JUDGE CUTS PUNITIVE SUM IN FOOD LION SUIT VS. ABC

GREG GATTUSO

SALISBURY, N.C. -- Food Lion here claimed victory last week in its lawsuit against ABC even though the judge in the case reduced the amount of punitive damages the network must pay from $5.5 million to $315,000.

In a 34-page ruling, U.S. District Judge N. Carlton Tilley, of the Middle District of North Carolina, Greensboro, gave Food Lion until Friday to accept the reduced award or go through a retrial of the punitive damages phase of the case.

A spokeswoman for Food Lion told SN the chain had not decided whether to accept the judge's reduced award or go back to court. However, she said Food Lion would decide by the judge's deadline.

Earlier this year, a jury found ABC liable for fraud, trespassing and breach of the duty of loyalty when two news producers misrepresented themselves to gain employment at Food Lion in order to put together a hidden-camera expose of the chain's food-handling practices.

Using hidden cameras and microphones, the two employees recorded incidents of alleged unsanitary food-handling practices at Food Lion stores in North Carolina and South Carolina. The results of the investigation were broadcast in a 1992 edition of the ABC news magazine "Prime Time Live."

The jury awarded Food Lion $1,402 in compensatory damages -- the cost of hiring and paying the two employees -- and $5.5 million in punitive damages.

In his ruling, the judge said the ratio of the overall punitive damage award assessed against Capital Cities/ABC Inc. (former parent company of ABC) to the compensatory damage award -- $5.5 million to $1,402 -- is approximately 2,857 to 1 and most likely would be found unconstitutional in a review.

Judge Tilley awarded the following damages to Food Lion:

$250,000 from ABC, down from the jury award of $1.5 million.

$50,000 from Capital Cities/ABC Inc., down from $4 million awarded by the jury.

$7,500 from Richard Kaplan, former executive producer of "Prime Time Live," down from the jury award of $35,000.

$7,500 from Ira Rosen, the senior producer of "Prime Time Live," reduced from $10,750 awarded by the jury.

The judge refused Food Lion's request that ABC pay its legal fees. Food Lion estimated its legal fees at more than $1 million. "Food Lion is pleased that the company's claims have been vindicated and the important principles involved in this case have been upheld by [the] ruling," said a Food Lion statement.

ABC News issued a statement saying it was gratified that the judge "saw fit to drastically reduce what was a highly inappropriate award of punitive damages. Nevertheless, ABC News believes the imposition of any punitive damages under the facts of this case is wrong.

"We continue to stand behind the talented journalists who reported this important story."

SN is a unit of ABC's Fairchild Publications, New York. ABC is now part of Walt Disney Co.