ABC liable for fraud for report on Food Lion practices

NORTH CAROLINA–In late December, a federal jury in Greensboro found Capital Cities/ABC liable for fraud, trespass and disloyalty when network employees obtained jobs at several Food Lion grocery stores and used hidden cameras to shoot videotape for a “PrimeTime Live” program that showed alleged unsanitary food handling and unfair labor practices at the chain.

The jury awarded $1,402 in actual damages to Food Lion, which originally sought $2,432.35 to cover expenses incurred in paying wages and training two ABC producers. The jury will soon decide whether Food Lion is entitled to punitive damages, which could potentially be much higher.

In the November 1992 broadcast, ABC alleged that Food Lion’s meat department sold old meat that was washed with bleach to kill odor and cheese that had been gnawed by rats, and worked employees off the time clock. Food Lion claims that it lost $2.5 billion after sales and its stock price plummeted following the broadcast.

However, U.S. District Judge Carlton Tilley ruled that Food Lion could not ask for damages as a result of the broadcast.

Although Food Lion claims that ABC’s allegations were false, the chain did not challenge the accuracy of the broadcast in a libel suit. Instead, Food Lion argued that ABC used illegal newsgathering methods.

According to Food Lion, the two ABC producers fraudulently gained employment by lying on their job applications and giving false references, and then used hidden cameras to “stage” events in order to create footage that fit ABC’s version of Food Lion’s sanitary practices. (Food Lion, Inc. v. Capital Cities/ABC; Media Counsel: Wayne Jeffress, Washington)