Food Lion's roar has been muffled. The international grocery chain was chased out of court, tail between its legs, when most of its infamous lawsuit against Capital Cities/ABC Inc. was dismissed by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia.
In case anyone reading this has been asleep for nearly eight years, the saga began in 1992 when ABC, which had received tips that some Food Lion supermarkets were selling spoiled or unsanitary food, decided to conduct an investigation. ABC sent two of its "PrimeTime Live" producers to work undercover and, using hidden cameras, record the alleged unsafe practices.
The ABC producers submitted applications that misrepresented their educational and employment backgrounds. They were hired and, using tiny cameras and hidden microphones, recorded about 45 hours of footage. Their November 1992 broadcast included videotape appearing to show Food Lion employees repackaging and redating fish that had passed its expiration date.
After their story aired, Food Lion sued the network and the producers, focusing not on the broadcast's content, but on the methods used to gather it. Among other things, Food Lion asked for damages to compensate it for the loss of sales, "good will" and stock value, as well as punitive damages to censure ABC's conduct.
A jury in 1996 found all of the defendants liable for fraud, and the two ABC producers liable for breach of duty of loyalty to Food Lion, as well as for trespass. Its awards in excess of $5 million were drastically reduced by N. Carlton Tilley Jr., the chief U.S. District Court judge who presided over the trial in Winston-Salem, North Carolina.
After reviewing the case, the 4th Circuit's three-judge panel unanimously agreed October 20 that Tilley got it right when he ruled that Food Lion could not recover damages arising from the broadcast itself. The judges agreed, 2-1, that Food Lion's claim for damages for fraud should be thrown out, largely because of language in the state statutes. (To prove fraud in North Carolina, for instance, a plaintiff must show the defendant knowingly or recklessly misrepresented the facts, intended the plaintiff to rely on that, and injured the plaintiff as a result of that.)
However, the judges were unanimous in upholding the ruling that the producers had breached their duty of loyalty to Food Lion and had trespassed. They awarded a whopping $2 in damages.
The panel's analysis tracked prior court opinions, including the U.S. Supreme Court's 1988 decision in Hustler Magazine vs. Falwell. The opinions state that a plaintiff may not avoid the formidable constitutional hurdles erected by New York Times vs. Sullivan by filing a lawsuit that seeks damages for an injured reputation but styles the case under another legal theory.
This is good news and should help put to rest the use of common or garden-variety torts as a ploy to recover libel damages without having to prove falsity and actual malice, as public figure libel plaintiffs are required to do.
But the panel also concluded that the producers had, indeed, committed trespass because Food Lion's "consent" for them to be in the nonpublic areas of its stores was nullified when they breached their obligation to be loyal to their employer. The court rejected ABC's argument that general trespass laws should be viewed through a special First Amendment prism, which requires courts to cut some slack for journalists engaged in newsgathering. Holding the media accountable to general laws would have, at most, an incidental impact on newsgathering, the panel concluded. "We are convinced that the media can do its [sic] important job effectively without resort to the commission of run-of-the-mill torts," the judges wrote.
So is the Food Lion decision a cause for dancing in the streets? I don't think so.
One of the most pressing legal questions facing the news media today is whether they can violate general laws in the course of newsgathering. This is a critical question because potential plaintiffs, particularly corporate entities, have wised up to the fact that they don't have a prayer of recovering damages if they sue for libel, and probably not for invasion of privacy. But the so-called "trash torts" such as fraud, trespass and breach of loyalty offer a fertile field for litigators who want to strike back at the press.
It is very likely in most cases that the actual damages sustained will be nominal. And you could ask yourself whether most big companies would bother to sue if all they could get was $2.
Well, they can get a lot more than that. They can survive motions for summary judgment, and drag news organizations through protracted and expensive litigation.
If their object is to intimidate and to silence, especially smaller news organizations, they still have powerful weapons with which to do that.