## Facts

- ABC produced and aired a *PrimeTime Live* investigative segment, “Rush To Read,” about Pap smear testing accuracy and time pressures on cytotechnologists.
- ABC arranged a study using 623 Pap smear slides; four laboratories, including an Arizona lab operated by Medical Laboratory Management Consultants (Medical Lab), analyzed the slides.
- The broadcast reported that the Arizona lab failed to identify cervical cancer on several slides; the lab was not identified by name.
- ABC personnel entered Medical Lab using undercover identities, including one person wearing a hidden camera; they met with owner John Devaraj and toured parts of the facility.
- Devaraj discussed business matters with the purported visitors, did not request confidentiality, and gave a tour similar to one given to other visitors; he denied access to his personal office, which ABC did not enter.
- Only a brief portion of the broadcast concerned Medical Lab, and a short clip used hidden-camera footage from inside the lab.
- Plaintiffs sued in federal court (diversity), asserting intrusion upon seclusion (Devaraj), trespass (Medical Lab), tortious interference (Medical Lab), and punitive damages.
- The district court granted summary judgment to defendants on those claims, entered partial final judgment under Rule 54(b), and plaintiffs appealed.

## Issues

1. Whether covert recording and entry into a commercial laboratory during business discussions with strangers constituted intrusion upon seclusion under Arizona law (reasonable expectation of privacy and “highly offensive” intrusion).
2. Whether entry obtained by misrepresentation and accompanied by hidden-camera recording constituted actionable trespass causing compensable harm.
3. Whether a critical news broadcast on a matter of public concern could support tortious interference with contractual or prospective relations absent proof of materially false statements.
4. Whether punitive damages were available without proof of actual damages from an underlying tort.

## Decision

- The Ninth Circuit affirmed summary judgment for defendants on all appealed claims.
- Intrusion upon seclusion failed because Devaraj lacked an objectively reasonable expectation of privacy in the recorded interactions and the conduct was not highly offensive as a matter of law.
- Trespass failed because plaintiffs did not show the alleged entry was a substantial factor in causing legally cognizable damages distinct from publication-related harm.
- Tortious interference failed because plaintiffs did not produce evidence of actionable falsity in the broadcast, and First Amendment protections barred liability for the report on a public-health matter.
- Punitive damages were unavailable because plaintiffs did not establish an underlying tort with actual damages.

## Legal Principles

- Under Arizona law, intrusion upon seclusion requires an intentional intrusion into private affairs plus an intrusion that would be highly offensive to a reasonable person; business conversations with unknown visitors in a commercial setting may not support a reasonable expectation of privacy.
- Even if an entry could be characterized as trespass, liability requires proof that the trespass itself (not later publication) caused compensable damages and was a substantial factor in producing them.
- When alleged interference with business relations is effected through a news report on a matter of public concern, First Amendment limits require proof akin to defamation principles, including materially false statements, before tort liability may be imposed.
- Punitive damages generally require actual damages tied to an underlying, viable tort claim.

## Conclusion

The Ninth Circuit held that undercover newsgathering and limited hidden-camera recording in a commercial laboratory, followed by a broadcast addressing Pap smear testing accuracy, did not support intrusion, trespass, or interference liability on the record presented, and therefore could not support punitive damages.


Med. Lab'y Mgmt. Consultants v. Am. Broad. Cos., 306 F.3d 806 (9th Cir. 2002)