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What’s at stake in Dominion, Smartmatic defamation cases

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Yahoo Finance Contributor Roger Parloff, joins Alexis Christoforous to discuss the defamation cases against Rudy Giuliani and Sidney Powell in regards to the 2020 Presidential election.

Video Transcript

ALEXIS CHRISTOFOUROS: Welcome back to "Yahoo Finance Live." Now for the latest on those outstanding defamation cases against Rudy Giuliani, attorney Sidney Powell, and Fox News. Two voting machine companies are suing, saying they were defamed by unsubstantiated claims that they contributed to widespread fraud in the 2020 presidential election.

Yahoo Finance's contributor Roger Parloff wrote about this. His article is currently on our site. And he joins me now. Roger, good to see you. This is definitely a good read. You actually call this the mother of all defamation cases. Tell us why you're saying that.

ROGER PARLOFF: Well, thank you, Alexis. Yeah, I don't know of another instance in which so many media outlets have amplified over such a sustained period of time such inherently implausible assertions that were so manifestly damaging to the reputations of identified businesses and individuals. And so we've already got four mammoth lawsuits, and more are apparently in the pipeline. And it seems like a unique situation.

ALEXIS CHRISTOFOUROS: Can you break this down for us? It's a little bit complicated because there are just so many moving parts. But what were or are the allegations that Giuliani and this attorney Powell made about these voting machine companies?

ROGER PARLOFF: Well, they're really pretty fantastical. The theory was that the election was stolen using software that was crafted in Venezuela approximately 16 years ago. And this allegedly had used algorithms that could weight votes. It would give Biden votes more weight than Trump votes.

It was supposed to have backdoors. You could have somebody in Germany or in Barcelona manipulating the election results. And then in addition, there was a piece of it that was strange, which was that the state officials who had allowed this into their states, this software, were allegedly in on the scam. And most of these officials, or a lot of them, were Republicans.

And the theory was that they were taking kickbacks or that they were using this for, quote, unquote, "election insurance," meaning that they themselves could be reassured of the election. It was, as she just said, the biggest crime in the nation's history.

ALEXIS CHRISTOFOUROS: These are really elaborate allegations here that you're laying out for us. I had a question, though, about--

ROGER PARLOFF: They are allegations. I'm not endorsing it.

ALEXIS CHRISTOFOUROS: They're not your allegations, to be clear, absolutely. But I can understand why Giuliani and the attorney Powell are being sued here, but also Fox News, which is interesting. I mean, Fox News had these people on as guests. Are these companies saying that the personalities that had these guests on their shows within Fox also contributed to the deformation?

ROGER PARLOFF: Yeah. And technically, as I'm sure you know, the media organizations are in a different situation from, say, internet platforms like Twitter or Facebook, which are essentially, because of Section 230 of the Communications Decency Act, they're immune to defamations by their users. So media organizations are in a different spot in terms of repeating defamations or even hosting them.

But in fairness, Fox News has some very strong arguments they've already made. The most obvious is that, look, these were the president's lawyers. This is what they were saying. This was unquestionably newsworthy, whether or not they eventually could substantiate their claims.

So that will be, I think, the crucial defense. And it's a pretty good one, except that over time, you begin to wonder as more and more authorities come out-- and actually, really, from the beginning authorities had come out and said, these accusations aren't plausible. They aren't even coherent technologically. And they're obviously reputation-damaging. So at some point, you would think that it's possible that even Fox would have to begin to shut these claims down.

ALEXIS CHRISTOFOUROS: Yeah, they've certainly tried, right? They asked for these--

ROGER PARLOFF: They did. Pretty much after they got the first demand letter from Smartmatic, I think, it seems like-- it looks like they stopped hosting these people.

ALEXIS CHRISTOFOUROS: Roger, real quick before we let you go, what happened at the Capitol, the riot at the Capitol on January 6, is that relevant to these cases at all?

ROGER PARLOFF: In a very narrow sense, no in terms of the damage done there did not damage Dominion, per se, or Smartmatic. But the lethality of these falsehoods is relevant because Dominion claims, for instance, that some of their employees had to go into hiding. At least one of their employees is bringing his own suit.

And actually, Giuliani, on the morning of the Capitol insurrection, at his speech at the Save America rally, was focused on Dominion. He was saying, we need to stop the counting so that we can inspect Dominion machines. And so it's going to be hard to keep that out of people's minds, jurors and even judges, who will remember what happened.

ALEXIS CHRISTOFOUROS: Yeah, Roger Parloff, thanks so much. It's a great article. And we're going to be watching as this thing unfolds.