in their personal capacity just like anyone else. An investigation into Thomas would add to DOJ’s portfolio of political cases at a time when it’s unlikely there is much appetite to take the matter on unless there are clear, significant violations of law. Nonetheless, Thomas’s conduct merits serious consideration. Justice Abe Fortas stepped down in 1969 while an investigation into private payments some suggested could have been made to protect a wealthy friend under criminal investigation was underway. He was never charged.

Even a successful prosecution would not suffice to remove Thomas from office. That would require impeachment by the House and conviction in the Senate. That’s rare. Justice Samuel Chase is the only Supreme Court justice the House has impeached. He was acquitted by the Senate in 1805. While impeachment is rare, it does not require a criminal proceeding in advance. Judges, including and especially Supreme Court justices, are supposed to conduct themselves in a manner designed to avoid not only actual impropriety, but even the appearance of impropriety. Thomas has not.

New information continues to emerge. If it holds up, investigation or other action may become a more realistic possibility, even in a sluggish system that has given Supreme Court justices leeway on these matters for far too long. Sunday morning, the Washington Post reported that Thomas’s financial forms indicated “his family received rental income totaling hundreds of thousands of dollars from a firm called Ginger, Ltd., Partnership. But that company—a Nebraska real estate firm launched in the 1980s by his wife and her relatives—has not existed since 2006.” It could be a paperwork error, but that, frankly, seems unlikely for a Supreme Court justice who has been doing this for decades and has plenty of assistance from staff and his financial advisers to help with the process.

As scrutiny continues, Thomas, who has been recalcitrant as alleged improprieties continue to come to light, could be at risk. In 2011 he claimed he had failed to disclose information about his wife’s income because he didn’t understand the forms. That was 20 years into his time on the Court. Patterns suggest intent. Whether this proves to be actual misconduct or only the appearance of it, Thomas has violated the public’s trust, and his continued lack of willingness to address the situation and be held accountable makes him unsuited for service on the nation’s highest court. That is especially true at a time when the Court may well be called upon to decide the fate of the next presidential election, along with other important and politically controversial issues involving guns, abortion, and voting rights.

The country’s confidence in the Court has to be restored given its essential role in navigating the issues ahead. The Chief Justice has shown no inclination to do that so far, but the judicial conference could take up the recommendation to send a referral to investigate to DOJ. It would behoove Merrick Garland, who understands as much as anyone how serious this misconduct is from his own years as a federal judge, to investigate so Americans can have some clarity on what the Justice has done and whether it rises to the level of criminal conduct. Congress must act seriously to impeach if the facts merit it. It’s a serious matter when a Supreme Court justice breaks the public trust. It requires a serious response from all three branches of government.

Just when the country could use a break, we’re in for another rocky road. But much of what we are experiencing comes down to a single flaw in our system: high-level officials are not held to the same standards of accountability that the rest of us are. That needs to change.

We’re in this together,

Joyce