The case relates to what Rosenblum called "false claims" promoted by the news network over the past few years, according to a Sept. 12 release.
By pushing such narratives that appealed to their audience regardless of the facts, the attorney general noted, Fox's board should have been especially sensitive to risks of defamation. Rosenblum cited a number of false claims made by Fox, including that election technology companies U.S. Dominion and Smartmatic USA rigged the 2020 presidential election.
A joint investigation launched earlier this year by the Oregon Department of Justice and the Oregon Treasurer's Office found that Fox's management on behalf of the company harmed investors, including Oregon's public employees. The lawsuit alleges that Fox's board knew that the news network's promotion of "political narratives without regard for whether the underlying factual assertions were true created significant exposure to defamation charges," the release stated.
The lawsuit also alleges that Fox made no good-faith efforts to monitor for or mitigate defamation risk.
Treasurer Tobias Read, a member of the Oregon Investment Council, which sets state investment policy, stated in the release: "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."
As of August 31, Oregon held 150,146 shares of Fox Class A stock and 76,169 shares of Fox Class B stock valued at about $5.2 million, the release noted.
"The board of Fox Corporation took a massive risk in pursuing profits by perpetuating and peddling known falsehoods," said Rosenblum in a statement. "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."
Earlier this year, Fox settled a defamation lawsuit filed by Dominion for $787.5 million.
The New York City Comptroller's Office, which manages the investments for the NYC Employees' Retirement System, said in a statement that all five New York City pension funds are plaintiffs in the suit against Fox.
"Fox's board of directors has blatantly disregarded the need for journalistic standards and failed to put safeguards in place despite having a business model that invites defamation litigation," said New York City Comptroller Brad Lander. "A lack of journalistic standards and a proper strategy to mitigate defamation has clearly harmed Fox's reputation and threatens their bottom line and long-term profitability. Clear governance systems are absolutely necessary for the long-term health of a company. As Fox's board continues to ignore these red flags, we are holding them accountable as long-term shareholders."
The five funds owned 572,946 shares of Fox Class A stock and 285,338 shares of Fox Class B stock, valued at $27.7 million as of August 31.
NYC Employees' Retirement System, which is composed of five separate pension funds, has $253.2 billion in assets.
Fox News could be immediately reached for comment.