Smartmatic USA Corp. v. Newsmax Media, Inc. ( 2023 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
SMARTMATIC USA CORP., )
SMARTMATIC INTERNATIONAL )
HOLDING B.V., and SGO )
CORPORATION LIMITED, )
)
Plaintiffs, ) C.A. No.: N21C-11-028 EMD
v. )
)
NEWSMAX MEDIA, INC., , )
)
Defendant. )
Submitted: December 12, 2022
Decided: February 3, 2023
Upon Defendant Newsmax Media, Inc.’s Motion for Judgment on the Pleadings,
DENIED
Michael J. Barrie, Esquire, Kate Harmon, Esquire, Benesch, Friedlander, Coplan & Aronoff
LLP, Wilmington, Delaware; J. Erik Connolly, Esquire, Nicole Wrigley, Esquire, Benesch,
Friedlander, Coplan & Aronoff LLP, Chicago, Illinois. Attorneys for Plaintiffs Smartmatic USA
Corp., Smartmatic International Holding B.V., and SGO Corporation Limited.
Richard L. Renck, Esquire, Tracey E. Timlin, Esquire, Duane Morris LLP, Wilmington,
Delaware; Howard M. Cooper, Esquire, Joseph M. Cacace, Esquire, Jason M. Brown, Esquire,
Todd & Weld LLP, Boston, Massachusetts; Mark A. Lerner, Esquire, Duane Morris LLP, New
York, New York. Attorneys for Defendant Newsmax Media, Inc.
DAVIS, J.
I. INTRODUCTION
This is a civil action involving a defamation claim. Plaintiffs Smartmatic USA Corp.,
Smartmatic International Holding B.V., and SGO Corporation Limited (collectively,
“Smartmatic”) allege Defendant Newsmax Media, Inc. (“Newsmax”) published false and
defamatory statements about Smartmatic relating to Smartmatic’s role in the 2020 United States
Presidential Election (the “Election”). Specifically, Smartmatic alleges Newsmax “published
and/or republished false statements and implications” during news broadcasts, in online reports,
and on social media that “Smartmatic participated in a criminal conspiracy” to fix, rig, and steal
the Election.1 Smartmatic maintains Newsmax’s statements constitute defamation per se
because the statements charge Smartmatic with a “serious crime and were of a nature tending to
injure Smartmatic in its trade, business, and profession.”2 Smartmatic seeks damages, including
economic and punitive damages.3
Newsmax moved for judgment on the pleadings, filing its Motion for Judgment on the
Pleadings pursuant to Delaware Superior Court Civil Rule 12(c) (the “Motion”).4 Smartmatic
opposed the Motion. On December 12, 2022, the Court heard oral argument on the Motion. At
the conclusion of the hearing, the Court took the Motion under advisement. For the reasons set
forth below, the Motion is DENIED.
II. RELEVANT FACTS
A. THE PARTIES
Plaintiff Smartmatic USA Corp. is an “election technology and software company.”5
Smartmatic USA Corp. is incorporated in Delaware and has its principal place of business in
Boca Raton, Florida.6 During the Election, Smartmatic USA Corp. “provided election
technology and software” for only Los Angeles County.7 Smartmatic USA Corp. “played no
part in the counting or tabulation of votes” in Los Angeles County.8
Plaintiff Smartmatic International Holding B.V. owns 100% of Smartmatic USA Corp.9
Smartmatic International Holding B.V. is incorporated in the Netherlands and has its principal
1
Complaint (“Compl.”) ¶ 432, Nov. 3, 2021 (D.I. 1).
2
Id. ¶ 440.
3
See id. ¶ 448.
4
See Defendant’s Motion for Judgment on the Pleadings (“Motion”), June 10, 2022 (D.I. 69, D.I. 70).
5
Compl. ¶ 11.
6
Id.
7
Id.
8
Id.
9
Id. ¶ 12.
2
place of business in Amsterdam, Netherlands.10 Smartmatic International Holding B.V. “owns
multiple companies operating under the Smartmatic brand in almost two dozen countries.”11
Smartmatic International Holding B.V. “did not play any role in the [Election] outside of the
technology and software provided by Smartmatic USA Corp. for Los Angeles County.”12
Plaintiff SGO Corporation Limited owns 100% of Smartmatic International Holding
B.V.13 In other words, SGO Corporation Limited owns 100% of Smartmatic International
Holding B.V., which owns 100% of Smartmatic USA Corp. SGO Corporation Limited is
incorporated in the United Kingdom and has its principal place of business in London, United
Kingdom.14 SGO Corporation Limited “did not play any role in the [Election] outside of the
technology and software provided by Smartmatic USA Corp. for Los Angeles County.”15
Defendant Newsmax oversees: (i) Newsmax news channels on television; (ii) the news
website Newsmax.com; (iii) mobile apps for smartphone devices; and (iv) social media accounts,
including the @newsmax Twitter handle and a YouTube page.16 Newsmax is incorporated in the
State of Delaware and has its principal place of business in West Palm Beach, Florida.17 The
Complaint notes that references to “Newsmax” include its “anchors, hosts, and producers
working at the direction of Newsmax and within the scope of their employment with
Newsmax.”18
10
Id.
11
Id.
12
Id.
13
Id. ¶ 13.
14
Id.
15
Id.
16
Id. ¶ 15.
17
Id.
18
Id. ¶ 15 n.3.
3
B. SMARTMATIC’S ROLE AS AN ELECTION TECHNOLOGY COMPANY
Smartmatic was founded in 2000 in Boca Raton, Florida.19 Smartmatic had two
founders, Antonio Mugica and Roger Piñate. Mr. Mugica and Mr. Piñate are originally from
Venezuela. Smartmatic began as a secure online set of protocols in the banking industry but
shifted its focus to election technology and software following the 2000 United States
Presidential Election.20 Since 2003, “Smartmatic’s election technology has processed more than
5 billion secure votes worldwide without a single security breach.”21 Smartmatic has provided
its services in more than twenty-five countries.22 Smartmatic’s mission is to “increase integrity
in the democratic process through enhanced citizen engagement and trust in election systems.”23
Currently, Smartmatic provides “end-to-end election services to local, state, and national
governments.”24 Its products include electronic voting machines, electronic counting machines,
ballot marking devices, voter management, poll worker support, online voting, and election
management platforms.25
In 2004, Smartmatic’s technology was used “in the first automated election in
Venezuela.”26 The technology provided both an electronic and paper trail for each vote, which
allowed election officials to cross-check and audit the vote count to ensure accurate results.27
Newsmax discussed the 2004 Venezuelan election often because Smartmatic contracted with the
19
Id. ¶ 20.
20
Id. ¶¶ 20-21.
21
Id. ¶ 22.
22
Id.
23
Id. ¶ 23.
24
Id. ¶ 24.
25
Id. ¶ 25.
26
Id. ¶ 27.
27
Id.
4
“Hugo Chávez-led Venezuelan government.”28 From 2004 through 2019, Smartmatic provided
election software and technology to various countries for elections.29
In 2018, Los Angeles County selected Smartmatic to help manufacture and implement a
new election system in the County.30 Specifically, Los Angeles County has a “Voting Solutions
for All People” (“VSAP”) initiative, which is intended to ensure greater voter participation
through “convenient, accessible, and secure” voting options.31 Smartmatic and Los Angeles
County entered into a contract whereby Smartmatic would “manufacture (hardware and
software) and implement new custom-designed [ballot marking devices]” as part of the VSAP
initiative.32 For the Election, Smartmatic did the following for Los Angeles County: “(1)
engineered and manufactured the [ballot marking device] hardware,” “(2) programmed and
installed the [ballot marking device] software,” “(3) led the California certification process,” “(4)
created the backend software to manage the devices,” “(5) provided systems integration
services,” “(6) built the VSAP operations center,” “(7) handled logistics and setup/breakdown of
vote centers,” “(8) oversaw real-time data management for deployment,” and “(9) supplied Help
Desk services on Election Day.”33
Smartmatic alleges that the Election in Los Angeles County, the largest voting
jurisdiction in the United States, was flawless from a technology perspective.34 Newsmax
highlights a Politico article, which is Complaint Exhibit 114, to contest Smartmatic’s assertion.35
28
Motion at 7.
29
See Compl. ¶¶ 27-41.
30
Id. ¶ 46.
31
Id. ¶¶ 48-49.
32
Id. ¶ 51.
33
Id. ¶ 53.
34
See id. ¶¶ 57-58.
35
See Defendant’s Answer and Counterclaim (“Answer & Countercl.”) ¶ 57 n.6, Feb. 4, 2022 (D.I. 59); see also
Compl., Ex. 114 (noting that the voting system in Los Angeles County had “numerous security flaws”).
5
Smartmatic did not play a role in the Election outside of Los Angeles County.36
Smartmatic’s “technology, software, equipment, and services” were not used outside of Los
Angeles County in the Election.37 Smartmatic did not license or contract “with any third party,
including other election technology companies [i.e., Dominion Voting Systems], for the use of
Smartmatic’s technology, software, machines or services” during the Election.38 Smartmatic
played no role in the states with close vote tallies, particularly Nevada, Arizona, Georgia,
Pennsylvania, Michigan, and Wisconsin.39 “Apart from commenting on its role in the [Election]
in Los Angeles County, Smartmatic made no public comments about the [Election]” before
Newsmax began its alleged “disinformation campaign.”40
C. THE ELECTION, NEWSMAX’S GROWING AUDIENCE, AND NEWSMAX’S ELECTION
COVERAGE THROUGH NOVEMBER 16, 2020
Joe Biden and Kamala Harris won the Election. There were 306 electoral votes for the
President Biden, and 232 for then-President Trump.41 Governors, Secretaries of State, members
of the Election Infrastructure Government Coordinating Council Executive Committee, members
of the Election Infrastructure Sector Coordinating Council, various state and federal courts, then-
Attorney General William Barr, and others confirmed the security, reliability, and accuracy of
the Election.42
From July 2020 to the week before the Election, Newsmax “averaged 58,000 viewers
from 7 to 10 p.m. on weekdays.”43 At that time, Fox News’ viewership numbers far exceeded
36
Compl. ¶ 60.
37
Id.
38
Id.
39
Id. ¶ 61.
40
Id. ¶ 62.
41
Id. ¶ 63.
42
Id. ¶¶ 63-74; see also id., Exs. 82, 76, 62, 73, 123, 159, 127, 152-55, 158.
43
Id. ¶ 75, Ex. 146.
6
Newsmax’s viewership.44 One week after the Election, Newsmax’s ratings jumped ten-fold from
its pre-Election numbers.45 After the Election, then-President Trump tweeted Newsmax clips to
his Twitter followers, which Newsmax highlighted to its viewers.46 In the three days following
the Election, Newsmax’s viewership surpassed Fox Business and CNBC.47 These coverage
increases led to more viewers and more money for Newsmax.48
Shortly after the Election, Rudolph Giuliani and Sidney Powell disseminated a false
narrative that the Election was rigged for President Biden through manipulation of election
technology.49 Mr. Giuliani and Ms. Powell started to appear regularly on Fox News around
November 12, 2020, and casted Smartmatic and Dominion Voting Systems as the wrongdoers.50
On November 14, 2020, Steve Bannon, then-President Trump’s former Chief Strategist,
appeared on his Newsmax podcast, War Room.51 Mr. Bannon’s guest, Brian Kennedy, identified
by Newsmax as the “Chairman of the Committee on the Present Danger,”52 stated that
Smartmatic made voting machines that scanned election ballots and alleged that Smartmatic’s
CEO was a “Venezuelan national, and a leftist and somebody who . . . built these machines using
Chinese components that themselves could be hacked into.”53 Mr. Kennedy claimed there was
“industrial level ballot manipulation,” and that this was “election fraud, not voter fraud.”54
44
Id. ¶ 75.
45
Id. ¶ 76. Newsmax’s daytime viewership also increased by a multiple of ten, and the number of daily active users
on its mobile app increased fourteen-fold from pre- to post-Election. Id. ¶ 76, Exs. 146, 148.
46
Id. ¶ 77, Ex. 150.
47
Id. ¶ 78, Ex. 151.
48
Id. ¶ 78.
49
Id. ¶ 80.
50
Id. ¶¶ 81-82.
51
Id. ¶ 84, Exs. 1-2.
52
Id. ¶ 84.
53
Id.
54
Id. ¶ 84, Ex. 2.
7
On November 16, 2020, six Newsmax programs aired allegedly “false and defamatory
statements about Smartmatic.”55 The programs were: Wake Up America, The Chris Salcedo
Show, National Report, John Bachman Now, The Howie Carr Show, and Greg Kelly Reports.56
“Newsmax used Fox News’[] interviews with Rudolph Giuliani and Sidney Powell on Sunday
Morning Futures with Maria Bartiromo as a launching pad.”57 The Bartiromo show stated,
among other things, “the Smartmatic system has a back door” to allow for “an intervening party
a real-time understanding of how many votes will be needed to gain an electoral advantage.”58
Mr. Giuliani stated this occurred at least in Michigan.59 In the same interview, Ms. Powell took
aim at Peter Neffenger, the Chairman of Smartmatic USA Corp.’s Board of Directors and a
member of the Biden transition team.60 Ms. Powell stated “Trump won by not just hundreds of
thousands of votes, but by millions of votes that were shifted by this software that was designed
expressly for that purpose,”61 and “[the software] was exported internationally for profit by the
people that are behind Smartmatic.”62 Ms. Powell went on:
But this is a massive election fraud. And I’m very concerned it involved not only
Dominion and its Smartmatic software, but that the software essentially was used
by other election machines also. It’s the software that was the problem. Even their
own manual explains how votes can be wiped away.63
At the time Newsmax aired the Fox News interviews, Newsmax had “no evidence that
the [Election] had been rigged or stolen.”64 Chris Salcedo, the Newsmax anchor who aired the
55
Id. ¶ 85.
56
Id.
57
Id. ¶ 86.
58
Id. ¶ 86, Ex. 3.
59
Id.
60
Id. ¶ 86, Ex. 3; see also id. ¶ 112 (stating that Mr. Neffenger is a retired Admiral, was the Chairman of Smartmatic
USA Corp.’s Board, and was previously the Administrator of the Transportation Security Administration).
61
Id. ¶ 86, Ex. 3.
62
Id.
63
Id.
64
Id. ¶ 88.
8
Fox News interview, stated Dominion/Smartmatic had “a back door software built in,” which “is
probably one of the reasons why Texas said no to the software[],” and suggested “Smartmatic
Dominion software” allowed users to change results.65 Mr. Salcedo had no evidence to support
the assertion that Texas disallowed Smartmatic software because of a backdoor, nor that
Smartmatic was used to conduct sham elections.66
Also on November 16, 2020, John Bachman Now host, John Bachman, interviewed Liz
Harrington, a former spokesperson for the Republican National Committee.67 Ms. Harrington
stated “Sidney Powell is absolutely correct that this company was actually designed to steal
elections for socialist dictator Hugo Chávez in Venezuela. That’s what Smartmatic was designed
to do.”68 At this time, Newsmax “had not seen any evidence to support the statements it
published regarding Smartmatic,” nor did the individuals interviewed by Newsmax provide
evidence to support their statements.69
Later in the day on November 16, 2020, the Howie Carr Show interviewed L. Lin Wood,
who described himself as an attorney helping President Trump in an “unofficial capacity” and
working with Mr. Giuliani and Ms. Powell.70 Mr. Wood discussed the “voting machines” used
in the Election, which he stated were “subject to manipulation.”71 Mr. Wood went on:
It started in Venezuela. It connects into Cuba. It connects into Frankfurt, Germany,
where servers were stored, in Barcelona, and it tracks back ultimately to a company
known as SGO Smartmatic. They developed software, that software went into a
number of voting machines, almost exclusively used in the Dominion machine.
The information was then processed through Scytl, that’s where the manipulations
occurred in the software that was reported to a company called Clarity . . . This is
a scheme developed initially in Venezuela. And the scheme amounts to being able
to go and buy an election in any given country. They did it in Argentina. They’ve
65
Id. ¶ 89, Ex. 3.
66
Id. ¶ 90.
67
Id. ¶ 91, Exs. 5-6.
68
Id. ¶ 93, Ex. 5.
69
Id. ¶ 94.
70
Id. ¶¶ 95-96, Exs. 7-8.
71
Id. ¶ 98, Ex. 7.
9
done it in Chile. Now they’ve sold it to someone with the interest in manipulating
the presidency for the United States.72
At the time of the Howie Carr Show, Newsmax had not seen evidence to support Mr. Wood’s
statements, nor had Mr. Wood provided any evidence to support them.73
Similar statements were made throughout the day on Newsmax’s programming.74 Hosts
and guests made many statements. For example, Joe diGenova, a lawyer being interviewed on
National Report,75 stated:
[Neffenger] is working for a company, Smartmatic and Dominion, which was
created for Hugo Chávez in order to rig elections. Smartmatic has a history of bad
performance, of bad election outcomes. They have been deplatformed in many
states as a result of poor performance. . . . And I think the American people, and
the people in the 27 states that had this software running their systems need to ask
their public officials, why in the world would you hire this company?76
At the time of the show, “Newsmax had not seen any evidence to support the assertion
that Smartmatic had rigged the [Election],” that Smartmatic’s technology or software was used
anywhere outside of Los Angeles County, or that Smartmatic engaged in a quid pro quo with Mr.
Neffenger, a member of President Biden’s transition team.77 The individual guests, like Mr.
diGenova, also did not present any evidence.78 Smartmatic believes Newsmax had “obvious
reasons to doubt the credibility of the people it quoted and the statements it published.”79
D. NEWSMAX’S COVERAGE OF THE ELECTION AND SMARTMATIC POST-NOVEMBER 16,
2020
From the second half of November 2020 through December 2020, Newsmax continued to
cover Election events. On November 17, 2020, Emerald Robinson, Newsmax’s White House
72
Id.
73
Id. ¶ 99.
74
See id. ¶¶ 100-14.
75
Id. ¶¶ 109-11, Exs. 18-19.
76
Id. ¶ 111, Ex. 18.
77
Id. ¶ 114.
78
Id.
79
Id.
10
correspondent, stated “Smartmatic according to [a] whistleblower [inaudible] software is
essentially the ancestor for the software used by Dominion voting machines and every other
tabulating machine. The whistleblower is saying that Smartmatic software is the DNA of every
vote tabulating software.”80 At the time of the broadcast, “Newsmax knew there was no
evidence supporting a claim that” Smartmatic’s software and technology were used outside Los
Angeles County, nor was there evidence that Smartmatic’s software was the “DNA” of all vote
tabulating software.81
On November 19, 2020, on The Chris Salcedo Show, Mr. diGenova stated Smartmatic
sent votes overseas to servers in Europe “for tabulation,” and that such votes “can be subjected to
tampering, they can be accessed, they can be hacked before they are returned to the United
States.”82 On the same broadcast, Newsmax republished a statement by Ms. Powell that
Smartmatic was linked to the late Hugo Chávez.83 On the same day, Newsmax stated it had its
own “investigative unit.”84 Smartmatic claims these statements were unsupported, and that
Newsmax published the “lies as part of its disinformation campaign against Smartmatic.”85
On November 28, 2020, Michelle Malkin, a Newsmax anchor, stated:
[S]everal Smartmatic officials left the country. Including a veteran Smartmatic
official named Heider Garcia. This Venezuelan-born operative now serves, believe
it or not as election administrator for Tarrant County, Texas. That’s the county
which turned blue for the first time since 1964. After the introduction of the dum
dum dum new electronic voting machines.86
80
Id. ¶ 116, Ex. 21.
81
Id. ¶ 117.
82
Id. ¶ 121, Ex. 25.
83
Id. ¶ 122, Ex. 25.
84
Id. ¶ 132, Ex. 31.
85
Id. ¶ 133.
86
Id. ¶ 149, Ex. 38.
11
Smartmatic claims that “Newsmax had not seen any evidence indicating that Smartmatic was
used in Texas.”87
On December 17, 2020, Michael Flynn, former White House national security advisor
who was fired for making false statements to government officials,88 appeared on Greg Kelly
Reports. Mr. Flynn stated (i) then-President Trump won the Election, (ii) it was clear there was a
“foreign influence” tied to the voting systems, and (iii) there had been “problems all over the
country with this, not only Dominion but also this Smartmatic software.”89 On the same show,
Patrick Byrne, former CEO of Overstock.com, stated “Chinese fingerprints are indeed on
Smartmatic,” which he said in the context of a larger statement that Smartmatic was foreign-
funded.90 Smartmatic claims Newsmax had no evidence to support these statements, nor did any
of its guests.91
On December 18, 2020, American Agenda’s host interviewed Dick Morris, a “regular
Newsmax contributor” at the time and now a Newsmax host.92 Morris stated:
This is actual intervention in the vote count. This is through Dominion software
and Smartmatic and the accusation is here is that the vote count itself was altered
and flipped through that software. You know, it’s been proven in one county in
Michigan, which had a two-week long forensic audit and showed that the results
that originally said that Biden won with 63% were wrong, and Trump won it by
61%.93
Smartmatic claims Newsmax and its contributors had no evidence that Smartmatic fixed the
Election, or that Smartmatic’s software was used by Dominion.94
In total, the Complaint alleges that Newsmax stated or implied:
87
Id. ¶ 150.
88
Id. ¶¶ 373-76, Ex. 157.
89
Id. ¶ 166, Ex. 45.
90
Id. ¶ 167, Ex. 47.
91
Id. ¶ 168.
92
Id. ¶ 169; id. ¶ 169 n.7.
93
Id. ¶ 170, Ex. 49.
94
Id. ¶ 172.
12
• Smartmatic’s election technology and software were widely used in the
[Election];
• Smartmatic fixed, rigged, and stole the [Election] for Joe Biden and Kamala
Harris;
• Smartmatic’s election technology and software (1) were compromised or
hacked during the [Election] and (2) sent votes overseas to be compromised or
hacked;
• Smartmatic was founded and funded by corrupt dictators from socialist and
communist countries; and
• Smartmatic’s election technology and software were designed to and have
fixed, rigged, and stolen elections before.95
E. NEWSMAX’S COVERAGE OF SMARTMATIC AS FACTUAL AND EVIDENCE-BASED
The CEO of Newsmax, Christopher Ruddy, previously stated “America is making the
switch to Newsmax TV for fair, unbiased journalism.”96 In the wake of the Election, Smartmatic
alleges that the republished interviews, the Newsmax guests, and the Newsmax anchors made
various comments to insinuate their coverage was fact- and evidence-based reporting. For
instance, the following phrases were used: “sworn witness testimony”; “we have so much
evidence I feel like it’s coming in through a fire hose”; “I’ve seen sworn affidavits”; “I’ve seen
sworn video statements”; “we’ve got the statistical and mathematical evidence that’s absolutely
irrefutable”; “there are hundreds of sworn affidavits which are in fact evidence”; “it proves all
the research that our investigative unit here on Stinchfield has been uncovering.”97
Additionally, the Complaint alleges Newsmax “discussed [certain] guests’ background
and experience as lawyers to create the impression that they were reliable sources of fact.”98
Moreover, Smartmatic charges that certain guests and anchors encouraged viewers to discount or
ignore people who questioned the basis of the Election fraud claims.99
95
Id. ¶ 173.
96
Id. ¶ 175, Ex. 147.
97
See id. ¶ 178.
98
Id. ¶ 179.
99
See id. ¶ 180, Exs. 9, 43, 29, 27.
13
F. AVAILABLE INFORMATION REFUTING NEWSMAX’S CLAIMS AGAINST SMARTMATIC
The Complaint claims Newsmax had access to information that would show Newsmax’s
statements about Smartmatic were false. First, publicly available information showed
Smartmatic’s technology and software were not used outside of Los Angeles County for the
Election because each state publicly disclosed the technology it used for the Election.100 Second,
information indicated Smartmatic did not use its technology to fix, rig, or steal the Election.
This includes information that Smartmatic was not used outside of Los Angeles County;101
statements issued by national security agencies confirming the “security of the election
infrastructure”;102 statements issued by election officials and election security experts that stated
the Election was “the most secure in American history”;103 and a statement by the National
Association of Secretaries of State that it “never heard of votes being tabulated in a foreign
country.”104
Additionally, those states with contested Election results performed audits and/or issued
statements “verifying their election process and rejecting claims of fraud or rigging.”105 On
November 17, 2020, Dominion sent an email to Newsmax’s booking producer, Alicia Hessee,
titled, “SETTING THE RECORD STRAIGHT.”106 This email highlighted the following points,
among others:
• There was “no evidence that any voting system deleted or lost votes, changed votes, or
was in any way compromised”;107
100
Id. ¶ 254; see, e.g., id. ¶ 255, Exs. 60, 63 (Georgia); id. ¶ 256, Exs. 66-68 (Michigan); id. ¶ 257, Exs. 70-72
(Pennsylvania); id. ¶ 258, Ex. 75 (Arizona); id. ¶ 259, Exs. 77-78 (Wisconsin); id. ¶ 260, Ex. 80 (Nevada); id. ¶ 261,
Exs. 143-44 (Texas).
101
Id. ¶ 284, Exs. 85, 125.
102
Id. ¶¶ 285-87, Ex. 112.
103
Id. ¶¶ 288-93, Exs. 117, 119, 121, 127.
104
Id. ¶ 295, Ex. 132.
105
Id. ¶ 298; see also id. ¶¶ 299-309, Exs. 61-63, 65, 69, 73-74, 76, 79, 81-82, 123.
106
Id. ¶ 312, Ex. 160 (capitalization in original).
107
Id. ¶ 312(a).
14
• Factual information that supported the notion that “[v]ote deletion/switching assertions
are completely false”;108
• Michigan’s and Georgia’s Secretary of State websites that provided information that
debunked claims of vote manipulation;109 and
• Links to the Election Assistance Commission’s and the Cybersecurity and Infrastructure
Security Agency’s websites, which noted that all voting systems provide assurances that
they work accurately and reliably.110
On December 11, 2020, Smartmatic sent Newsmax a retraction demand letter, explaining
why the statements regarding election fixing, rigging, and stealing were false.111 Additionally, in
December 2020, Dominion sent retraction demand letters to Newsmax.112
Third, Smartmatic maintains that information existed to show Smartmatic’s technology
and software were not compromised or hacked during the Election.113 Smartmatic also contends
that information existed that shows that Smartmatic did not send votes overseas to be
compromised or hacked.114
Fourth, the Complaint alleges that information existed to show Smartmatic was not
controlled by corrupt dictators. For instance, Smartmatic’s website states it has no ties to
governments or political parties;115 Smartmatic made statements that it has no ties to Hugo
Chávez;116 and Smartmatic halted work with the Venezuelan government in 2017 after that
government reported false turnout numbers.117
Fifth, Smartmatic avers that information existed to show Smartmatic’s technology was
not designed with a purpose to fix, rig, or steal elections. For instance, the Complaint notes that
108
Id. ¶ 312(b).
109
Id. ¶ 312(c)-(d).
110
Id. ¶ 312(e).
111
Id. ¶ 314, Ex. 54.
112
Id. ¶ 315, Ex. 56.
113
See id. ¶ 316; see also id. ¶¶ 318-31.
114
Id.
115
Id. ¶ 335, Exs. 83, 85.
116
Id. ¶ 336, Ex. 100.
117
Id. ¶ 337, Exs. 85, 106.
15
third party validators authenticated Smartmatic’s technology, including the State of California,
PricewaterhouseCoopers, and the U.S. Election Assistance Commission.118
G. PROCEDURAL POSTURE
On November 3, 2021, Smartmatic filed this action against Newsmax and alleged one
cause of action—defamation for false statements and implications about Smartmatic.119
Specifically, Smartmatic alleged Newsmax committed defamation per se because Newsmax
“charged Smartmatic with a serious crime,” and the statements “were of a nature tending to
injure Smartmatic in its trade, business, and profession.”120 On February 4, 2022, Newsmax
filed its Answer and a Counterclaim under anti-SLAPP statutes.121 Additionally, Newsmax
asserted neutral reportage privilege as an affirmative defense.122 On February 24, 2022,
Smartmatic filed its Answer to Newsmax’s Counterclaim.123
On June 10, 2022, Newsmax filed the Motion.124 Smartmatic opposed the Motion.125 On
December 12, 2022, the Court heard oral argument on the Motion and took the matter under
advisement.126
III. PARTIES’ CONTENTIONS
Newsmax contends Smartmatic has not satisfied the elements to plead defamation, and,
even if Smartmatic did, Newsmax is protected by the neutral reportage privilege. Specifically,
Newsmax argues most of the challenged statements in the Complaint do not satisfy the “of and
118
Id. ¶ 345.
119
See id. ¶¶ 431-47.
120
Id. ¶ 440.
121
See Answer & Countercl. at Count One.
122
See id. at Ninth Affirmative Defense.
123
See Answer to Counterclaim (“Answer to Countercl.”), Feb. 24, 2022 (D.I. 60).
124
See Motion.
125
See Plaintiffs’ Answering Brief (“Answering Br.”), Aug. 9, 2022 (D.I. 78). Newsmax filed its Reply on
September 30, 2022. See Defendant’s Reply Brief (“Reply Br.”), Sept. 30, 2022 (D.I. 106).
126
See Judicial Action Form, Dec. 12, 2022 (D.I. 127).
16
concerning the plaintiff” element of defamation.127 Newsmax also claims Smartmatic is at least
a limited purpose public figure, and, as such, Smartmatic failed to plead facts to support a claim
that Newsmax acted with actual malice when it published the allegedly defamatory statements.128
Finally, Newsmax maintains its speech is protected under the neutral reportage privilege.129
Specifically, Newsmax argues this privilege applies because Newsmax “accurately reported
unprecedented allegations without endorsing those allegations.”130
Smartmatic contends it is not a public figure, and actual malice does not apply.131
Smartmatic further contends, even if it is a public figure, it sufficiently pled facts to show
Newsmax published defamatory statements with actual malice.132 Regarding the neutral
reportage privilege, Smartmatic argues Newsmax failed to show the privilege applies under
either New York law or Florida law.133 Smartmatic asserts it sufficiently pled facts supporting
defamation; namely, it alleged facts that show the statements satisfy the “of and concerning the
plaintiff” requirement for defamation.134 Smartmatic also contends it pled facts that show the
statements published by Newsmax were false.135
IV. STANDARD OF REVIEW
A party may move for judgment on the pleadings under Civil Rule 12(c).136 When the
Court decides a motion under Civil Rule 12(c), it must view the facts pled and the inferences to
127
See Motion at 13.
128
See id. at 20.
129
See id. at 48.
130
See id. at 54.
131
See Answering Br. at 20.
132
See id. at 25.
133
See id. at 43-49.
134
See id. at 55.
135
See id. at 62.
136
Del. Super. Ct. Civ. R. 12(c).
17
be drawn from those facts in a light most favorable to the non-moving party.137 Additionally, the
Court takes the well-pled facts alleged in the complaint as admitted.138 The Court also assumes
the truthfulness of all well-pled factual allegations in the complaint.139 Therefore, the Court must
accord a plaintiff opposing a Civil Rule 12(c) motion the same benefits as a plaintiff opposing a
Civil Rule 12(b)(6) motion.140 Given the similarity between 12(b)(6) motions and 12(c) motions,
“the Court engages certain 12(b)(6) procedures during 12(c) review.”141 For example, the Court
can consider documents outside the pleadings that are integral to and incorporated into the
them.142 This may be done without converting the 12(c) motion into a motion for summary
judgment.143 The Court may grant a motion for judgment on the pleadings “only when no
material issue of fact exists and the movant is entitled to judgment as a matter of law.”144
V. DISCUSSION
A. NEWSMAX’S EXHIBITS AND CHOICE OF LAW
Before the Court reaches the substance of Newsmax’s Motion, there are two preliminary
matters to resolve: (i) whether the exhibits attached to the Motion can be considered, and (ii)
whether the Court must determine the choice of law at this stage.
Newsmax filed numerous exhibits with its Motion. Newsmax states the exhibits, which
are “articles and other documents,” are “not cited for the truth of the facts asserted, but rather to
show the public discussion and context of the Newsmax reporting” because “context is critical”
137
See Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P., 624 A.2d 1199, 1205 (Del. 1993);
see also Warner Commc’ns, Inc. v. Chris–Craft Indus., Inc., 583 A.2d 962, 965 (Del. Ch. 1989), aff’d without
opinion, 567 A.2d 419 (Del. 1989).
138
Desert Equities, Inc., 624 A.2d at 1205; Warner Commc’ns, Inc., 583 A.2d at 965.
139
See McMillan v. Intercargo Corp., 768 A.2d 492, 500 (Del. Ch. 2000).
140
See id.141
Intermec IP Corp. v. TransCore, LP, 2021 WL 3620435, at *8 (Del. Super. Aug. 16, 2021) (citation omitted).
142
Id. (citations omitted).
143
Sapienza v. Delaware State Univ. Police Dep’t, 2020 WL 4299137, at *2 (Del. Super. July 24, 2020) (citation
omitted).
144
Desert Equities, Inc., 624 A.2d at 1205; Warner Commc’ns, Inc., 583 A.2d at 965.
18
for the Motion.145 Newsmax cites to Camejo v. Angelini Pharma Inc.146 to support its
argument.147
Camejo states in the 12(b)(6) context, which is equally applicable in the 12(c) context,
that “the Court may consider certain extrinsic documents when they are: (1) integral to the
plaintiff’s claim and incorporated into the complaint[,] (2) not being relied upon to prove the
truth of its contents, and (3) an adjudicative fact to judicial notice.”148 Essentially, Newsmax
looks to the second prong.149
Newsmax’s exhibits will not be considered. Camejo cites In re Gardner Denver, Inc.,
which cites Vanderbilt Income & Growth Assocs., L.L.C. v. Arvida/JBM Managers, Inc.150
Vanderbilt Income states documents outside the pleadings can be incorporated “when the
document is not being relied upon to prove the truth of its contents.”151 Vanderbilt Income cites
In re Santa Fe Pac. Corp. S’holder Litig., which discusses the “truth of its contents” prong and
states courts “have also considered the relevant publication in libel cases.”152 The case that In re
Santa Fe Pac. Corp. S’holder Litig. cites for the libel example is Fudge v. Penthouse Int’l,
Ltd.153 In Fudge, the First Circuit affirmed a district court’s consideration of an article that the
defendant attached to its motion to dismiss.154 The First Circuit affirmed the district court
145
See Motion at 6 n.3.
146
2021 WL 141338 (Del. Super. Jan. 15, 2021).
147
See Motion at 6 n.3.
148
Camejo, 2021 WL 141338, at *2 (cleaned up) (citing In re Gardner Denver, Inc., 2014 WL 715705, at *2 (Del.
Ch. Feb. 21, 2014)).
149
See Motion at 6 n.3.
150
691 A.2d 609, 613 (Del. 1996).
151
Id. (citing In re Santa Fe Pac. Corp. S’holder Litig., 669 A.2d 59, 70 (Del. 1995)).
152
In re Santa Fe Pac. Corp. S’holder Litig., 669 A.2d at 70.
153
840 F.2d 1012, 1015 (1st Cir. 1988).
154
See id. at 1015.
19
because, inter alia, “the article was not merely referred to in plaintiffs’ complaint but was
absolutely central to it.”155 That is not the case here.
Here, Newsmax asserts the articles and other documents are intended to show the public
discussion and context of Newsmax reporting.156 That is distinct from what the above caselaw
holds. Additionally, Newsmax cited no legal authority other than Camejo for its proposition.
The Court does not agree that Camejo and the cases on which it relies stand for the proposition
that the Court should consider the Motion’s exhibits. As such, the Court will exclude the
Motion’s exhibits as matters outside the pleadings.157
The next issue is whether the Court must determine the choice of law governing this
action now, or whether it is premature to do so at this stage.
Newsmax argues that “[t]o the extent the Court applies substantive law beyond federal
constitutional principles, Florida law should govern.”158 To support its argument, Newsmax
notes Delaware courts apply the Restatement (Second) of Conflict of Laws (the
“Restatement”).159 Newsmax argues the Restatement “points to the law of the plaintiff’s
domicile” in internet-published defamation actions.160 Newsmax is referring to Smartmatic USA
Corp.’s principal place of business in Boca Raton, Florida.161 On the other side, Smartmatic
agrees Delaware courts use the Restatement’s “most significant relationship” test but disagrees
that Florida law applies.162 Smartmatic notes that only one of the three Plaintiffs have its
155
See id.156
Motion at 6 n.3.
157
See Del. Super. Ct. Civ. R. 12(c) (“If, on a motion for judgment on the pleadings, matters outside the pleadings
are presented and not excluded by the Court, the motion shall be treated as one for summary judgment.”). Here, the
Court is excluding the exhibits as matters outside the pleadings, and the Court is not treating the Motion as one for
summary judgment.
158
See Motion at 12 n.5.
159
See id.160
See id.161
Compl. ¶ 11.
162
Answering Br. at 17-18.
20
principal place of business in Florida, and under the Restatement, the Court should consider the
state where Newsmax committed the alleged acts of defamation.163 Smartmatic argues, at a
minimum, discovery is necessary to address which state’s law applies because it is unclear
whether Newsmax published the statements in Florida or its New York studio.164
When this Court conducts a choice of law analysis, it follows the “most significant
relationship” test set out in the Restatement.165 “When determining which state’s law applies to a
tort involving multistate defamation, Restatement [Section] 150 applies.”166 Section 150 states
in pertinent part:
(1) The rights and liabilities that arise from a defamatory matter . . . on broadcast
over . . . television . . . are determined by the local law of the state which, with
respect to the particular issue, has the most significant relationship to the occurrence
and the parties under the principles stated in [Restatement Section] 6.
(3) When a corporation . . . claims to have been defamed by an aggregate
communication, the state of most significant relationship will usually be the state
where the corporation . . . had its principal place of business at the time, if the matter
complained of was published in that state.167
“Aggregate communications” are “communications published simultaneously in two or
more states.”168 Comment f to Restatement Section 150 states:
Determination of which is the state of the applicable law is more difficult when the
defamer's act or acts of communication are done in a state other than that of
plaintiff's principal place of business and when the matter complained of is
published in the state of the plaintiff's principal place of business and in one or more
other states to which the plaintiff has a substantial relationship. In this last situation,
the local law of the state of the plaintiff's principal place of business will be applied
unless, with respect to the particular issue, some other state has a more significant
relationship to the occurrence and the parties.169
163
Id. at 18.
164
Id. at 18-19.
165
Schmidt v. Wash. Newspaper Publ’g Co., LLC, 2019 WL 4785560, at *2 (Del. Super. Sept. 30, 2019) (citing
Smith v. Delaware State Univ., 47 A.3d 472, 480 (Del. 2012)).
166
Id. (citation omitted).
167
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 150 (1971).
168
Schmidt, 2019 WL 4785560, at *2 (citing Aoki v. Benihana, Inc., 839 F. Supp. 2d 759, 765 (D. Del. 2012)).
169
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 150, cmt. f.
21
Comment f goes on:
Other contacts that the forum will consider in determining which is the state of most
significant relationship with respect to the particular issue include (a) the state or
states where the defendant did his act or acts of communication, such as assembling,
printing and distributing a magazine or book and (b) the state or states of the
defendant's domicile, incorporation or organization and principal place of
business.170
Smartmatic alleges Newsmax published defamatory statements on Greg Kelly Reports,
which is broadcast from New York.171 But Smartmatic argues discovery has not shown whether
other allegedly defamatory statements were published in Florida or New York.172 Smartmatic is
correct. Given the circumstances—not knowing where the Newsmax broadcasts occurred and
the fact that Florida is the principal place of business for only one of three Plaintiffs—the Court
finds that is not appropriate, at this time, to determine which state’s law applies.
Moreover, Newsmax concedes in its Reply that the Court “need not engage in a choice of
law analysis at this stage since Newsmax is grounding its arguments on neutral reportage on First
Amendment law.”173 Both parties also contend the outcomes here are the same regardless of
whether New York or Florida law applies, apart from Newsmax’s neutral reportage privilege.174
The parties have not adequately briefed the choice of law question. Therefore, the Court
should not decide choice of law until discovery reveals a more detailed record. Even if the Court
applies the law most favorable to Newsmax, which is Florida law, the Court holds that the
Motion still fails.
170
Id.
171
Answering Br. at 19.
172
Id.
173
Reply Br. at 26 n.10.
174
See Answering Br. at 19 (“On most defamation issues raised by Newsmax’s motion, Florida law and New York
law do not appear to conflict. But they do conflict when it comes to the so-called ‘neutral reporting’ privilege.”);
Reply Br. at 26 n.10 (noting that even if New York law applies, the “neutral reportage defense still applies since it is
grounded in First Amendment jurisprudence”).
22
B. SMARTMATIC IS A LIMITED PURPOSE PUBLIC FIGURE
Newsmax argues there is “no doubt” Smartmatic is a public figure.175 To support this
claim, Newsmax points to the following: Los Angeles County is the most populous voting
county in the United States; Smartmatic was selected to be part of the VSAP initiative;
Smartmatic has been involved in elections all around the world; Smartmatic technology has
processed more than five billion votes worldwide; and public discussion of election accuracy and
integrity is fundamental to a functioning democracy.176 Newsmax argues that, together,
Smartmatic invites attention and comment.177 On the other side, Smartmatic contends it is not a
public official nor a public figure. Smartmatic argues it has not achieved the “pervasive fame or
notoriety” necessary to be considered an all-purpose public figure. Moreover, Smartmatic argues
it is not a limited-purpose public figure because it did not (1) invite public attention, (2)
voluntarily inject itself into public controversy related to this litigation, (3) assume a position of
prominence in the controversy, or (4) maintain regular or continuing access to the media.178
Under Delaware law and United States Supreme Court precedent, a limited purpose
public figure is one who “voluntarily injects [itself] or is drawn into a particular public
controversy and thereby becomes a public figure for a limited range of issues.”179 Whether a
plaintiff is a public figure is a question of law.180 Under Florida law, courts employ a two-step
analysis to determine whether a plaintiff is a limited purpose public figure.181 Step one is
175
Motion at 23.
176
See id. at 23-25.
177
See id. at 25.
178
Answering Br. at 23 (citing Mitre Sports Int’l Ltd. v. Home Box Off., Inc., 22 F. Supp. 3d 240, 250-51 (S.D.N.Y.
2014)).
179
Gertz v. Robert Welch, Inc., 418 U.S. 323, 351 (1974); Page v. Oath Inc., 270 A.3d 833, 843 (Del. 2022) (citing
Gertz, 418 U.S. at 351).
180
Agar v. Judy, 151 A.3d 456, 477 (Del. Ch. 2017) (citing RESTATEMENT (SECOND) OF TORTS § 580A, cmt. c.
(1977)).
181
See Mile Marker, Inc. v. Petersen Publ’g, L.L.C., 811 So. 2d 841, 845 (Fla. Dist. Ct. App. 2002).
23
whether there is a “public controversy,” meaning whether a “reasonable person would have
expected persons beyond the immediate participants in the dispute to feel the impact of its
resolution.”182 Step two is “whether the plaintiff played a sufficiently central role in the instant
controversy to be considered a limited purpose public figure for the purposes of that
controversy.”183 Under New York law, to determine whether a plaintiff is a limited purpose
public figure, the defendant must show that the plaintiff:
(1) successfully invited public attention to [its] views in an effort to influence others
prior to the incident that is the subject of the litigation; (2) voluntarily injected
[itself] into a public controversy related to the subject of the litigation; (3) assumed
a position of prominence in the public controversy; and (4) maintained regular and
continuing access to the media.184
If a plaintiff is found to be a limited purpose public figure, the New York Times v.
Sullivan standard of actual malice will apply.185
Here, the “public controversy” is defined as the accuracy and integrity of the Election as
it relates to voting technology and software. Under Delaware law, Smartmatic is a limited
purpose public figure. Page v. Oath Inc. states a public figure is one who “voluntarily injects
himself or is drawn into a particular public controversy.”186 There is no doubt that Smartmatic
was at least “drawn into” the public controversy surrounding the accuracy and integrity of the
Election. The Complaint is filled with statements made by Newsmax and its guests about
Smartmatic. Moreover, Newsmax frequently discussed Smartmatic on its broadcasts for “over a
month.”187
182
Id. (citing Gertz, 418 U.S. at 323).
183
Id. at 846 (citing Gertz, 418 U.S. at 345).
184
Gottwald v. Sebert, 148 N.Y.S.3d 37, 44 (N.Y. App. Div. 2021) (citing Lerman v. Flynt Disrtib. Co., Inc., 745
F.2d 123, 136-37 (2d Cir. 1984)).
185
See Gertz, 418 U.S. at 352.
186
See Page, 270 A.3d at 843 (citing Gertz, 418 U.S. at 351).
187
See Compl. ¶¶ 115-72.
24
Under Florida law, Smartmatic is a limited purpose public figure. Step one—the “public
controversy” step— is satisfied. In Mile Marker, Inc. v. Petersen Publ’g, L.L.C., the Florida
District Court of Appeal found the plaintiff to be a limited purpose public figure.188 The plaintiff
manufactured hydraulic winches, which are employed by “off-road enthusiasts for hauling
stranded motor vehicles.”189 The defendant published an article about the plaintiff in its
magazine.190 The Florida court found the plaintiff to be a limited purpose public figure because
there was a “pre-existing public controversy in a segment of the population” regarding hydraulic
winches versus electric winches, and off-road magazine readers would be “impacted by the
resolution of the instant dispute.”191 Similarly here, there was a “pre-existing public controversy
in a segment of the population” regarding the accuracy and integrity of the Election, including its
voting software. Moreover, this segment of the population could be “impacted by the resolution”
of this litigation. Step two is met because Smartmatic “played a sufficiently central role” in this
instant controversy as part of the VSAP initiative in Los Angeles County, the largest voting
jurisdiction in the United States.192
Under New York law, it is less clear whether Smartmatic is a limited purpose public
figure under the four-prong test. Importantly, under New York law, “[a]n individual can become
a limited purpose public figure only through his own actions” and “may generally not be made a
public figure through the unilateral acts of another.”193
Under the first prong of the test, Smartmatic does not appear to have “invited public
attention . . . to influence others prior to” the controversy surrounding the Election’s voting
188
Mile Marker, Inc., 811 So. 2d at 845.
189
Id. at 843.
190
See id.191
See id. at 845.
192
See Compl. ¶¶ 46-49, 58.
193
Gottwald, 148 N.Y.S.3d at 44 (citations omitted).
25
technology and software.194 Smartmatic alleges in the Complaint that there was no controversy
in Los Angeles County.195 Moreover, Smartmatic states that it made no public comments
regarding the Election before the “disinformation campaign” began.196 Under the second prong,
it does not appear Smartmatic “voluntarily injected” itself into the Election-related controversies
because it made no public comments before its was attacked, and it played a role only in Los
Angeles County where there was no vote-counting controversy.197 To the Court, it seems more
likely that Smartmatic was involuntarily dragged into the controversy.
Under the third prong, Smartmatic likely assumed a position of prominence in the
controversy. Smartmatic played a prominent role in the Election because it was part of the
VSAP initiative and provided services to Los Angeles County, the largest voting jurisdiction in
the United States, even if that County was not contested.198 Prong four—maintaining access to
the media—is unclear. Newsmax makes only conclusory allegations for this prong, citing to
paragraphs in the Complaint that state the VSAP initiative provided Smartmatic with a unique
role in the largest voting jurisdiction in the United States.199 Newsmax has not carried its burden
under this four-prong test.
This disparity in outcome based on different states’ laws creates a serious issue. All the
caselaw from Delaware, Florida, and New York are derived from Gertz v. Robert Welch, Inc.,
which is the Supreme Court case that first identified the limited purpose public figure. Gertz
defines the limited purpose public figure as one who “voluntarily injects himself or is drawn into
a public controversy.”200 Here, Smartmatic was at least drawn into the public controversy
194
See id.
195
Compl. ¶ 59.
196
Id. ¶ 62.
197
Id. ¶¶ 59-62.
198
Id. ¶¶ 46-49, 58.
199
See Reply Br. at 10; Compl. ¶¶ 46, 52-53, 58.
200
See Gertz, 418 U.S. at 351 (emphasis added).
26
regarding the accuracy and integrity of the Election. The test seems overly broad. Given the
prevalence of electronic reporting (television, radio, internet, podcasts, social media), a person or
entity could be “drawn into” pretty much anything. However, Gertz is controlling as Supreme
Court precedent. Under the broad Gertz test, the Court finds that Smartmatic is a limited purpose
public figure.
C. ELEMENTS OF DEFAMATION
Newsmax contends “most” of the challenged statements from the Complaint do not
sufficiently refer to Smartmatic, and Smartmatic failed to allege several of the statement were
false.201 Smartmatic contests both arguments.202
To state a claim for defamation under New York law, a plaintiff must establish: “[1] a
false statement that tends to expose a person to public contempt, hatred, ridicule, aversion, or
disgrace, [2] published without privilege or authorization to a third party, [3] amounting to fault .
. . , and [4] either special harm or constituting defamation per se.”203 A statement constitutes
defamation per se if it “(1) charges the plaintiff with a serious crime; (2) tends to injure the
plaintiff in her or his trade, business or profession; (3) imputes to the plaintiff a loathsome
disease; or (4) imputes unchastity to a woman.”204
To state a claim for defamation under Florida law, a plaintiff must establish: “(1)
publication; (2) falsity; (3) actor must act with knowledge or reckless disregard as to the falsity
on the matter concerning a public [figure] . . . ; (4) actual damages; and (5) statement must be
201
See Motion at 13-20.
202
See Answering Br. at 55-68.
203
Kasavana v. Vela, 100 N.Y.S.3d 82, 85-86 (N.Y. App. Div. 2019) (citation omitted).
204
Id. at 86 (citation omitted).
27
defamatory.”205 “[W]hen the claim is defamation per se, liability itself creates a conclusive legal
presumption of loss or damage and is alone sufficient for a jury to consider punitive damages.”206
The Court finds that Newsmax fails to carry its burden to show the statements were not
concerning Smartmatic, and Smartmatic did not allege certain statements were false. Newsmax
seemingly wants the Court to make a hyper-literal reading of every statement.207 Newsmax
argues that because the name “Smartmatic” is not in several of the alleged defamatory
statements, these statements cannot refer to Smartmatic.208 The Court cannot engage in this type
of reading of the Complaint. In Newsmax’s own words, “[i]nstead of viewing the statements as
isolated phrases, they should be viewed in the full context of the broadcasts.”209
A reading of the statements published or republished by Newsmax shows the statements
in the Complaint refer to Smartmatic. First, the publications and republications often conflated
Smartmatic and Dominion as if they were one company and working together.210 Further,
Newsmax argues Smartmatic failed to allege defamatory statements regarding Smartmatic
International Holding B.V. and SGO Corporation Limited;211 however, the Complaint cites at
least one statement published by Newsmax that refers to “SGO Smartmatic.”212 Under Florida
law, defamation can be premised on statements that are not direct statements naming the
plaintiff. “[A] tortfeasor could juxtapose a series of facts in such a way that a specific person is
205
Jews For Jesus, Inc. v. Rapp, 997 So. 2d 1098, 1106 (Fla. 2008) (citing RESTATEMENT (SECOND) OF TORTS § 558
(1977)).
206
Lawnwood Med. Ctr., Inc. v. Sadow, 43 So. 3d 710, 729 (Fla. Dist. Ct. App. 2010) (citation omitted).
207
See Motion at 14 (arguing that most of the statements refer to the security and reliability of electronic voting
generally, and that there is not even a passing mention to Smartmatic in these statements).
208
See id.209
See id. at 55.
210
See, e.g., Compl. ¶¶ 89, 159, 220(f), 220(k).
211
See Motion at 14 n.6.
212
See Compl. ¶ 98.
28
identifiable even though that person’s name has not been used.”213 Newsmax fails to meet its
burden to show the statements in the Complaint fail to refer to Plaintiffs.
Newsmax next claims Smartmatic failed to allege a number of the statements were false.
However, throughout the Complaint, Smartmatic repeatedly alleges the statements were false.
Context is important, and it is not appropriate at this stage to cherry-pick statements that may or
may not be false, which is what Newsmax requests.
Therefore, the Court finds that Newsmax is not entitled to judgment as a matter of law as
it relates to the issues Newsmax contests with respect to Smartmatic’s alleged pleading
deficiencies.
D. ACTUAL MALICE
Actual malice applies because Smartmatic is a limited purpose public figure. Newsmax
contends the Complaint fails to allege facts to establish Newsmax acted with the requisite level
of fault, i.e., actual malice.214 Smartmatic disagrees and notes the Complaint alleged facts that
show Newsmax published defamatory statements with actual malice.215
“Actual malice” means a defendant made a defamatory statement “with knowledge that it
was false or with reckless disregard of whether it was false or not.”216 To satisfy the “reckless
disregard” standard, a plaintiff must show the defendant “in fact entertained serious doubts as to
the truth of [its] publication” or had “a ‘high degree of awareness of . . . probable falsity.’”217
Failure to investigate a statement’s truth or falsity, alone, is insufficient to establish actual
213
See Zimmerman v. Buttigieg, 521 F. Supp. 3d 1197, 1213 (M.D. Fla. 2021).
214
See Motion at 20.
215
See Answering Br. at 25.
216
N.Y. Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964); Phila. Newspapers, Inc. v. Hepps, 475 U.S. 767, 773
(1986).
217
St. Amant v. Thompson, 390 U.S. 727, 731 (1968) (citing Garrison v. State of Louisiana, 379 U.S. 64, 74 (1964)).
29
malice.218 However, the “purposeful avoidance of the truth” is different.219 If there is “some
direct evidence” that the statement “was probably false,” the factfinder “may infer that the
defendant ‘intended to avoid the truth.’”220 The plaintiff must establish actual malice by “clear
and convincing” evidence.221
The Court finds that Smartmatic pled facts from which there is a reasonable inference
that Newsmax acted with actual malice. Newsmax argues there “is nothing inherently
improbable about an allegation that a voting machine company has ties to a foreign nation or
leader, or of an error in the software that can (or did) switch votes.”222 Newsmax also argues it is
not inherently improbable that Smartmatic had ties to Hugo Chávez, or that Smartmatic would
have a relationship with Dominion.223 The Court disagrees and finds “there is at least a
reasonable inference of actual malice based on the alleged facts” when viewed in Smartmatic’s
favor.224
Smartmatic pled facts to show Newsmax’s “allegations [were] so inherently improbable
that only a reckless [person] would have put them in circulation,”225 and that Newsmax had
“obvious reasons to doubt the veracity of the” speakers and their reports.226 Smartmatic provides
statements in the Complaint that were published or republished by Newsmax as examples of
evidence of actual malice. For example, Smartmatic asserts: (i) Newsmax knowingly
disregarded publicly available information,227 (ii) Newsmax published and republished false and
218
See id. at 732-33.
219
Harte-Hanks Commc’ns, Inc. v. Connaughton, 491 U.S. 657, 692 (1989).
220
See US Dominion, Inc. v. Newsmax Media, Inc., 2022 WL 2208580, at *32 (Del. Super. June 16, 2022) (cleaned
up) (quoting Sweeney v. Prisoners’ Legal Servs. of N.Y., Inc., 647 N.E.2d 101, 104 (N.Y. 1995)).
221
Hepps, 475 U.S. at 773.
222
See Motion at 29.
223
See id. at 30.
224
See US Dominion, Inc., 2022 WL 2208580, at *33.
225
See St. Amant, 390 U.S. at 732.
226
See id.
227
See Compl. ¶¶ 251-348.
30
improbable claims that either had no support or were from unreliable sources,228 and (iii)
Newsmax promoted a false storyline to increase viewership and increase profits.229 “At the
pleading stage,” Smartmatic must “allege facts from which th[e] Court can draw a reasonable
inference of actual malice when viewed” in Smartmatic’s favor.230 Altogether, the Complaint
pleads facts from which the Court can reasonably infer Newsmax acted with actual malice.
As in US Dominion, Inc. v. Newsmax Media, Inc., where Newsmax argued that
Dominion’s allegations were mere conclusory statements,231 Newsmax again makes the same
argument here.232 The Court holds that this argument fails here as it did in US Dominion, Inc.
Namely, Newsmax either knew its statements regarding Smartmatic’s role in the Election fraud
narrative were false, or at least it had a high degree of awareness that they were probably false.
This is highlighted by the allegations in the Complaint that Newsmax possessed or was aware
countervailing evidence from the Department of Justice and election experts when Newsmax
published or republished Election fraud comments, which permits the reasonable inference that
Newsmax knew its allegations of fraud were probably false. Whether Smartmatic will be able to
prove actual malice by clear and convincing evidence is immaterial at this stage in the
proceedings. For now, it is reasonably conceivable Newsmax acted with actual malice.
E. NEUTRAL REPORTAGE DEFENSE
Newsmax maintains that the neutral reportage privilege applies to its potentially
defamatory conduct. Specifically, Newsmax argues the neutral reportage privilege is “mandated
by the Constitution.”233 Newsmax continues, “Newsmax both reported on, and provided a forum
228
See id. ¶¶ 349-96, 231-50.
229
See id. ¶¶ 412-16.
230
See US Dominion, Inc., 2022 WL 2208580, at *33.
231
See id.232
See Motion at 26.
233
Reply Br. at 26.
31
for discussion of, a news story of extraordinary public interest, presenting unprecedented
allegations without adopting them as true, so that the public could draw its own conclusions.”234
Smartmatic disagrees with Newsmax’s contentions. First, Smartmatic points out the neutral
reportage privilege is not mandated by the Constitution because the United States Supreme Court
“has never recognized it.”235 Moreover, Smartmatic argues, even if the neutral reportage
privilege is available in this case, it would not apply because Newsmax did not report on the
Election fraud claims neutrally.236
The Court cannot grant Newsmax’s Motion on the current record before it at this stage of
the proceedings. This is true even if the neutral reportage privilege applies as a defense, which is
not entirely clear as it depends on which state’s law applies to this case. The parties focus on the
neutral reportage privilege test set out by the Second Circuit in Edwards v. Nat’l Audubon Soc’y,
Inc.237 Edwards states that “when a responsible, prominent organization . . . makes serious
charges against a public figure, the First Amendment protects the accurate and disinterested
reporting of those charges, regardless of the reporter’s private views regarding their validity.”238
The reason for such press protection, in essence, is to ensure a “robust and unintimidated press,”
where a publisher believes “reasonably and in good faith” that its reporting “accurately conveys
the charges made.”239 However, the First Amendment is not unlimited.240 For instance, when a
“publisher who in fact espouses or concurs in the charges made by others, or who deliberately
234
Id.235
Answering Br. at 43 (citing Khawar v. Globe Int’l, Inc., 965 P.2d 696, 705 (Cal. 1998) (“The United States
Supreme Court has not stated whether it agrees with [the neutral reportage privilege set forth in Edwards v. Nat’l
Audubon Soc’y, Inc.], and it has never held that the First Amendment mandates a neutral reportage privilege.”)).
236
See id.237
556 F.2d 113 (2d Cir. 1977).
238
Id. at 120 (citation omitted).
239
See id.
240
See, e.g., Times Film Corp. v. City of Chicago, 365 U.S. 43, 47 (1961) (recognizing that the press’s right to be
free from even prior restraints is “not absolutely unlimited”).
32
distorts these statements to launch a personal attack of [its] own on a public figure,” then neutral
reportage does not apply.241
Here, Smartmatic’s well-pled allegations support the reasonable inference that
Newsmax’s reporting was neither accurate nor disinterested/unbiased. First, it is reasonably
conceivable Newsmax’s reporting was not accurate. Namely, on November 17, 2020, Dominion
sent an email to Newsmax’s booking producer, Alicia Hessee, which was titled, “SETTING THE
RECORD STRAIGHT.”242 This email provided information from Election experts that cut
against the narrative that the Election was stolen.243 Although sent by Dominion, it applies
equally to Smartmatic because the email discussed, inter alia, the lack of evidence of Election
fraud. Moreover, on December 11, 2020, Smartmatic sent Newsmax a retraction demand letter,
explaining why the statements regarding election fixing, rigging, and stealing were false.244
Despite being provided with this information, Newsmax did not mention it on any broadcast
during the relevant period following the Election, and Newsmax continued to cast Smartmatic as
a player in Election fraud.
Likewise, it is reasonably conceivable Newsmax’s reporting was not neutral or
dispassionate. The Complaint makes allegations that Newsmax’s reporting was not
dispassionate because Newsmax premised its coverage on the conclusion that the Election was
stolen,245 and supported and endorsed statements by guests regarding Smartmatic and the
Election.246 “By skewing the questioning and approving responses in a way that fit or promoted
a narrative in which [Smartmatic] committed election fraud,” it is reasonably conceivable that
241
Edwards, 556 F.2d at 120 (citation omitted).
242
Compl. ¶ 312, Ex. 160 (capitalization in original).
243
See id. ¶ 312.
244
Id. ¶ 314, Ex. 54.
245
See id. ¶ 151 (describing a tweet stating “How The Steal Was Done: Dominion, Smartmatic”).
246
See Answering Br. at 53 (citing Compl. ¶¶ 92-93, 96-98, 101-03, 119, 121, 128-31, 141-43, 154, 156-59, 165).
33
Newsmax was not dispassionate and did not report the issues surrounding Smartmatic truthfully
or dispassionately.247
As noted, the neutral reportage privilege applies only when the reporting is accurate and
disinterested. The Complaint pleads allegations that Newsmax’s reporting was neither accurate
nor disinterested. Newsmax contends Smartmatic “deceptively omitted” portions of
broadcasts,248 and Newsmax identified its guests and those guests’ roles.249 These arguments
may offer facts probative of accurate and disinterested reporting at a later stage of this
proceeding. For now, at this stage, the facts must be construed in the light most favorable to
Smartmatic.
Therefore, the neutral reportage privilege does not support judgment as a matter of law in
favor of Newsmax.
VI. CONCLUSION
Accordingly, for the foregoing reasons, Newsmax’s Motion is DENIED.
IT IS SO ORDERED.
February 3, 2023
Wilmington, Delaware
/s/ Eric M. Davis
Eric M. Davis, Judge
cc: File&ServeXpress
247
See US Dominion, Inc., 2022 WL 2208580, at *31.
248
See Motion at 56-59.
249
See id. at 59-61.
34