The celebrated suit brought by the supermarket chain Food Lion against ABC has frequently been misrepresented as a grand constitutional battle, a conflict over whether the First Amendment lets reporters commit fraud. The recent federal appeals court decision throwing out almost all of the damages against ABC represents a narrowly and wisely drawn opinion that protects press freedoms without giving the news media an open license to violate the law.

For an episode of ABC's "PrimeTime Live," two undercover reporters with hidden cameras applied for jobs and began work at Food Lion supermarkets in North and South Carolina. The footage they produced was aired in 1992 as part of a story accusing the supermarket chain of redating out-of-date beef, bleaching meat to hide its odor and mixing old meat in with new. The day after the PrimeTime Live episode, Food Lion's stock price fell by more than 10 percent.

Food Lion promptly sued the network--but not for libel, which would be appropriate if the story were false. Instead, the chain blamed its losses on the false job applications the reporters filed and their breach of loyalty to their "employer." A jury originally awarded Food Lion more than $5 million in damages; the excessive figure was reduced by the district court to about $300,000. Yet in a 2-1 decision on Oct. 20, a panel of the Fourth Circuit Court of Appeals threw out all but $2 of the damages, affirming the principle that the press cannot be penalized for reporting stories that are true.

Food Lion had sued the reporters individually for trespass and disloyalty to employers, both valid grounds for damages under North and South Carolina laws, and the appeals court upheld the jury's awards of $1 on each of these counts. However, the court also ruled that Food Lion had not claimed any specific damages a result of the fraudulent applications filed by the reporters. Food Lion could identify no problems with the reporters' work; indeed, they both received positive reports from their supervisors, one of whom recommended that the reporter be rehired. Because North and South Carolina laws on fraud required such damages, the claim of fraud--and the $300,000 judgment attached to it--was denied.

More importantly, the court did not allow Food Lion to request compensation for the damages ABC caused to its reputation. The truth of the PrimeTime Live story was not contested before the court, regardless of the way in which that truth was exposed. As the district court ruled, it was Food Lion's food handling practices themselves, not the method by which they were recorded and published, which caused the chain's losses in sales and stock price. Some might find this distinction tenuous, but the First Amendment places strict requirements on libel suits that challenge a story's truth or falsehood. To tie the information presented in a story to the method in which the story was written, in the words of the appeals court, would represent an "end-run" around existing doctrines of press freedoms.

The appeals court's decision was a restricted one that does not seem likely to become a widely cited precedent. The court did not rule that reporting in the public interest puts reporters above the law, nor did it find that illegitimate tactics irreparably taint true information.

However, the Food Lion case represents at best a Pyrrhic victory for the American press. Public confidence in the news media, as evidenced by the multi-million-dollar jury verdict, is lower than any newspaper or television network would like to admit. Tactics that skirt or violate the law will buy no friends among a public already quick to identify bias in reporters and dismiss their reports. The press occupies too important a position in the democratic process to be complacent towards this ambient distrust; perceptions of a biased, unethical or irresponsible press will only encourage the public not to listen when the media reports something they don't want to hear.