In 1992, ABC's PrimeTime Live, the newsmagazine show hosted by Diane Sawyer and Sam Donaldson, broadcast a report that showed pictures of rancid meat and unsanitary practices at several Food Lion stores in North and South Carolina. The investigation was based on video shot by two undercover journalists who wore hidden cameras while briefly working as a deli clerk and meat wrapper for the chain. The reporters used fake credentials and references to get the jobs.
Food Lion never challenged the truth of the ABC story in court, instead suing the network and its producers for fraud and trespassing and asking the jury for anywhere from $52.5 million to $1.9 billion in punitive damages. The North Carolina-based company said its lost more than $1 billion when sales and stock price plunged after the broadcast.
The case has been closely watched by major news organizations, which worry that this represents a new way companies have to attack newsgathering, without filing a libel lawsuit.
"The verdict of the North Carolina jury should trouble every American--especially every journalist," ABC News President Roone Arledge said in a statement. "After finding that the use of those undercover techniques caused Food Lion only token damages, the jury has now awarded Food Lion punitive damages of 4,000 times that amount. That result is unconscionable."
However, the jury says it was not punishing the accuracy of the report just the means of obtaining information. "We weren't in there trying to handcuff the media...We would not have gotten the story if the media had not gone in," foreman Gregory Mack said. "But you don't have to make up information."
One media lawyer agreed, saying the verdict will force news crews to clean up their acts. "It will have a tremendous chilling effect on irresponsible journalism," said Jon Kotler, a media law professor at USC.
Needless to say, the verdict pleased Food Lion. "This case was not just about money. It was about right and wrong, and the jury's first verdict was just as important to us as this decision is," said Food Lion Chairman Tom Smith.
ABC said it consulted its legal department before starting the investigation and thought it was within the law. An ABC attorney said the network would appeal the award.
It was the second multimillion dollar verdict against ABC in two months. Last month, a federal jury in Miami awarded a savings and loan executive $10 million, deciding that ABC's 20/20 libeled him for falsely portraying him as a thief.