Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, October 1, 1995 TAG: 9509290032
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: PAUL NOWELL ASSOCIATED PRESS
DATELINE: GREENSBORO, N.C. LENGTH: Long
Food Lion denied the allegations and sued. But not for libel.
The company went after ABC for fraud, claiming a the network staged some of the scenes in the 24-minute report and used deception to obtain jobs at Food Lion for the two ABC producers who went undercover.
The $30 million lawsuit threatens one of TV's most successful newsgathering techniques, although one that is generally shunned by print media.
Such lawsuits ``are designed to tap into what they hope is the public's distrust for hidden cameras and microphones ... even if it's being used to inform the public about some bad stuff,'' said Sandra Baron of the Libel Defense Resource Center in New York.
A loss for ABC ``would have a chilling effect on surreptitious newsgathering, including the use of hidden cameras and other operations,'' said law professor Rod Smolla, director of the Institute of Bill of Rights Law at the College of William and Mary in Williamsburg, Va.
Madeleine Schachter, senior general counsel for Capital Cities-ABC in New York, did not return calls, and a Food Lion lawyer declined to comment.
But a lawyer for the chain did address the libel issue in 1993: ``That's proven to be an almost impenetrable bulletproof vest for the media,'' W. Andrew Copenhaver said. ``But with ABC violating other laws, they've lost that bulletproof vest and that gives us a clear shot at them.''
Food Lion is suing for fraud, misrepresentation, conspiracy and unfair and deceptive trade practices. It claims ABC fraudulently gained employment for two producers, staged some of the events depicted, fraudulently edited its tapes and concealed unaired videotape that would have vindicated the supermarket chain. The case is months from trial.
The federal lawsuit says ABC producers Susan Barnett and Lynne Neufer, who went by Lynne Neufer Litt at the time, used concealed cameras and tape recorders to spy on Food Lion after creating false identities, references and documents for themselves and others.
``Litt believed it necessary to conceal the fact that she was an ABC employee from Food Lion - i.e., to lie and deceive Food Lion - in order to obtain a job with Food Lion and gain access to areas of Food Lion stores not open to the public,'' Food Lion says.
Likewise, the company says, ``Barnett obtained valuable employment from Food Lion under false pretenses. ... Her sole purpose in obtaining a job with Food Lion was to conduct a surreptitious investigation of Food Lion in order to obtain information and-or materials for use on the television show Prime Time Live.''
Smolla at William and Mary said such suits have become increasingly common the last two or three years.
``Libel suits are difficult to win ... because they put the plaintiff in the awkward position to have to show what was portrayed was false,'' Smolla said.
ABC's recent settlement of a $10 billion libel suit brought by tobacco giant Philip Morris Cos. heightens its interest in defending itself, and ``they also want to win because ABC is an aggressive user of undercover newsgathering techniques,'' Smolla said.
Salisbury-based Food Lion, which operates 1,048 stores in 14 states, most of them in the Southeast, saw its stock value and profits dive in the months after the report. Its 1993 profits of $3.9 million, were its smallest in nearly two decades.
Its earnings are on the rebound. Last month, Food Lion reported net income of $41 million, or 81/2 cents per share, on sales of $1.91 billion for its third quarter ended Sept. 9, compared with net income of $36.6 million, or 71/2 cents per share, on sales of $1.85 billion. Profits were up 12 percent on sales that were 3.5 percent greater.
Before the expose aired, Food Lion chief executive Tom Smith declined ABC's invitation to be interviewed.
Initially, Smith flatly denied any problems in the chain's stores and blamed the Food and Commercial Workers union, which had failed in its attempt to organize Food Lion's 60,000 workers.
Food Lion and the food workers union have been ensnarled in a protracted public debate over issues ranging from food handling to labor practices. Just last week, the union bought full-page newspaper ads in markets where the largest numbers of the company's workers are concentrated. The ads - in The Charlotte (N.C.) Observer; Columbia, S.C., State; The Virginian-Pilot in Norfolk; Salisbury (N.C.) Post; and Fredericksburg, Va., Free Lance-Star - presumably were to remind Food Lion's employees the chain is "permanently prohibited" from forcing them to work off the clock without pay by an order of the U.S. District Court.
In July, Food Lion filed a $100 million suit against the union, accusing it of violating federal racketeering laws in its campaign.
In a statement issued the night of the broadcast,
Smith attacked the accuracy of ABC's broadcast. He said: ``I know that we've been brought up to believe that because we saw it with our own eyes, it must be true, especially if a big network says so.
``But with today's video magic, it's easy to concoct the news,'' he said.
He focused on specific allegations about food-handling practices, including the claim that workers used bleach to remove the smell from outdated chicken, then repackaged it and put in back in the display case.
``The Clorox charge is ridiculous,'' Smith said.
In later interviews, Smith conceded some mistakes might have been made but insisted that the unsanitary practices were staged by ``PrimeTime Live'' with help from the union.
The exchanges have sharpened as the litigation has dragged on.
by CNB