## Facts

- Food Lion, a grocery chain, became the subject of an undercover investigation by ABC’s *PrimeTime Live* into alleged unsanitary meat-handling practices.
- Two ABC producers obtained jobs at Food Lion stores using false names and fabricated employment credentials.
- While employed, the producers secretly recorded extensive video in nonpublic work areas using hidden cameras.
- ABC broadcast the footage, asserting Food Lion employees engaged in unsafe or illegal practices in meat departments.
- Food Lion did not bring a defamation claim challenging the truth of the broadcast; it sued based on the defendants’ newsgathering conduct, asserting fraud, trespass, breach of the duty of loyalty, and a state unfair-trade-practices theory.
- A jury found liability for fraud (against ABC) and for trespass and breach of loyalty (against the undercover employees), awarding substantial damages on the fraud theory but only nominal damages on trespass and loyalty.
- The district court reduced punitive damages, and both sides appealed.

## Issues

1. Whether Food Lion could recover fraud damages based on misrepresentations used to obtain employment when the claimed losses stemmed from the broadcast’s publication effects.
2. Whether the undercover employees were liable for trespass and breach of the duty of loyalty, and whether Food Lion proved compensable (more than nominal) damages on those theories.
3. Whether the First Amendment altered application of generally applicable tort law to undercover newsgathering or affected the permissible measure of damages.

## Decision

- Reversed the fraud judgment and vacated associated compensatory and punitive damages because Food Lion did not prove injury proximately caused by reliance on the employment-application misrepresentations.
- Affirmed liability for trespass and breach of the duty of loyalty, but limited Food Lion to nominal damages due to lack of proof of compensable injury caused by the intrusion or disloyal employment conduct.
- Left Food Lion with a $2 total recovery.

## Legal Principles

- Fraud requires proof of a cognizable injury proximately caused by the plaintiff’s reliance on the defendant’s misrepresentation; reputational or sales losses attributable to publication effects do not satisfy that element when reliance caused only access.
- Generally applicable tort laws may be applied to journalists; the First Amendment does not create a general immunity for trespass, deception, or other non-speech torts committed during newsgathering.
- Consent to enter property may be limited in scope; entry for an authorized purpose does not necessarily authorize covert recording or access for an unauthorized objective, supporting trespass liability when the scope is exceeded.
- Plaintiffs may not use non-defamation tort theories to obtain defamation-type damages (lost goodwill, lost sales, market-value loss) without meeting the substantive constraints of defamation law.

## Conclusion

The court permitted liability for deceptive, intrusive newsgathering (trespass and employee disloyalty) but barred substantial recovery where the claimed harm was reputational and flowed from the broadcast, reversing fraud damages as an impermissible substitute for a defamation action.


Food Lion, Inc. v. Cap. Cities/ABC, Inc., 194 F.3d 505 (4th Cir. 1999)