A New York appeals court ruled Thursday that Fox Corporation must face Smartmatic’s mammoth defamation lawsuit over the airing of 2020 election lies on Fox News, dealing a blow to the Rupert Murdoch-controlled media giant.

A New York state appeals court rejected Fox Corp. bid to throw out a defamation lawsuit by Smartmatic over false claims that the voting technology company helped rig the 2020 presidential election. The ruling on Thursday allows the case to proceed toward trial.

Fox Corp , the parent of Fox News Network, failed to convince a New York state appeals court to dismiss a defamation claim in electronic voting systems company Smartmatic's $2.7 billion lawsuit over the network's 2020 post-election coverage.