Trial begins over claims Newsmax defamed Smartmatic in 2020 election reporting

WILMINGTON, Delaware, Sept 26 (Reuters) – A defamation trial against Newsmax Media kicks off on Thursday over allegations the conservative outlet damaged Smartmatic by broadcasting false claims that the voting machine company helped steal the 2020 U.S. presidential election from Donald Trump.

The trial in Wilmington, Delaware, will begin with selecting 12 jurors who will determine whether Newsmax purposely avoided the truth about the 2020 election to damage Smartmatic or whether it fairly reported claims made by Trump and his allies.

Trump lost the 2020 election to President Joe Biden but has repeatedly maintained without evidence the election was stolen.

Opening arguments in the trial are scheduled for Monday.

The stakes for Newsmax, a small company, are huge. An attorney for the broadcaster described the case as “bet your company” litigation in a Sept. 16 court hearing. Newsmax said in a June investor presentation it hopes to file for an initial public offering of its stock as soon as this year.

The four-week trial is expected to wrap up just days before the 2024 election, in which Trump is locked in a tight race with Vice President Kamala Harris.

Smartmatic sued Newsmax in 2021, alleging it falsely claimed the company switched votes in the 2020 election, that its machines were hacked and that it was funded by corrupt dictators. Smartmatic said its reputation was damaged and it lost business opportunities.

Smartmatic said that the alleged false reporting paid off for Newsmax. Trump amplified Newsmax’s reporting on social media and the broadcaster’s audience jumped 10-fold after the election, vaulting it past rivals such as CNBC and Fox Business, according to Nielsen Ratings.

Smartmatic has said that its machines were only used in Los Angeles County in the 2020 election and it has never suffered a security breach with its equipment, which has recorded billions of votes, largely in non-U.S. elections.

“We look forward to presenting evidence of its wrongdoing, questioning top Newsmax executives about its coverage and asking the jury to hold them liable,” Smartmatic said in a statement.

The news outlet, which like Smartmatic’s U.S. affiliate is based in Boca Raton, Florida, has said it had a First Amendment right to report claims by Trump and his supporters, which were often made in court filings challenging the election.

When Trump’s election allegations did not materialize, Newsmax said it updated viewers. On Dec. 21, 2020, it invited Smartmatic representatives to appear on a broadcast to address any perceived inaccuracies, but the voting machine maker did not respond. It has described its coverage of Smartmatic as “minor.”

Smartmatic has not publicly estimated the damages at stake, but Newsmax told the court on Sept. 16 the voting machine company was seeking $400 million to $600 million. Newsmax had $67 million in assets at the end of 2022, according to a securities filing.

Delaware Superior Court Judge Eric Davis decided this month that Smartmatic was unable to prove that Newsmax’s primary motive was to harm Smartmatic. As a result, the company is unable to ask for punitive damages.

False claims about the 2020 election have led to several defamation settlements or verdicts.

Fox News and Fox Corp  settled a defamation case by Dominion Voting Systems last year for $787.5 million and a jury decided last year that former Trump attorney Rudy Giuliani had to pay $148 million to two former Georgia election workers he accused of election rigging. Giuliani has appealed.

Other defamation cases from the 2020 election are ongoing.

Smartmatic is suing Fox in New York for $2.7 billion and Dominion is seeking up to $1.6 billion in damages against Newsmax, also in the Delaware court.