Jury Says Abc Committed Fraud In Undercover Report

Opening a new line of legal attack against the media, a federal jury Friday ruled ABC committed fraud in sending reporters to go undercover as Food Lion employees for a “PrimeTime Live” expose on the supermarket chain.

The jury was told to return on Dec. 30 to decide whether to award Food Lion damages.

It was the second setback for the network in court this week. In Miami on Wednesday, a savings and loan executive who claimed “20/20” portrayed him as a crook won $10 million in a libel suit against ABC.

In the Food Lion case, the jury found that the network and four news producers committed fraud and trespass to get a story about allegedly unsanitary practices at the supermarket chain.

In a victory for ABC, U.S. District Carlton Tilley said Food Lion cannot seek damages for lost business attributable to the broadcast. However, Food Lion can seek compensatory and punitive damages from events prior to the broadcast.

Food Lion contended the broadcast cost it $1.7 billion to $2.5 billion in lost sales and stock value; it has not said how much it will seek in punitive damages.

The Food Lion case had put hidden-camera journalism on trial and was closely watched by companies and news organizations for taking up the question of whether journalists can pose as employees of a business to get in the door.

In a statement, ABC defended how it reported the story.

“We never engage in undercover activities lightly, but sometimes they are necessary to bring stories of real importance to the public’s attention. Our report on Food Lion was such a story,” the network said.

Noting that Food Lion mostly challenged the way in which the information was gathered, rather than the information itself, the network said, “Food Lion is asking the jury to punish the messenger without challenging the message.”

Food Lion, with more than 1,100 stores in 14 states, mostly in the South, had sued over a 1992 hidden-camera report that showed unsanitary conditions at the supermarket, including rat-gnawed cheese and spoiled chicken washed in bleach.

For the expose, two ABC producers got hired as Food Lion employees and used hidden cameras.

Food Lion denied the allegations of unsanitary practices and sued - not for libel, but for fraud and trespassing, alleging the two producers lied to get their jobs and spent company time snooping around instead of performing the duties for which they were being paid.