Magazine article Editor & Publisher

Food Lion Damages Won't Survive Appeals

Magazine article Editor & Publisher

Food Lion Damages Won't Survive Appeals

Article excerpt

Food Lion's $5.5 million verdict against ABC's PrimeTime Live will be slashed before the end of 1997. After all the appeals are exhausted, the chain will be left with token damages that won't cover its attorney fees.

Food Lion won because of how ABC shot some of its videotape. Two ABC employees lied on application forms to get jobs at Food Lion in order to secretly film the handling of food. Although Food Lion won its suit on the basis of fraud and trespass, this also is a case of media invasion of privacy and libel. On appeal, legal defenses from privacy and libel will reduce the damages.

Central to the verdict is the fraud that ABC committed to film practices at Food Lion. If the video gathered from the fraudulent employment had never been broadcast, Food Lion would have been limited to damages for the wages and training of two journalists who posed as store employees. For those injuries the 12 jurors awarded the chain $ 1,400 in compensatory damages. Those damages are legitimate and will survive any appeals.

The jury then levied $5.5 million in punitive damages. This was done despite jury instructions that ABC could not be punished for the actual broadcast of the 24-minute story which cost Food Lion over $1 billion in lost revenues and stock values. To fine ABC for the broadcast, which included a few minutes from 45 hours of surreptitious video, would punish the media for reporting truthful facts. The First Amendment protects truthful reporting.

The fraudulent employment was the critical component of the court case; but it was a secondary element in ABC's overall research of the story.

ABC also interviewed 70 current and former employees of Food Lion. Some of their allegations, which were aired in the broadcast, were just as damaging as the anecdotes on the secret tape. ATV story based on the 70 interviews without the secret tape would have been just as damaging to Food Lion but would have lacked the visual and viewer appeal.

ABC will aggressively appeal the jury verdict, first to the trial court judge and then to a three judge panel of the 4th Circuit Court of Appeals. If ABC loses, it will ask all 13 members of that court to hear the case. The loser before the 4th Circuit will petition the U.S. Supreme Court, which hears only 4% of the cases appealed to it. And the high court just might agree to hear the case.

ABC will argue that the $5.5 million in punitive damages violates the 14th Amendment, which prohibits grossly excessive damages. Nine months ago, the Supreme Court reversed $2 million in punitive damages given a Birmingham, Ala., man who had suffered $4,000 in actual damages because his new, $41,000 BMW sedan had been repainted by the manufacturer. The court said that punitive damages of 500 times the actual damages were excessive. Food Lion's punitive damages were 3,929 times its compensatory damages.

Before it ruled on punitive damages for BMW owners, the Supreme Court erected barriers to punitive damages in mass media cases. In 1974, the court ruled that Chicago attorney Elmer Gertz could not collect punitive damages in his libel suit unless he provided clear and convincing proof that the defamatory information was false. Food Lion has not demonstrated that ABC's broadcast was false. …

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