Fox must hand over documents in shareholders’ case, judge says : NPR

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Rupert Murdoch’s Fox Corp. must turn over hundreds of documents that could shed light on how he and a key corporate director — the former head of Ford Motor Co. — handled major scandals at his properties over the past two decades.

A Delaware judge issued the guidance Friday in a long-running case brought by Fox Corp. stockholders. The lawsuit was initially filed three years ago in an attempt to hold Murdoch, his eldest son Lachlan (now executive chairman and CEO) and several other board members and executives legally responsible for fostering a business model that has repeatedly exposed the media company to scandal after scandal – and costly litigation.

The case was sparked by a nearly $800 million settlement Fox paid to Dominion Voting Systems, which accused the network of spreading conspiracy theories about fraud in the 2020 election. A similar defamation case brought by another voting tech company, Smartmatic USA, is ongoing. That company is seeking $2.7 billion from Fox.

The shareholders’ lawsuit also points to an undisclosed settlement with the family of Seth Rich. Fox published and then retracted a story accusing Rich of leaking documents to harm Democratic presidential candidate Hillary Clinton and implying that the party was involved in the former Democratic National Committee staffer’s shooting death in 2016.

And it notes a phone hacking scandal that rocked Britain over a decade ago and has cost News Corp., another Murdoch media company, some $1.5 billion so far. Fox Corp. was split off from News Corp. in the aftermath to protect the Murdoch American television licenses from potential challenges. The Murdochs more recently have explored merging the two sides of their empire once more.

Now, the shareholders’ entire case relies on what their lawyers can learn about the decades-long relationship between Rupert Murdoch and former Ford Motor Co. CEO Jacques Nasser, who has served on various Murdoch corporate boards earning six-figure annual compensation for more than two decades.

Nasser was designated as an independent director on Murdoch’s News Corp., 21st Century Fox and Fox Corp., for which he was appointed lead independent director until he stepped down in 2023 — the year Dominion case was settled. The role suggests he would act, when necessary, as a counterweight to the Murdochs, who controlled the company in executive as well as ownership roles.

But the shareholders suing Fox are challenging whether Nasser was acting truly independently.

If the evidence reveals that Nasser is so close to the Murdochs that he would make decisions that could benefit them over the company itself, then lawyers have enough to prove that more than half of Fox’s board members were not independent, and the case will likely head to trial.

In a small courtroom in southern Delaware Friday morning, Fox’s attorneys tried but failed to convince a judge to let them shield a trove of documents. That includes some 700 documents including the phrase “phone hacking” and dozens of board meeting records from Fox Corp. and other organizations, as well as emails from Nasser’s Ford accounts.

Those records could now shed light not only on the relationship between the two Australian-American businessmen and how other Fox board members were selected, but also on how Rupert Murdoch had, for years, deleted text messages — some of which could have been relevant to other legal cases.

That includes Smartmatic’s case involving Fox’s coverage of the 2020 election. Smartmatic has also accused the company and the eldest Murdoch of intentionally destroying evidence, CNN reported last year.

Fox did not respond to NPR’s request for comment.

Attorneys are also particularly interested in how Nasser supported the Murdochs’ agenda during the decade he spent on the board of British Sky Broadcasting, a British media company better known as BSkyB. In that role, Nasser backed Lachlan’s younger brother, James, as CEO, stood by the Murdochs during the phone hacking scandal and supported a controversial stock buyback program that “increased the clout of the Murdoch family,” according to court documents.

Nasser also spent a decade combined as a board director at 21st Century Fox and later Fox Corp. He and Rupert Murdoch are also longtime members of the American Australian Association, which was founded by Murdoch’s father.

Fox’s attorneys noted that Rupert Murdoch had been auto-deleting all of his text messages until about April 2022, which was after Dominion had filed its lawsuit against Fox for broadcasting unfounded conspiracy theories about the 2020 election.

“That documents were deleted wholesale is incorrect,” Anitha Reddy, one of Fox’s attorneys said in court. She noted that Murdoch typically communicates through email rather than text, but admitted that “there was a period … when text messages were not retained.”

Despite Fox’s efforts to withhold these records, Vice Chancellor Bonnie David, the Delaware judge, ruled fully in the plaintiffs’ favor. Fox will now be forced to hand over a list of all email addresses ever used by Nasser or Rupert Murdoch, as well as years worth of Fox board meeting minutes.

The shareholders’ attorneys will also get to review sealed court documents from the Smartmatic case that shed light on Murdoch’s “spoliation” of records – the legal term for destroying evidence, or in this case, deleting text messages. Fox attorneys also accused executives at both Dominion and Smartmatic of destroying evidence in their respective cases, and sought sanctions.

During the Dominion lawsuit, the voting tech company’s lawyers had accused several Fox personalities, including Pete Hegseth, who is now the defense secretary, and executives of failing to preserve communications such as texts and emails that should have been preserved as part of that case.

NPR’s David Folkenflik contributed to this story.