The case is now called In re Fox Corp. Derivative Litigation because it represents a consolidation of several lawsuits accusing K. Rupert Murdoch, chairman and largest shareholder; Lachlan Murdoch, CEO and executive chairman; and others of damaging by their actions. The lawsuit accuses the defendants of breaching their fiduciary duties and seeks damages from the defendants to repay the company.
The lawsuit is before the Court of the Chancery because Fox Corp. is registered in Delaware. The Court of Chancery handles disputes covering corporate matters, trusts, estates and other fiduciary issues.
A shareholder derivative suit is filed by a shareholder or group of shareholders on behalf of the corporation against the corporation's directors, officers or other third parties who breach their duties.
Separate shareholder derivative lawsuits were filed in 2023 on April 11, April 19, April 20, June 1, Sept. 6 and Sept. 12.
The complaints reference the settled — for $787.5 million — defamation lawsuit against Fox by Dominion, as well as the pending defamation suit by Smartmatic USA against Fox.
Fox News hosts and guests claimed the voting machines made by both companies were rigged, Laster wrote. "Behind the scenes, nearly everyone in the chain of command, including the show hosts, agreed that the claims were baseless," he wrote.
On March 26, 2021, Dominion sued Fox News for defamation in Delaware Superior Court, seeking $1.6 billion in damages. On Nov. 8, 2021, Dominion filed a second defamation lawsuit against Fox, noting that the Murdochs control the corporation, including Fox News, "and their personal responsibility for the false claims against Dominion," the vice chancellor wrote.
On the day the Dominion trial was scheduled to begin, Fox agreed to pay $787.5 million to settle Dominion's claims.
In their complaints, the pension funds "highlight Fox's illegal business model of pursuing profits by committing actionable defamation and allege that the company undertook no good-faith efforts to monitor for or mitigate defamation risk," Laster wrote.
"The funds also allege that the defendants took no meaningful steps to protect the company and are liable for the harm to Fox that has resulted from their breaches of fiduciary duty, including Fox's $787.5 million settlement with Dominion," he added. "The Board's failures have also brought increased scrutiny on Fox's adequacy to hold an FCC broadcast license."
New York City Retirement Systems owned $27.7 million in Fox stock as of Aug. 31, according to a Sept. 12 news release by city's pension system announcing its lawsuit. The $93 billion Oregon Public Employees Retirement Fund owned $5.2 million in Fox stock as of Aug. 31, according to a Sept. 12 news release by the state's attorney general, Ellen Rosenblum.
