July 24, 2024

(Bloomberg) — The prospect of a fired Fox News producer’s secret recordings being played during trial helped push the conservative network to its $787.5 million settlement of a defamation suit by Dominion Voting Systems Inc. over the broadcasting of false 2020 election-fraud claims, people familiar with the matter said.

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Abby Grossberg, then a producer for Tucker Carlson’s show, filed a sex and religious discrimination suit last month in which she also alleged that she’d been coerced into giving false testimony during depositions by Dominion’s lawyers. She subsequently provided recordings she’d made on a phone to the voting-machine maker, brief excerpts of which were played during a pre-trial hearing last week.

The unexpected development caused a major headache for Fox’s lawyers, said the people, who requested anonymity because they weren’t authorized to speak publicly about the matter. The defense feared Grossberg’s testimony — and her recordings — would be used by Dominion’s lawyers against Fox Corp. Chairman Rupert Murdoch and other witnesses expected to be called to the stand during trial.

Combined with trepidation about Murdoch taking the stand in deep-blue Wilmington, Delaware, and a series of pre-trial rulings that shredded many of Fox’s defenses, Grossberg was a tipping point in convincing network executives to settle on Tuesday, just before opening statements in the trial were set to begin, the people added.

Though the announcement of a deal stunned courtroom observers, it had been preceded by four days of intensive negotiation at an undisclosed location in Philadelphia, the people said, where the parties called in a veteran mediator named Jerry Roscoe to facilitate discussions. Roscoe had been on a river cruise in Europe when he got the call to help broker a deal, they said.

Fox News spokeswoman Irena Briganti denied the account, calling it “wildly inaccurate” and “completely false.” Roscoe didn’t immediately respond to a request for comment.

Some of the recordings by Grossberg, who was fired a few days after filing her March 20 suit in New York, were off-the-air conversations between Fox hosts and their guests. In an excerpt played at an April 12 hearing before Delaware Superior Court Judge Eric Davis last week, Maria Bartiromo asked Rudy Giuliani if it were true that former House Speaker Nancy Pelosi had a financial interest in Dominion.

“I read that, but I can’t prove that,” Giuliani responded.

Davis noted during the hearing that the claim about Pelosi was among the false statements at issue in the case. He also ordered a probe into whether Fox News had properly turned over all documents and recordings in the case.

Fox’s lawyers said in court that they didn’t learn about the Grossberg recordings until recently and moved to quickly turn them over to Dominion. They said the producer didn’t indicate she’d made them until recently.

Rough Deal

Jury selection in the case began Thursday and was set to continue Monday, followed by opening statements. But Davis put the trial on hold for a day at the request of Fox’s and Dominion’s lawyers while settlement talks continued via Zoom and conference calls, the people said.

The rough outlines of a deal emerged by Tuesday morning, but no final pact had been reached by the time Davis pressed ahead with jury selection, they added.

With opening arguments looming, lawyers for both sides alerted Davis they’d reached a deal after a Tuesday lunch break and sought a several-hour trial delay to finalize the accord’s terms, the people said. Meanwhile, courtroom observers who expected opening statements to begin at 1:30 p.m. were subject to an unexplained two-hour delay.

Around 4 p.m., Davis summoned jurors to the packed courtroom to tell them the case had settled.

The Dominion case was Dominion Voting Systems v. Fox News Network, N21C-03-257, Delaware Superior Court (Wilmington). Grossberg’s suit is Grossberg v. Fox Corp, No. 2023-cv-02363, US District Court for the Southern District of New York (Manhattan).

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