Oregon AG sues Fox Corp over 2020 election reporting, claims 'breach of fiduciary duty'

Oregon’s Attorney General Ellen Rosenblum filed a stockholder derivative lawsuit against the board of directors of Fox Corporation this week, the corporate parent of Fox News, alleging it engaged in a breach of fiduciary duty. They claim that their pension funds were harmed by Fox News' reporting on the aftermath of the 2020 presidential election.

"Fox’s Board knew that Fox News’s promotion of political narratives without regard for whether the underlying factual assertions were true created significant exposure to defamation charges," alleges the complaint filed in Delaware Chancery Court.

According to the release, “…by pushing narratives that appealed to their audience regardless of the facts, Fox’s Board should have been especially sensitive to risks of defamation. Yet, Fox’s business model is to promote false claims, including that murdered Democratic National Committee staffer Seth Rich provided hacked emails to WikiLeaks, and continuing through false claims that election technology companies U.S. Dominion, Inc. and Smartmatic USA Corp. rigged the 2020 presidential election.”

The suit was filed on behalf of The Oregon Public Employee Retirement Fund (OPERF), which is a Fox investor, and Oregon Treasurer Tobias Read, whose office partnered in the investigation. Oregon held 150,146 shares of Fox Class A stock and 76,169 shares of Fox Class B stock, worth approximately $5.2 million as of August 31.

Rosenblum said in a release, “The board of Fox Corporation took a massive risk in pursuing profits by perpetuating and peddling known falsehoods. The directors’ choices exposed themselves and the company to liability and exposed their shareholders to significant risks. That is the crux of our lawsuit, and we look forward to making our case in court.”

According to the AG, the joint investigation earlier this year found that Fox’s management on behalf of the company harmed investors, which include Oregon’s public employees. The New York City Pension Funds is a co-plaintiff in the case.

In April, Fox News settled with Dominion Voting Systems for almost $800 million moments before the trial was set to begin regarding the voting machine company’s lawsuit against the media outlet, claiming that Fox promoted lies about the 2020 presidential election.

The lawsuit also alleges that Fox made no good-faith efforts to monitor for or mitigate defamation risk, “…unlike effectively every other major media organization in the country.”

Treasurer Tobias Read, who is a member of the Oregon Investment Council, which sets state investment policy, said in the release, “Our responsibility to safeguard the retirement investments of Oregon’s public servants is of the utmost importance.”

“We aim to hold Fox’s board of directors, including Rupert and Lachlan Murdoch, accountable for their decisions. We believe that this action is necessary in fulfilling our obligation to our beneficiaries.”