By Jonathan Stempel
NEW YORK (Reuters) -A New York state judge on Tuesday said Smartmatic can pursue its $2.7 billion defamation lawsuit claiming that Fox News Network, Rudolph Giuliani and others falsely accused the electronic voting systems maker of helping rig the 2020 U.S. presidential election to favor Democrat Joe Biden.
Justice David Cohen of New York State Supreme Court in Manhattan rejected bids by Rupert Murdoch's Fox Corp, anchor Maria Bartiromo and former anchor Lou Dobbs to dismiss Smartmatic's claims against them.
Cohen also said Smartmatic can pursue some claims against Giuliani, who worked as a lawyer for former Republican President Donald Trump. He dismissed all claims against Fox host Jeanine Pirro and former Trump lawyer Sidney Powell.
Smartmatic accused the defendants of turning it into a "villain" by fabricating a story that its technology helped Biden steal the 2020 election from Trump.
The Florida-based company said Fox News did this to boost ratings, cater to Trump supporters, and avoid losing viewers to smaller, right-wing networks Newsmax and One America News.
Smartmatic said it provided technology for the election only to Los Angeles County, which Biden won.
Without ruling on the merits, Cohen found a "substantial basis" for the claim that Fox News "turned a blind eye to a litany of outrageous claims about [Smartmatic], unprecedented in the history of American elections, so inherently improbable that it evinced a reckless disregard for the truth."
In a 61-page decision, Cohen said Giuliani's "barrage" of criticism, including that Smartmatic fixed elections in Venezuela and was up to its "old tricks" on election night, justified letting some claims against him proceed.
But the judge said an alleged misstatement by Pirro was not defamatory, and he lacked jurisdiction over claims against Powell.
Another company, Dominion Voting Systems, is pursuing similar litigation. A Delaware judge refused in December to dismiss its $1.6 billion lawsuit against Fox News.
In a statement on behalf of the Fox News defendants, the network said it planned to appeal the Smartmatic decision, calling the company's claims "baseless."
Fox News also said it planned to file a counterclaim for fees and costs "to prevent the full-blown assault on the First Amendment which stands in stark contrast to the highest tradition of American journalism."
Powell's lawyer Howard Kleinhendler said his client was "confident that any subsequent litigation by Smartmatic or others will reach the same result." Lawyers for Giuliani did not immediately respond to requests for comment.
Smartmatic's lawyer J. Erik Connolly said Fox News caused "catastrophic damage" to his client's business and reputation. "This lawsuit will help to undo that damage," he said.
The case is Smartmatic USA Corp et al v Fox Corp et al, New York State Supreme Court, New York County, No. 151136/2021.