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 ruled on Thursday that Fox Corporation (NASDAQ:FOX) (NASDAQ:FOXA), parent of Fox News Network, must face a $2.7 billion defamation lawsuit filed by Smartmatic—a UK based voting machinery company.

A court in New York has rejected a bid from Fox Corp. to toss a lawsuit from voting systems provider Smartmatic against Fox News. The New York appeals court on Thursday upheld a previous ruling denying Fox Corp.