991071 ABC Food Lion Verdict ReversedOctober 26, 1999Richmond, VA - First Amendment advocates cheered the reversal of a jury verdict that found ABC committed fraud by sending undercover journalists to do a hidden-camera expose of a supermarket chain. “This lawsuit was an attempted end-run around the First Amendment,” Floyd Abrams, a New York media lawyer, said following the 4th U.S. Circuit Court of Appeals ruling. The appeals court threw out a $315,000 judgment in punitive damages against ABC over a 1992 “PrimeTime Live” story about the Food Lion chain -- an award that a judge had earlier reduced from $5.5 million. The ruling left only $2 of the jury's original award. Two ABC reporters used false resumes to get jobs at a Food Lion store, then secretly videotaped employees for a story on food-handling practices that accused the chain of selling rat-gnawed cheese and rotting meat. The report alleged that Food Lion employees ground out-of-date beef along with new beef, bleached rank meat to remove its odor and re-dated products not sold before their expiration date. While the grocery chain denied the accusations, it did not pursue claims of libel or slander. Instead, Food Lion claimed it was the victim of fraud for hiring of two bogus workers and won $1,402 in compensatory damages in addition to the punitive award. The jury award had stunned some because it appeared to open a new line of legal attack against news media and hidden-camera journalism that did not center on the accuracy of the story. “This case was sitting out there as a very dangerous precedent for the press,” said Gregg Leslie, acting executive director of the Reporters Committee for Freedom of the Press. The appeals court, in a 2-1 ruling, overturned the punitive and compensatory damages, saying the supermarket chain wasn't damaged by the reporters' deception -- though it upheld $1 in damages against each reporter for trespass and breaching their duty to be loyal to Food Lion. “This is a victory for the American tradition of investigative journalism. In the end, after Food Lion spent millions of dollars on legal fees and public relations offensives, the court ordered ABC News to pay only $2 in damages,” said David Westin, ABC News president. The appeals court also reversed the jury's finding that ABC violated the North Carolina Unfair and Deceptive Trade Practices Act, ruling that the law did not apply because the network and the Salisbury, N.C.-based supermarket chain were not in competition. “ABC was not competing with Food Lion, and it did not have any actual or potential business relationship with the grocery chain,” so the law could not be used in this case, said the opinion by Judge M. Blane Michael. “Presumably, ABC intended to benefit the consuming public by letting it know about Food Lion's food handling practices,” Michael added. Judge Diana G. Motz joined his opinion. Judge Paul V. Niemeyer disagreed with the majority, writing in a dissenting opinion that there was ample evidence to support the jury's finding of fraud. Food Lion said it was disappointed. “This is a complicated legal area, and our lawyers will review the court's decision and advise us of our options,” it said in a statement. Ken Paulson, executive director of the First Amendment Center at Vanderbilt University in Nashville, Tenn., said the ruling means plaintiffs who would never win a traditional libel suit “will think twice using alternative methods of striking back at news media that are reporting in the public interest.” Abrams, the media attorney, said: “The enduring message of this opinion is that the press will be protected against enormous judgments based on the content of articles unless the companies suing can prove that the articles weren't true.”
|
