Amidst the many jaws dropping on Twitter Friday night in reaction to a Florida jury quickly awarding $115 million in damages to Hulk Hogan against Gawker Media (with more, punitive amounts to be added), NYU journalism professor Adam Penenberg asked: ‘Remember Food Lion vs. ABC?’
It’s an interesting question. Like Nick Denton, who promised that the appeals process will turn out much differently, Penenberg is pointing to a case where some big media-invasion zeroes were eventually washed away. In 1992, a couple of ABC News producers obtained jobs at Food Lion grocery stores in North and South Carolina by falsifying their job application and backgrounds, going on to report on their undercover findings via Prime Time Live. From a summary of the case that followed by Reporters Committee for Freedom of the Press:
In December 1996, a jury found ABC liable for fraud, trespass and disloyalty. The next month, the same jury awarded Food Lion $1,400 in compensatory damages and $5.5 million in punitive damages for fraud, along with $2 in nominal damages for breach of loyalty and trespass. But the U.S. District Court found the punitive award excessive and reduced it to $315,000.
Both ABC and Food Lion appealed the judgment to the U.S. Court of Appeals in Richmond, Va. (4th Cir.), which rejected the fraud claim, and the nearly $317,000 in damages that accompanied it, but upheld the $2 award for breach of loyalty and trespass. The Fourth Circuit in Food Lion, Inc. v. Capital Cities/ABC, Inc. rejected the fraud damages because it found that the grocery chain failed to prove it suffered any injury as a result of its reliance on the misrepresentations the producers made on their job applications.
Obviously, these are two very different cases. However, at the time, the original judgment rendered against ABC News was similarly shocking to media observers. As Politico Media’s Peter Sterne concluded last night, at the moment, the big money question for Gawker Media is whether the company can wriggle out of having to post a bond of up to $50 million during its appeals process.