Food Lion $315,000 award against ABC reduced to $2

But reporters acted illegally, court rules

October 21, 1999|By Lyle Denniston | Lyle Denniston,SUN NATIONAL STAFF

WASHINGTON — Clarification

An article in yesterday's editions of The Sun about an appeals court ruling that negated a $315,000 verdict against ABC-TV in favor of the Food Lion supermarket chain said Food Lion "could not prove" that ABC News' report of unsanitary food practices at Food Lion was false. Food Lion says it does have evidence that the accusations were false but could not offer such evidence in the case because of constitutional limitations.

WASHINGTON -- In one of the best-known cases of journalists using hidden cameras and deception to gather news, a federal appeals court wiped out a $315,000 verdict against ABC-TV yesterday but ruled that the network's reporters had acted illegally.

The 4th U.S. Circuit Court of Appeals, splitting 2-1, nullified all but $2 of a multifaceted jury verdict won by a major supermarket chain, Food Lion, for an ABC News broadcast that accused it of dirty food-handling practices. The broadcast was based mainly on film and information gathered by reporters posing as Food Lion employees.

Ever since the network broadcast its report on Food Lion on "Prime Time Live" in November 1992, its undercover tactics have drawn widespread criticism. The episode has generated years of intense debate within the news business about spy-camera journalism.

At one point, ABC-TV faced a verdict totaling $5,545,750, but a federal judge cut that to $315,000. That was the amount nullified yesterday by the appeals court.

But in a part of the ruling that might threaten undercover journalism, the appeals court decided, by a 3-0 vote, that two ABC-TV reporters had acted illegally when they posed as Food Lion workers to gain access to stores.

The 1997 jury verdict against the network "had been very worrisome" to the media, Gregg Leslie, acting executive director of the Reporters Committee for Freedom of the Press, said yesterday.

The appeals court decision was "a great relief," especially since the court "vindicated, for the most part, the First Amendment rights of the press," he said.

ABC News praised the ruling as "a victory for the American tradition of investigative journalism." All that was left of the verdict after the appeals court ruling, the network noted, was a $2 award to Food Lion.

Food Lion, a 1,120-store chain, said it was disappointed but added that the appeals court "did recognize that ABC's manipulative and illegal tactics caused unwarranted damage to our company and our employees."

It said its lawyers were studying the company's options. Those include asking the full appeals court to review the case, or appealing to the Supreme Court.

Food Lion, which could not prove that the program's accusations of unsanitary practices were false, sued ABC-TV for fraud and business deception under North Carolina and South Carolina laws.

In one part of yesterday's ruling that gained a unanimous vote of the three-judge panel, the appeals court ruled that Food Lion could not win any damages for harm to its reputation or loss of sales because it could not meet a standard imposed by the First Amendment's free press clause: proof that the broadcast was false and that ABC-TV knew that it was.

In upholding the finding that the two network reporters had acted illegally, the court found that they had trespassed on Food Lion property and acted disloyally to it as their temporary employer. It upheld a verdict of $2 for that misconduct, because Food Lion could not calculate what harm it suffered from those tactics.

More significant, the court refused to provide protection under the First Amendment for such trespasses and disloyalty by reporters working undercover as employees.

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