DATE: Saturday, August 30, 1997             TAG: 9708300379

SECTION: FRONT                   PAGE: A8   EDITION: FINAL 

SOURCE: ASSOCIATED PRESS 

DATELINE: RALEIGH                           LENGTH:   37 lines

FOOD LION AWARD FROM ABC IS CUT TO $315,000

Capital Cities-ABC Inc. will have to pay Food Lion only $315,000 rather than the $5.5 million jury award for a hidden-camera expose that accused the grocery chain of selling rat-gnawed cheese and rotting meat, a federal judge ruled Friday.

In a 34-page ruling, U.S. District Judge Carlton Tilley gave the company 14 days to accept the reduction or else he said he would order a retrial of the punitive damages phase of the trial.

In January, a jury awarded Food Lion $1,402 in compensatory damages for fraud, trespass and breach of loyalty for the report that aired Nov. 5, 1992, on ABC's ``PrimeTime Live.'' The money was for the cost of hiring and paying two ABC producers who got jobs in Food Lion stores in North Carolina and South Carolina and then wore spy cameras and hidden recorders.

The same jury awarded Food Lion $5.5 million in punitive damages because ABC representatives lied in order to videotape evidence.

``The ratio of overall punitive damage award assessed against Capital Cities-ABC Inc. to the compensatory damage award is approximately 2,857 to one. A ratio of 2,857 to one is certainly suspect,'' Tilley wrote.

Food Lion called the decision a victory, because ``the important principles involved in this case have been upheld by today's ruling.''

ABC defended its actions.

``By going undercover and telling a vital story about Food Lion's unsanitary food-handling practices, we were following a great tradition of American journalism,'' ABC said in a statement. ``We continue to stand behind the talented journalists who reported this important story.''

Tilley reduced the award to $50,000 from Capital Cities, $250,000 from American Broadcasting Co., and $7,500 each from former ``Prime Time Live'' executive producer Richard Kaplan and undercover unit producer Ira Rosen.

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