MANHATTAN (CN) — Fox News can’t depose billionaire LinkedIn co-founder Reid Hoffman in their $2.7 billion defamation fight with voting technology company Smartmatic, a New York judge ruled Thursday.
Hoffman is backing Smartmatic’s defamation claim against the right-wing news network, which Smartmatic accuses of stoking conspiracy theories about its ties to a fictitious scheme to rig the 2020 presidential election for Joe Biden. The lengthy litigation is more than three years running.
Fox sought to depose Hoffman, a longtime funder of liberal causes, after his associate told The Washington Post that they met with Smartmatic CEO Antonio Mugica and talked about the company’s financials prior to investing $25 million into the case.
“The 2024 election is the biggest election in Earth’s history, and the market is massive, and Smartmatic was built to seize it, and they’ve spent the last four years dealing with a coordinated and orchestrated smear campaign,” Hoffman’s former investment adviser Dmitri Mehlhorn told the Post’s Jeremy Barr in 2024. “They could be a $400 million company right now if not for the slander and the smears.”
Melhorn’s quote shows that Smartmatic’s $2.7 billion damages figure is “grossly inflated,” Fox’s lawyer Winn Allen told a New York judge on Thursday. After all, a key issue in the case is what Smartmatic’s valuation was prior to the supposed defamation, Allen said.
Fox hoped depositions from both Hoffman and Mehlhorn could give them insight into their meeting with Mugica to give them financial insight to help with their defense. Allen said that Hoffman’s deposition was a higher priority, since “he’s the one who put his money on the line for this company.”
Hoffman’s lawyer John Quinn made the opposite claim. He argued that a Hoffman deposition would be “a dangerous road to go down” that leaves his client with a “real risk of burden and harassment.”
“Litigation funding is typically not discoverable at all,” Quinn said Thursday.
Ruling from the bench on Thursday, New York Supreme Court Justice David Cohen shot down Fox’s bid to depose Hoffman, but greenlit its request for a Mehlhorn deposition. The judge put stock into the fact that Mehlhorn was the one to speak with the media about the meeting with Smartmatic’s CEO, and ruled that he would be the most appropriate one to discuss that meeting — not Hoffman.
Mehlhorn’s deposition will be capped at two hours and limited to communications he and Hoffman had with Mugica prior to investing in the litigation.
Hoffman has funded other politically charged cases in the past, including E. Jean Carroll’s rape and defamation lawsuit against President Donald Trump. His efforts are widely seen as a “relatively new trend” in which wealthy benefactors invest in lawsuits for ideological reasons as well as financial ones, according to Jonathan Fetterly, partner at Bryan Cave Leighton Paisner.
“Sometimes you might want to invest in funding litigation, not because you’re necessarily interested in a return on investment or anything like that, but because you ideologically agree with the party,” Fetterly, who represents Courthouse News in its First Amendment litigation, said in an interview.
Hoffman isn’t the only billionaire to wield behind-the-scenes power in media defamation battles. Conservative venture capitalist Peter Thiel once sunk $10 million into a lawsuit filed by pro wrestler Hulk Hogan against Gawker Media, a gossip site that ran unflattering stories about Thiel and his inner circle. Hogan won a $140 million judgment against Gawker in 2016, which sent the company into bankruptcy.
If Fox had been allowed to depose Hoffman in the Smartmatic case, it could have potentially opened the door for future litigation funders to be dragged into the discovery process.
“To what extent is that funder subject to discovery? I think that’s an unanswered question and it’s kind of a new frontier,” Fetterly said. “And I think the judge’s ruling today is one brick in the wall that helps us start to define for future cases when they can or when they can’t.”
When reached for comment on Thursday, Fox acknowledged an unrelated criminal indictment of Smartmatic executives — a topic Cohen already ruled the network couldn’t broach in this case.
“The evidence shows that Smartmatic’s business and reputation were badly suffering long before any claims by President Trump’s lawyers on Fox News and that Smartmatic grossly inflated its damage claims to generate headlines and chill free speech,” the network said in a statement. “Now, in the aftermath of Smartmatic’s executives getting indicted for bribery charges, we are eager and ready to continue defending our press freedoms and look forward to deposing Dmitri Mehlhorn.”
Mehlhorn didn’t immediately respond to requests for comment.
Smartmatic’s case against Fox is one of several it filed against right-wing networks for knowingly spreading misinformation about the 2020 election. The Florida-based company previously settled with One America News Network and Newsmax over similar claims.
In 2023, Fox agreed to pay nearly $800 million to Dominion, another voting technology company, as part of a settlement over the same issue.