Fox Corp. has been ordered to hand over hundreds of documents that could provide new details about Rupert Murdoch’s relationship with a longtime board member and how the media company handled major controversies over the past two decades.
The ruling was issued on Friday by Delaware Vice Chancellor Bonnie David in a shareholder lawsuit that has been ongoing for several years. The case seeks to hold Murdoch, his eldest son and Fox Corp. executive chairman and CEO Lachlan Murdoch, as well as other directors and executives accountable for how the company was governed.
The shareholders argue that Fox’s business practices repeatedly exposed the company to major scandals and expensive legal battles.
The lawsuit followed Fox’s nearly $800m settlement with Dominion Voting Systems, which had accused the network of promoting false claims about fraud in the 2020 US presidential election. Fox has also faced a separate defamation lawsuit from Smartmatic USA, which is seeking $2.7bn.
The shareholders’ case also references a settlement involving the family of Seth Rich, a former Democratic National Committee staffer who was killed in 2016.
Fox had published and later retracted a report alleging that Rich had leaked documents in an effort to damage Hillary Clinton’s presidential campaign, while also suggesting that the Democratic Party was connected to his death.
Another issue cited in the lawsuit is the phone hacking scandal that shook Britain more than a decade ago and has cost News Corp., another company controlled by the Murdoch family, about $1.5bn so far.
Fox Corp. was separated from News Corp. following the scandal, partly to protect Murdoch’s US television licences from possible challenges. The Murdochs have since explored bringing the two sides of the business back together.
At the centre of the shareholders’ case is the long-running relationship between Rupert Murdoch and Jacques Nasser, the former chief executive of Ford Motor Co.
Nasser has held positions on several Murdoch-controlled boards for more than 20 years and has received six-figure annual compensation for his work.
He served as an independent director at News Corp., 21st Century Fox and Fox Corp. He was also Fox Corp.’s lead independent director until stepping down in 2023, the same year Fox reached its Dominion settlement.
The position was intended to provide an independent counterweight to the Murdochs, who exercised significant influence over the company through both ownership and executive positions.
However, the shareholders are challenging whether Nasser was genuinely independent from the Murdoch family.
Their lawyers argue that if evidence shows Nasser was sufficiently close to the Murdochs to make decisions in their interests rather than those of Fox, they could establish that more than half of the company’s board was not independent. That would potentially allow the case to proceed to trial.
Fox lawyers attempted during Friday’s hearing in southern Delaware to prevent the release of a large collection of records, but the judge rejected the effort.
The documents include about 700 records containing the phrase “phone hacking”, numerous board meeting records from Fox and other organisations, as well as emails from Nasser’s Ford accounts.
The records could provide information about Murdoch and Nasser’s relationship, the selection of other Fox directors and the way the company responded to past controversies.
They could also shed more light on Murdoch’s practice of automatically deleting text messages, some of which may have been relevant to other legal proceedings.
Smartmatic has previously raised similar concerns in its case over Fox’s coverage of the 2020 election and accused Fox and Lachlan Murdoch of deliberately destroying evidence, CNN reported last year.
The shareholders’ lawyers are also examining Nasser’s time on the board of British Sky Broadcasting, commonly known as BSkyB.
Nasser spent about a decade on the British media company’s board, where he supported James Murdoch, Rupert’s younger son, as chief executive. He also backed the Murdochs during the phone hacking scandal and supported a controversial share buyback programme that, according to court documents, “increased the clout of the Murdoch family.”
Nasser later spent a combined decade as a director of 21st Century Fox and Fox Corp. He and Rupert Murdoch are also longtime members of the American Australian Association, an organisation founded by Murdoch’s father.
Fox’s lawyers acknowledged that Murdoch had been automatically deleting his text messages until around April 2022, after Dominion had already filed its lawsuit over Fox’s election coverage.
“Those documents were deleted wholesale is incorrect,” Anitha Reddy, one of Fox’s lawyers, told the court.
She said Murdoch generally communicated through email rather than text but acknowledged that “there was a period … when text messages were not retained.”
Despite Fox’s objections, David ruled in favour of the shareholders and ordered the company to provide a list of all email addresses previously used by Nasser and Murdoch, along with years of Fox board meeting minutes.
The shareholders’ lawyers will also be allowed to examine sealed documents from the Smartmatic case concerning allegations of Murdoch’s “spoliation” of records, a legal term referring to the destruction or loss of evidence.
Fox has separately accused executives at Dominion and Smartmatic of destroying evidence in their respective cases and has sought sanctions over those allegations.
The Dominion litigation also involved accusations that several Fox personalities and executives, including Pete Hegseth, who is now the US defence secretary, failed to preserve communications such as text messages and emails that should have been retained.
