The 2024 presidential election is approaching, but the legal battle over how right-wing channel Newsmax will cover the 2020 race isn’t going away.
On Sept. 30, Newsmax will go to court in Delaware to defend itself against a defamation lawsuit filed by Smartmatic, a London-based voting machine technology company. Smartmatic says its reputation has been damaged by false statements online about allegations of voter fraud in the 2020 presidential election.
Smartmatic’s lawsuit alleges that Newsmax provided a platform for its hosts, Donald Trump, and the president’s former lawyers and allies to falsely claim that the company’s software was designed to promote President Biden’s election.
The Smartmatic device was used only in Los Angeles County in 2020 and not in any of the states that helped decide the election.
Despite the lack of credible evidence of fraud and the outright rejection of Trump’s legal challenges in court, the allegations received extensive airtime on Newsmax. Smartmatic says it lost business because of the misrepresentation.
“Newsmax’s own people repeatedly and deliberately lied to the public,” said Smartmatic’s attorney, Eric Connolly. “This trial allows the American legal process to finally hold Newsmax accountable for deliberately spreading lies about Smartmatic.”
Newsmax responded that Trump’s allegations were new and that its reporting was protected by the First Amendment. The company also issued an on-air explanation in December 2020 in which it claimed it had found no evidence that Smartmatic was involved in voter fraud.
What’s at stake?
Smartmatic is seeking significant financial damages in the case, which could be a devastating blow to privately owned Newsmax, based in Boca Raton, Florida.
Smartmatic’s lawsuit initially sought $1.7 billion in damages. That figure is now around $400 million as the company caps losses for the period between 2021 and 2023.
The big award could be fatal for Newsmax. Howard Cooper, one of Newsmax’s lawyers, described the case at a preliminary hearing on Monday as a “corporate” dispute.
Fox News settled a similar defamation case with Dominion Voting Systems, agreeing to pay $787 million before a trial begins in April 2023. But parent company Fox Corp. had billions in cash at the time and only kept a quarter of that forfeiture.
Earlier this year, Newsmax filed for an initial public offering to raise $75 million and a private placement to raise additional capital. The company expects to generate $180.5 million in revenue in 2024, according to the investor presentation.
The network, which launched in 2014, has no top-tier advertisers, relies heavily on direct marketers such as MyPillow.com for advertising revenue and battles pay-TV operators over compensation for its programming.
According to Nielsen data, Newsmax averages 280,000 viewers during prime time, compared with more than 2 million for ratings leader Fox News.
Will Dominion’s deal with Fox News have any effect?
Smartmatic’s lawsuit before Judge Eric M. Davis will be heard, the same attorney who heard Dominion’s case against Fox News. Davis ruled that Fox News made false statements in its coverage of former President Trump’s election fraud allegations to help President Biden. A jury was selected to decide damages before a settlement was reached.
Davis ruled that the agreement was inadmissible as evidence in the Smartmatic-Newsmax case.
Davis found that Newsmax made false statements about Smartmatic’s role in the election. But he did not rule on whether this was done with intent to harm the company. A jury will be asked to answer that question and decide on a financial penalty if Newsmax is found guilty.
How can the Smartmatic story be played out?
Smartmatic’s lawyers want to prevent a grand jury from hearing a federal investigation into its executives for bribing officials in the Philippines. The company has not been charged, but the investigation is ongoing.
In August this year, the US Department of Justice charged Smartmatic CEO Roger Pinate and two other employees with illegally paying a former Philippine election commissioner to use their voting machines and services in the 2016 election.
Davis ruled at a preliminary hearing that he would not allow the latest charges to be brought to court, but the option to pursue them remains. (Smartmatic reduced its claim for damages so that the investigation would not be entered into evidence.)
Newsmax is expected to cite Smartmatic’s other ongoing legal issues as the reason for the loss of business, not the network’s five weeks of coverage of Trump’s 2020 election allegations.
“The Justice Department alleged that Smartmatic executives engaged in money laundering and allegedly bribed an election official,” a Newsmax representative said in a statement when the indictment was filed. “Smartmatic can hardly say that Newsmax’s content damaged its reputation. This case is not about left and right, but about allowing the free press to do its job.”
Smartmatic said the federal investigation is not related to voter fraud, which is what Newsmax discussed on air.
What the Smartmatic v. Newsmax lawsuit means for Fox News
Fox News executives and lawyers will be watching the proceedings with keen interest because Smartmatic also has a $2.7 billion defamation suit against the Murdoch-controlled network that it could file in New York next year. In preliminary hearings, Fox News lawyers attacked the amount of damages Smartmatic is seeking.
In settling its case with Dominion, Fox News refused to allow Rupert Murdoch and its on-air stars like Sean Hannity to be called as witnesses. But as the Smartmatic case moves forward, jurors will be able to see Newsmax personalities like Greg Kelly on the witness stand.
