Del. Court Thins Some Claims In Smartmatic-Newsmax Suit

A Delaware judge weeded out some but not all counts and questions Thursday in a series of rulings ahead of a planned monthlong trial due to start Sept. 30 on Smartmatic USA’s claims that Newsmax Media USA Corp. defamed the vote-counting tech company during the 2020 election and its fallout.

Judge Eric M. Davis’ 57 pages of pretrial findings, summary judgment decisions and related rulings will leave to jurors claims that Newsmax defamed and acted with actual malice in carrying unfounded reports between Nov. 10 and Dec. 18 in 2020 that Smartmatic took part in an alleged criminal conspiracy to “fix, rig and steal the 2020 U.S. election.”

Delaware-chartered Newsmax argued that both Florida law and the First Amendment shields news organizations when they are engaged in neutral reporting on issues of public concern, and Newsmax told the court that Smartmatic must show evidence of actual damages.

Smartmatic, also chartered in Delaware, asserted that Florida has no absolute privilege and that Newsmax — allegedly pleased with a viewership surge during the election brawl — was neither neutral nor disinterested, with the court left to decide damages alone, including punitive damages.

“With that, Smartmatic believes the court should rule one of three following ways,” Judge Davis wrote: “Florida does not recognize a neutral reporting privilege, actual malice negates any privilege or the at-Issue statements were not neutral and disinterested, so privilege does not apply. All three options would require the court to reject Newsmax’s privilege defense.”

Judge Davis presided over a Dominion Voting Systems suit that sought $1.6 billion in damages from Fox Corp. for alleged voting-machine rigging. That legal saga ended in April 2023 with a $787.5 million Fox settlement offer, accepted by Dominion after jury selection and hours ahead of opening statements.

Smartmatic sued Newsmax in November 2021 in a 232-page complaint seeking a jury trial that, among other allegations, asserted that the company's value had plunged by some $2 billion, or two-thirds, as a result of relentless but unsubstantiated claims that it had a hand in vote-rigging and vote-wiping.

In the 2020 election, however, Smartmatic played a part only in Los Angeles County, California, the largest voting district in the United States.

Among the key questions left to the jury by same judge in the Smartmatic suit was the issue of malice on the part of Newsmax, with the court finding on Thursday that “Newsmax reported on allegations regarding the election and Smartmatic, but there remains a dispute as to whether Newsmax recklessly disregarded the truth” as well as whether Newsmax purposely avoided the truth.

Other prominent decisions left to jurors include whether actual malice on the part of Newsmax, if found, warrants punitive damages. But Judge Davis rejected Smartmatic arguments that it had shown enough evidence to send to the jury allegations of “express malice” — claims that “Newsmax’s primary motive for the statements was to intentionally injure Smartmatic.”

Rejected, meanwhile, were Smartmatic arguments that “every allegedly defamatory statement is materially false,” the judge wrote, including allegations regarding the company’s activities in Venezuela during an election won by Hugo Chavez.

“Therefore the court will allow Newsmax to contest falsity as to Smartmatic’s connections with Venezuela. However, the court will instruct the jury that any allegations regarding whether the election and its results were somehow altered or manipulated by Smartmatic are factually false/untrue.”

Under Florida law, the judge noted, “damages is a question for the jury.” But Smartmatic must show actual damages “proximately” caused by defamatory statements, since Florida does not allow awards of presumed damages against media defendants for inherent, or “per se” defamation.

Partially knocked down was a Smartmatic claim to private individual status that would bar Newsmax from asserting “absolute privilege” protections for its reporting. Instead, the judge found that “Smartmatic is a limited purpose public figure, Newsmax is a media defendant and there is no express malice. Accordingly, privilege is available,” with the jury left to decide if Newsmax is protected.

Jurors also will be asked to decide if protections for neutral reporting should apply, the decision said.

Newsmax Media Inc. is represented by C. Barr Flinn, Kevin A. Guerke, Timothy E. Lengkeek, Lauren Dunkle Fortunato and Michael A. Laukaitis II of Young Conaway Stargatt & Taylor LLP, Howard M. Cooper, Joseph M. Cacace, Josh L. Launer and Maria A. Lombardi of Todd & Weld LLP, Misha Tseytlin, Bennet J. Moskowitz and Douglas D. Herrmann of Troutman Pepper Hamilton Sanders LLP and Michael E. Olney of Newsmax Media Inc.

Smartmatic USA Corp., Smartmatic International Holding B.V., and SGO Corp. Ltd. are represented by Michael J. Barrie, Kate Harmon, J. Erik Connolly, Nicole Wrigley, David D. Pope and Lauren Tortorella of Benesch Friedlander Coplan & Aronoff LLP.

The case is Smartmatic USA Corp. et al. v. Newsmax Media Inc., case number N21C-11-028, in the Superior Court of the State of Delaware.

—Editing by John Campbell and Emily Kokoll.