ABC not liable in taping of ‘telepsychics’

When ABC reporter Stacy Lescht posed as a psychic advisor and secretly videotaped conversations with coworkers as part of an investigation of a telephone psychic hotline, she did not violate federal wiretapping laws, according to a mid-August ruling form the U.S. Court of Appeals in Pasadena (9th Cir.).

The appellate court concluded that the psychic hotline employees who were secretly recorded failed to prove that ABC had an “illegal or tortious purpose” when it made the tape and affirmed the ruling of a federal trial court in Los Angeles that Lescht did not violate federal law.

As part of its “PrimeTime Live” news program in February 1993, ABC aired a segment about the psychic telemarketing industry and a particular business, Psychic Marketing Group (PMG). As part of the investigation of PMG, ABC had hired Stacy Lescht to work undercover as a “psychic telephone advisor.” In September 1992, while employed in PMG’s Los Angeles offices, she recorded her conversations with her “psychic advisor” coworkers, who were providing information to callers for a fee.

The investigative report regarding PMG’s practices included footage of Lescht’s conversations with coworkers. Two of the coworkers shown in the broadcast filed suit against ABC in Los Angeles Superior Court for invasion of privacy, and in June 1994, they received a jury verdict in their favor. Although the jury’s award initially was overturned by the California Court of Appeal in Los Angeles, the California Supreme Court in San Francisco in late June 1999 reversed the court of appeal and held in Sanders v. ABC that such taping of office conversations by a television reporter could be actionable as an invasion of privacy. (See NM&L, Summer 1999)

Meanwhile, in September 1994, more than a dozen other PMG employees filed suit against ABC based on the same conduct as Sanders. While Sanders involved a claim for invasion of privacy, the second suit was based on claims for eavesdropping under the federal wiretapping statute. The wiretapping statute states that it is unlawful for a person “to intercept a wire, oral, or electronic communication . . . for the purpose of committing any criminal or tortious act.”

ABC removed the case to federal District Court in Los Angeles, which dismissed the suit in February 1997 on the grounds that the federal wiretapping statute was not violated.

The employees subsequently appealed the dismissal of their federal wiretapping claim to the U.S. Court of Appeals in Pasadena (9th Cir.). The federal wiretapping statute states that it is unlawful for a person “to intercept a wire, oral, or electronic communication . . . for the purpose of committing any criminal or tortious act.”

The employees said that ABC was engaged in criminal and tortious acts while taping, because the taping of a phone conversation without the consent of all being taped would violate California criminal laws and the jury in the companion case filed by two other PMG employees found those employees’ privacy had been invaded. The employees argued the purpose of the hidden camera taping was to obtain information regarding consumer lists, how PMG did business, and other private information in violation of California trade secret laws. Finally, they argued that the purpose of the hidden camera taping was to defame the employees.

Arguing that the District Court’s dismissal of the case nullifies the federal wiretapping statute, the employees stressed that “What ABC refuses to admit is that there is no right to commit criminal and tortious conduct to gather the news.”

ABC argued that the employees failed to provide evidence that it had a criminal or tortious purpose in taping the conversations. Under the wiretap statute, a taping is lawful unless the tapes were made “for the purpose of committing a crime or tort,” it asserted. ABC explained that the legislative history of the law clearly showed the law was intended to permit journalists to tape such conversations so long as “the journalists did not make the tape for express purpose of committing a crime or tort, such as blackmail.”

Additionally, ABC distinguished the case filed by other PMG employees and argued that almost of all the testimony in that case was irrelevant because it involved “the purportedly defamatory nature of the broadcast, not the purpose of the taping itself.”

In mid-August 1999, a three-judge panel of the appellate court affirmed the lower court’s dismissal of the wiretapping claim. The court explained that the law applies where the taping itself is legal, but is done for an unlawful purpose, such as blackmail. However, where the purpose is “not illegal or tortious, but the means are,” the federal wiretapping statute does not apply.

The court concluded that the employees who were secretly recorded brought forth no convincing evidence that ABC had an illegal or tortious purpose in secretly videotaping them. (Sussman v. American Broadcasting Cos., Inc.)