Fox News on Thursday lost its motion to dismiss a $1.6 billion lawsuit brought against it by Dominion Voting Systems for the news network's television coverage of the 2020 US presidential election.
In a 52-page written ruling, a US judge said that the voting machine company had shown that Fox News had defamed it.
“At this stage, it is reasonably conceivable that Dominion has a claim for defamation per se," Delaware Superior Court Judge Eric Davis said in his ruling.
"Accordingly, Fox’s Motion should be denied.”
In a lawsuit filed earlier this year, Dominion Voting Systems alleged that executives at Fox Corpration - including members of the Murdoch family - exerted "direct control over Fox News’s programming decisions, including editorial control".
The voting machine company has also claimed that some Fox News employees had amplified false charges that Dominion had changed votes in the 2020 election through algorithms in its voting machines that had been created in Venezuela to rig elections for the late dictator Hugo Chavez.
On-air personalities brought on allies of former president Donald Trump who spread the claims, and then amplified those claims on Fox News’ social media platforms.
"Fox recklessly disregarded the truth. Indeed, Fox knew these statements about Dominion were lies," Dominion said in its lawsuit.
There is no evidence of widespread fraud in the 2020 election, which election officials across the US - including Mr Trump's attorney general, William Barr - confirmed.
In denying the motion to dismiss the lawsuit Mr Davis said that Dominion’s complaint “supports the reasonable inference that Fox either (i) knew its statements about Dominion’s role in election fraud were false or (ii) had a high degree of awareness that the statements were false".
Mr Davis said that “Fox possessed countervailing evidence of election fraud from the Department of Justice, election experts and Dominion at the time it had been making its statements. The fact that, despite this evidence, Fox continued to publish its allegations against Dominion, suggests Fox knew the allegations were probably false".
In a statement, a Fox News representative called the lawsuit "baseless" and an "all-out assault on the First Amendment".
The Associated Press contributed to this report