Fox News paid a record-breaking sum to settle Dominion's defamation lawsuit. Smartmatic could get even more money.

• The settlement Fox News may pay to Smartmatic could be around $1 billion, experts say.
• Dominion settled for a record-breaking $787.5 million, but Smartmatic is asking for more.

The $787.5 million Fox News coughed up to settle a lawsuit from Dominion Voting Systems earlier this year broke the record for the largest-ever known defamation settlement in US history.

Disney's $177 million settlement for the infamous "pink slime" lawsuit in 2017 dropped to second place.

But the lead attorney in the pink slime case, J. Erik Connolly, now has another shot to be on top.

Connolly is representing Smartmatic in another lawsuit against Fox News, which is still ongoing.

After Donald Trump lost the 2020 election, his legal team pushed false conspiracy theories alleging the election was stolen. Two of the then-president's lawyers, Sidney Powell and Rudy Giuliani, falsely claimed that election technology companies Dominion and Smartmatic were secretly in cahoots with each other and deployed their technology to flip votes from Trump to now-President Joe Biden.

Dominion and Smartmatic each brought defamation lawsuits against Fox News. Fox and other media organizations advanced the false theories by allowing Powell and Giuliani to speak freely on their networks, the companies have alleged.

Just as a trial was set to begin in Delaware state court, in April, Fox agreed to settle Dominion's claims for the record-breaking sum.

But Smartmatic's lawsuit continues going forward, playing out in a New York state court. (Giuliani is also a defendant in the case; Smartmatic's case against Powell is moving forward in Washington, DC, for jurisdictional reasons.)

Experts told Insider that the $787.5 million settlement is a strong benchmark for Smartmatic — and that Smartmatic will likely get more.

"When Fox settled the Dominion case, it knew, or reasonably should have known, that it would be establishing a precedent or a benchmark that Smartmatic would try to exceed in its case," Clay Calvert, a First Amendment expert and nonresident senior fellow at the American Enterprise Institute, told Insider.

A better benchmark might be a cool $1 billion, according to James Goodale, a former lawyer for the New York Times and experienced First Amendment litigator.

"I think the number will float around that, $1 billion, one way or another," he said.

Smartmatic wants more than Dominion. Fox says it isn't worth that much.

Smartmatic's lawsuit alleges $2.7 billion in damages. The company's technology played a role in just one county in the 2020 election. In a series of appendices filed to court, Smartmatic has shown that it arrived at the $2.7 billion figure by adding up its forecasted lost profits in different regions worldwide because of what it says are canceled contracts. While Dominion has a large footprint in the US, Smartmatic does more work across Africa and Europe, according to the filings.

"Smartmatic's original projections are now unachievable as a result of Defendants' disinformation campaign," lawyers for the company wrote in its lawsuit against Fox.

Fox is battling Smartmatic's lawsuit in court, calling it an assault on the First Amendment's protections for free speech.

"We will be ready to defend this case surrounding extremely newsworthy events when it goes to trial, likely in 2025," a Fox spokesperson told Insider. "As a report prepared by our financial expert shows, Smartmatic's damages claims are implausible, disconnected from reality, and on its face intended to chill First Amendment freedoms."

In court filings and public statements, Fox has characterized Smartmatic's damages demand as ludicrous. It hired a corporate law expert who looked at Smartmatic's underlying finances and argues it isn't worth nearly as much as it says.

According to Fox's filings, Smartmatic's revenue has been largely shrinking since 2012. The "extravagant" damages claim is "divorced from reality" because it was losing money, Fox argues.

"Smartmatic insists that these phantom losses are all attributable not to the nationwide (indeed, global) coverage of the President's allegations against it, but to a handful of segments on Fox News," Fox lawyers wrote in one filing. "That claim does not pass the straight-face test."

Smartmatic, for its part, maintains that it lost contracts around the world because of false conspiracy theories pushed through channels like Fox News. But the differences between Smartmatic and Dominion do make it harder to predict the outcome of their cases, Calvert said.

"It's not necessarily a rinse and repeat situation, because they're different businesses," Calvert said. "But I think it does establish a template for a potential settlement in terms of the damages."

The Dominion settlement helps Smartmatic

In Dominion's lawsuit, the election technology company calculated it lost about $88 million in lost profits from canceled contracts. From there, it extrapolated that it suffered $921 million in what are called "lost enterprise" damages to its business overall. Dominion also asked for hundreds of more millions to cover lost projected future profits, as well as money to fund repair to its reputation and security for its employees who suffered harassment. (Fox, before the settlement, challenged those figures).

There are two ways to view the $787.5 million settlement figure as a benchmark for Smartmatic, experts say.

One is as a 15% discount from the overall $921 million enterprise damages claim. The other is about 900% of the amount the company said it lost in profits.

By either metric, Smartmatic would get more money.

Its "lost enterprise" calculation for its elections technology business comes out to $2.4 billion, according to the calculations in its court filings. Profits, per Smartmatic, were $690 million over five years. Either way you slice it, using those baseline numbers brings you above the $787.5 million figure Fox paid to settle Dominion's lawsuit.

"They're different numbers, they're different companies, they have different markets," Calvert said. "But as long as the methodology in estimating their damages is the same, and you end up getting this portion of that amount, then I'm sure Smartmatic is saying to itself, 'That's the same thing we're going to get, as long as we follow that formula.'"

Smartmatic would also likely insist on getting more money than Dominion received because they claimed more damages in the first place, pointed out Gautam Hans, a professor at Cornell Law School's First Amendment Clinic. The only question, Hans said, is how much higher the number will be.

"They have a very strong incentive to keep their prices down, and they may also want to be at a level that's close — or at the very least, not too much higher than — what they paid Dominion," Hans said of Fox. "So I think that the real question is the strength of the case and how long Fox is willing to draw this out."

The fact that Dominion and Fox settled their case makes it hard to predict where things will go. It's not uncommon for parties to settle a lawsuit after a trial, agreeing on damages to ward off years of appeals. In the case between Fox and Dominion, they settled after a jury was selected but before opening arguments.

"It's hard to extrapolate from the Dominion case in part because it never got litigated," Hans said.

Goodale, an attorney at Debevoise & Plimpton, believes Fox Corp. Chairman Rupert Murdoch will view $1 billion as the benchmark — and will try to ensure the settlement number is less than that.

"De minimus, if the two cases look alike, they're going to go for the same amount. If there's something worse in the second case, it's going to go for more," Goodale said. "But I think people will be circling around that billion-dollar figure. And Murdoch won't want to pay a billion, because the headline for a billion is bad."

Fox may want to settle the lawsuit before it gets to the summary judgment phase — when each side asks a judge to rule in its favor before going to trial.

Dominion's summary judgment filings in its lawsuit against Fox News disclosed some of the most damaging revelations about its hosts and executives.

"I would probably price in a significant increase over what Fox paid Dominion," Hans said. "Would you rather pay $1 billion now and get rid of your legal fees on this case? Or are you willing to pay $1,000,000,001 in a few months and then have to pay more legal fees and also look foolish because you drew this out?"