THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, September 27, 1995 TAG: 9509270413
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY PAUL NOWELL, ASSOCIATED PRESS
DATELINE: GREENSBORO LENGTH: Medium: 86 lines
In 1992, ABC's ``PrimeTime Live'' ran a hidden-camera expose accusing Food Lion, then the country's fastest-growing supermarket chain and Wall Street's darling, of such unsanitary practices as selling rat-gnawed cheese and spoiled chicken that had been washed in bleach.
Food Lion denied the allegations and sued. But not for libel.
The company went after ABC for fraud, claiming among other things that 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.
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 news gathering, 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.
Madeleine Schachter, senior general counsel for Capital Cities-ABC in New York, did not return calls, and a Food Lion lawyer declined to comment.
A lawyer for the chain did address the libel issue in 1993: ``That's proven to be an almost impenetrable bulletproof vest forthe 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.
In its lawsuit, Food Lion alleges that ABC producers Susan Barnett and Lynne Neufer, who went by Lynne Neufer Litt at the time, misrepresented themselves in order to get jobs at Food Lion stores.
``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 PrimeTime Live.''
Smolla said such suits have become increasingly common over the past 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,''
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 news-gathering techniques,'' Smolla said.
Salisbury, N.C.-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 were its smallest in nearly two decades.
Its earnings are now on the rebound. This week, Food Lion reported third-quarter earnings of $41 million, up 12 percent from a year ago.
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.
In a statement issued the night of the broadcast, Smith attacked its accuracy.
``I know that we've been brought up to believe that because we saw it with out own eyes, it must be true, especially if a big network says so,'' he said. ``But with today's video magic, it's easy to concoct the news.''
The network's lawyer Randall Turk responded: ``ABC has nothing to fear from what's in those tapes, I guarantee you. This broadcast was not a hoax, no matter what they claim.''
KEYWORDS: FOOD LION LAWSUIT
by CNB