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CORRECTED-UPDATE 1-Judge questions Fox News bid to shake $2.7 billion Smartmatic election suit

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(Corrects to say Lou Dobbs is a former Fox Business host, not a former Fox News host, in paragraph 6)

By Jan Wolfe

Aug 17 (Reuters) - A New York state judge on Tuesday signaled skepticism toward Fox Corp's bid to dismiss Smartmatic's $2.7 billion lawsuit that accused Fox News hosts and guests of making defamatory claims about the voting technology firm during the network's coverage of the 2020 U.S. presidential election.

During an oral argument held virtually, Judge David Cohen made comments sympathetic toward Smartmatic, which in February sued Fox https://www.reuters.com/article/us-smartmatic-lawsuit-fox-corp/smartmatic-sues-fox-news-giuliani-over-election-rigging-claims-idUSKBN2A42JO and two of Donald Trump's former lawyers, Sidney Powell and Rudy Giuliani, after the attorneys falsely accused it of rigging votes against the former president. Smartmatic is a London-headquartered company with a U.S. unit based in Florida.

Cohen did not say when he would rule on Fox's motion to dismiss https://www.reuters.com/article/us-smartmatic-lawsuit-fox-corp/fox-news-asks-for-smartmatic-lawsuit-over-election-rigging-claims-to-be-dismissed-idUSKBN2A90D2 the case.

The judge questioned whether there was any basis whatsoever for claims Powell and Giuliani made about Smartmatic during appearances on Fox News and Fox Business, like that the company was banned in Texas.

"How is that not defamatory?," the judge asked. "Did any evidence ever come to light that Smartmatic was banned in Texas?"

Cohen also asked whether former Fox Business host Lou Dobbs ever attempted to ascertain proof of this claim.

Paul Clement, a lawyer representing Fox Corp, responded that those allegations were made during an interview Dobbs conducted with Giuliani, and that Fox News had a right under the U.S. Constitution's protection for press freedom to report on newsworthy claims made by Trump's lawyers.

The judge noted that experts have rejected the conspiracy theory that the election was hacked, adding that even Fox News host Tucker Carlson had blasted Powell for failing to back the theory with evidence.

Cohen asked whether that should have made Fox News reconsider the accuracy of its reporting. Clement said that Fox was merely reporting on newsworthy claims made by Trump's legal teams, not endorsing the theories.

Smartmatic's technology was used in only one jurisdiction in the Nov. 3 election: Los Angeles County, where Trump lost to President Joe Biden.

Fox News, Giuliani and Powell were separately sued in March for defamation by another voting software company https://www.reuters.com/business/media-telecom/dominion-voting-systems-sues-fox-news-16-bln-over-election-claims-ap-2021-03-26, Dominion Voting Systems. Last week, a judge denied a bid by Powell and Giuliani to dismiss the claims against them in that case. A judge has not yet ruled on a request by Fox to dismiss Dominion's claims against the network.

Trump has made false claims that the election was stolen from him through widespread voting fraud.

(Reporting by Jan Wolfe in Washington; additional reporting by Helen Coster; editing by Noeleen Walder, Will Dunham and Jonathan Oatis)