NEW YORK (AP) -- Fox News lost an attempt Tuesday to shut down a multibillion-dollar defamation lawsuit that accuses the network of spreading lies that a voting-technology company helped "steal" the 2020 election from then-U.S. President Donald Trump.
New York's Supreme Court Appellate Division, a mid-level appeals court, ruled against the network, which wanted judges to dismiss the $2.7 billion defamation case.
The company that brought the case, Smartmatic, has said it played a valid and small role in the election. It hailed the ruling as a step toward holding Fox News accountable for amplifying unsupported and damaging claims from Trump's lawyers.
Fox News cast the case as an attempt to chill journalism, expressing confidence the network ultimately would prevail.
Tuesday's decision means Smartmatic's suit continues against Fox News, hosts Maria Bartiromo and Jeanine Pirro, former host Lou Dobbs, and Trump attorney Rudy Giuliani. A claim against Trump lawyer Sidney Powell was dismissed earlier because she doesn't have ties to New York, where the case was filed.
The five-judge ruling concluded there were "significant allegations" that Giuliani and Powell defamed the company.
"The complaint alleges in detailed fashion that in their coverage and commentary, Fox News, Dobbs, and Bartiromo effectively endorsed and participated in the statements with reckless disregard for, or serious doubts about" whether there was any reliable evidence for them, five judges wrote in a unanimous opinion. Citing "the same reasoning," they also reinstated Smartmatic's claims against Pirro, which a lower court had thrown out.
Federal and state election officials, exhaustive reviews in battleground states and Trump's own attorney general found no widespread fraud that could have changed the outcome of the 2020 election. Nor did they uncover any credible evidence that the vote was tainted. Trump's allegations of fraud also were roundly rejected by dozens of courts, including by judges whom he had appointed.
The ruling comes as Fox News fights a separate, $1.6 billion defamation lawsuit from Denver-based Dominion Voting Systems, with a trial date in April. The network also is fighting lawsuit from a Venezuelan businessman who said he was wrongly accused of trying to corrupt the election.
Florida-based Smartmatic said that in the 2020 presidential election, its technology and software were used only in California's Los Angeles County. The Democratic bastion went, as expected, for Democratic nominee and now-President Joe Biden.
But Smartmatic says Fox News and the three hosts repeatedly allowed Trump's lawyers to falsely portray Smartmatic as a foreign company involved in a sprawling, multi-state operation to "flip" votes to Biden from the Republican incumbent.
During a series of post-Election Day appearances, Giuliani asserted that the company had been "formed in order to fix elections." Powell called it a "huge criminal conspiracy," and the two claimed that proof would be forthcoming.
After Smartmatic's lawyers demanded a retraction, Fox News aired an interview with an election technology expert who said there was no evidence that the company's technology had monkeyed with the election results. He refuted various claims that Giuliani and Powell made.
"Fox News, its news anchors and guests knowingly and falsely published lies," Smartmatic lawyer J. Erik Connolly said in a statement Tuesday. The company maintains that the network can't claim free speech protections for its conduct.
Fox News argues that it can, saying it was informing the public about newsworthy, if controversial, claims from an important figure about a matter of public concern.
"There is nothing more newsworthy than covering the president of the United States and his lawyers making allegations of voter fraud," the network said, adding that it was confident it would be vindicated. Fox News called the damages claim "outrageous" and "nothing more than a flagrant attempt to deter our journalists from doing their jobs."
A message seeking comment on Tuesday's ruling was sent to Giuliani's lawyers. They have said Giuliani's statements were protected by the First Amendment and other laws and principles.