Fox Corp. CEO Lachlan Murdoch praised Fox News CEO Suzanne Scott on Thursday, even as the network faces a legal reckoning over lies it repeatedly broadcast following the 2020 presidential election.

"The position of the channel is very strong and doing very well," Murdoch said at an industry conference hosted by Morgan Stanley. "It's a credit to Suzanne Scott and all of her team there. They've done a tremendous job at running the business and building this business."

He cited the company's expansion into weather and on-demand news, and asserted Fox News attracted a diverse audience because its programming appealed to their values.

"They see Fox News as not just a news channel, but really a channel that speaks, to sort of, middle America and respects the values of middle America as a media business that is most relevant to them," he said.

"This is hard business to run," Murdoch added. "And I think, you know, Suzanne Scott has done a tremendous job."

Lawsuit raises questions about Suzanne Scott's future

Yet Scott's leadership of Fox News is at the heart of a $1.6 billion defamation lawsuit brought by a voting tech company named Dominion Voting Systems. The company accuses Fox of deliberately broadcasting lies that its technology changed votes for then-President Donald Trump to Joe Biden in a bid to lure back the Trump loyalists who make up much of its core audience. Many of them sought alternative right-wing networks after Fox correctly called the key state of Arizona for Biden before other news outlets.

Legal evidence made public in recent weeks show Scott upset about the loss of viewers, and discussing what to do about it with Murdoch and his father, Rupert Murdoch, the controlling owner.

In legal depositions, both Murdochs asserted that while they had regular, even daily, discussions with Scott about news coverage and would offer suggestions, she calls the shots at Fox News.

Emails and text messages from the weeks after that election suggest a more nuanced process.

For example, on Nov. 14, 2020, Lachlan Murdoch sent Scott a message of dismay over how Fox News reporters were covering a Trump rally.

"News guys have to be careful how they cover this rally," he wrote. "So far some of the side comments are slightly anti, and they shouldn't be. The narrative should be this is a huge celebration of the president. Etc"

Murdoch went on to call one reporter, Leland Vittert, "smug and obnoxious."

Scott said she agreed and that she was "calling now."

About 40 minutes later, Murdoch thanked her and observed that Vittert "seems to have calmed down."

Scott replied, "Yes we got them all in line!"

On Thursday, Murdoch was asked about the lawsuit by Ben Swinburne, who heads Morgan Stanley's U.S. media research.

"A news organization has an obligation — and it is an obligation — to report news fulsomely, wholesomely and without fear or favor," Murdoch said. "And that's what Fox News has always done, and that's what Fox News will always do."

The widespread attention to the case, he said, was not about the law or journalism, but politics.

"That's unfortunately more reflective of this sort of polarized society that we live in today," he said.

The case is set to go to trial in April in Delaware.