Fox News Sued: Defamation Cost Hit City Worker Pensions, NYC Contends

NEW YORK CITY — Unfair, unbalanced and ultimately unprofitable: these are the allegations levied against Fox News by New York City official suing the corporation for breaches of fiduciary duty.

Fox Corporation stands accused by New York City Comptroller Brad Lander of risking, and losing, hundreds of millions of dollars as its ultra-conservative news network promoted defamatory content resulting in costly lawsuits that threatened their bottom line.

“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,” said Lander.

“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.”

Patch did not receive an immediate response to an email request for comment from Fox Corporation's press office. A spokesperson declined invitation to comment from the New York Times.

Pension funds for New York City police officers, firefighters and educators filed the derivative lawsuit Wednesday in Delaware, where the corporation is based, Lander's office said.

The five funds — New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Fire Pension Fund, New York City Police Pension Fund, and Board of Education Retirement System — collectively owned $858,284 shares of Fox stock worth about $27.7 million as of Aug. 31.

The shareholders contend the Board knew Fox News was systematically risking defamation lawsuits in pursuit of a political narrative to promote conservative causes.

Among those risk was the false claim that murdered Democratic National Committee staffer Seth Rich provided hacked emails to WikiLeaks and the election technology companies U.S. Dominion, Inc. and Smartmatic USA rigged the presidential election in 2020.

The Board failed to protect Fox News from a settlement with Dominion that cost the company $787.5 million, the lawsuit contends.

"The Board’s failures have also brought increased scrutiny on Fox’s adequacy to hold an FCC broadcast license," a press release states.

New York City is joined by the State of Oregon and represented by the New York City Law department, Cohen Milstein Sellers & Toll PLLC, Friedlander & Gorris, and Lieff Cabraser Heimann & Bernstein.

The lawsuit also calls out media mogul and Fox founder Rupert Murdoch, and his family, for playing insider political baseball despite the litigious risk.

"The Murdochs...consciously disregarded the risk of massive tort liability inherent in Fox’s business model and throughout Fox News’s post-election broadcasting," the lawsuit argues.

"Defendants chose to invite robust defamation claims, with potentially huge financial liability and potentially larger business repercussions, rather than disappoint viewers of Fox News."