Smartmatic’s defamation lawsuit against Newsmax is headed to trial. What’s at stake?

Smartmatic's defamation lawsuit against Newsmax is headed to trial. What's at stake?

As a seasoned film enthusiast with a knack for deciphering intricate narratives and a keen eye for the behind-the-scenes drama, I find myself captivated by this unfolding legal battle between Smartmatic and Newsmax. The stakes are high, reminiscent of a nail-biting courtroom thriller where the fate of a company hangs in the balance.

As the 2024 presidential election draws nearer, the courtroom dispute about how the 2020 election was reported on conservative news network Newsmax refuses to fade without a fight.

On September 30th, Newsmax will face a defamation trial in Delaware, as they are being sued by Smartmatic, a UK-based company specializing in voting machine technology. Smartmatic claims their reputation was tarnished due to untrue assertions about voter fraud made on the network during discussions about the 2020 presidential election.

Smartmatic’s lawsuit alleges that Newsmax knowingly allowed hosts Donald Trump, Trump’s legal team, and associates to spread unfounded claims on their platform, suggesting that Smartmatic’s voting software was rigged to sway the election in favor of President Biden.

In 2020, Smartmatic’s hardware was exclusively utilized in Los Angeles County, unlike any of the crucial states that influenced the overall outcome of the election.

As a devoted moviegoer, I’ve found myself bewildered by how extensively unsubstantiated allegations of election fraud were spotlighted on Newsmax. Despite Trump’s court challenges being flatly denied and lacking any credible evidence, these claims received an inordinate amount of screen time. It’s disheartening to learn that Smartmatic, a company I admire, lost business due to these baseless assertions.

According to Erik Connolly, an attorney representing Smartmatic, it’s been alleged that Newsmax deliberately and knowingly spread false information to the public. This trial aims to bring Newsmax to justice within the American judicial system for disseminating these untruths about Smartmatic.

In response, Newsmax argued that Trump’s statements were significant enough to report and were shielded by the First Amendment. Additionally, they publicly declared in December 2020, on-air, that they could not find any proof of Smartmatic’s involvement in voter fraud.

What’s at stake?

In this situation, Smartmatic is seeking significant monetary compensation in their lawsuit, which potentially poses a severe financial threat to the private company, Newsmax, headquartered in Boca Raton, Florida.

Originally, Smartmatic filed a lawsuit aiming for approximately $1.6 billion in compensation. However, they’ve since adjusted this amount, now seeking around $400 million. This reduction is due to their decision to limit the damages claimed only from the years 2021 to 2023.

A substantial lawsuit poses a potential threat to Newsmax’s existence. In a court hearing on Monday, one of Newsmax’s lawyers, Howard Cooper, characterized the case as a “make or break” legal battle for the company.

In April 2023, Dominion Voting Systems and Fox News reached a defamation settlement worth $787 million, which was close to the start of the trial. However, Fox Corporation had substantial cash reserves available at that time and experienced only a one-time quarterly loss due to this payment.

Back in the early part of this year, I, as a cinema devotee, found myself intrigued by Newsmax’s ambitions. They announced plans for an initial public offering, aiming to collect a substantial sum of $75 million, and a private placement to secure extra funds. The investor presentation hinted at their optimistic forecast – expecting to rake in approximately $180.5 million in revenue by the year 2024.

The network, which debuted in 2014, primarily relies on direct marketing companies like MyPillow.com for its ad income and has faced struggles with cable television providers to secure payment for its content.

So far this year, Newsmax is typically attracting around 280,000 viewers during prime time, while Fox News, the current top-rated channel, boasts over 2 million viewers based on Nielsen’s statistics.

Will Dominion’s settlement with Fox News have any influence?

In this instance, Smartmatic’s lawsuit will be heard by Judge Eric M. Davis – the same judge who oversaw Dominion’s case against Fox News. Previously, he determined that certain claims made by Fox News regarding former President Trump’s allegations of election fraud benefiting President Biden were false. A jury was initially chosen to determine compensatory damages before a settlement agreement was reached.

In simpler terms, it was decided by Davis that the settlement cannot be used as proof in the Smartmatic-Newsmax lawsuit.

In simpler terms, Davis determined that Newsmax broadcasted inaccurate claims about Smartmatic’s involvement in the election. However, he did not make a decision regarding whether these false statements were intentionally made to harm the company. The jury will be tasked with answering this question and will also decide on a monetary penalty if Newsmax is found liable.

How could Smartmatic’s history come into play?

Legal counsel for Smartmatic are advocating to exclude any mention of the ongoing federal inquiry regarding alleged bribery of officials by the company’s executives in the Philippines, as no charges have been brought against them yet, but they continue to be under investigation.

In August, the U.S. Department of Justice brought charges against Smartmatic President Roger Piñate, along with two other employees, for the alleged act of making unlawful payments to a former Philippine elections commissioner. The objective was to secure use of their voting machines and services during the country’s 2016 election.

In the pretrial hearing, Davis decided not to admit the recent indictments as evidence, yet it’s possible they may be brought up at some point.

Instead of attributing their loss of business to the network’s five-week coverage of President Trump’s unsubstantiated election fraud allegations in 2020, Newsmax is likely to point towards Smartmatic’s ongoing legal issues as the primary cause.

According to a statement made by Newsmax’s representative, it was reported that Smartmatic executives were accused of money laundering and bribery. Since these allegations have been made, it would be difficult for Smartmatic to argue that Newsmax’s reporting negatively impacted its reputation. It’s essential to note that this case is not about politics but rather ensuring a free press can carry out its responsibilities.

Smartmatic stated that the ongoing federal investigation has no connection to allegations of voter fraud; instead, this topic was recently addressed on Newsmax’s broadcast.

What Smartmatic’s suit against Newsmax means to Fox News

Key individuals at Fox News, including executives and lawyers, will closely follow the upcoming proceedings, as Smartmatic has filed a defamation lawsuit against Fox News worth $2.7 billion, which could potentially go to trial in New York next year. In pre-trial sessions, attorneys representing Fox News have criticized the amount of damages that Smartmatic is claiming.

By resolving its dispute with Dominion, Fox News managed to prevent Rupert Murdoch and their prominent on-screen figures like Sean Hannity from being summoned as witnesses. However, in the ongoing Smartmatic case, it’s possible that jurors may call upon Newsmax personalities like Greg Kelly to testify.

2024-09-20 13:32

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