Medical Laboratory Management Consultants v. American Broadcasting Companies, Inc.
2002 WL 31104879, 306 F.3d 806 (2002)
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Rule of Law:
Under Arizona law, the tort of intrusion upon seclusion requires an intentional intrusion into a private place, conversation, or matter that is highly offensive to a reasonable person. A person has no objectively reasonable expectation of privacy in a workplace conversation with strangers about business matters, even if secretly recorded, when no private or personal information is disclosed.
Facts:
- Rhondi Charleston, a producer for American Broadcasting Companies (ABC), posed as a representative of a fictitious clinic and arranged for Medical Laboratory Management Consultants (Medical Lab) to process 623 pap smear slides.
- Another ABC producer, Robbie Gordon, falsely represented herself as a cytotechnologist interested in starting her own laboratory and arranged a meeting with John Devaraj, an owner of Medical Lab.
- Gordon, accompanied by Jeff Cooke (an undercover camera specialist with a hidden camera in his wig) and another ABC representative, met with Devaraj at Medical Lab's administrative offices.
- Devaraj invited the three ABC representatives into a conference room for a meeting where they discussed Medical Lab's business operations and the pap smear testing industry.
- Devaraj then gave the representatives a tour of the lab, during which he prevented them from entering his personal office but did not otherwise restrict their movement in the areas shown.
- Cooke, the camera specialist, secretly videotaped the entire meeting and tour without Devaraj's knowledge or consent.
- Throughout the conversation, Devaraj did not reveal any personal information about himself, nor did he request that any of the business-related matters discussed be kept confidential.
- ABC later aired a segment on its program 'PrimeTime Live' titled 'Rush to Read', which included 52 seconds of the covertly recorded footage.
Procedural Posture:
- Medical Lab and John Devaraj filed suit in Arizona superior court against American Broadcasting Companies (ABC) and others.
- The defendants removed the action to the U.S. District Court for the District of Arizona on the basis of diversity jurisdiction.
- The district court dismissed several of the initial claims.
- The plaintiffs filed a first amended complaint alleging, among other things, intrusion upon seclusion, trespass, and tortious interference.
- The defendants moved for summary judgment on all remaining claims.
- The district court granted the defendants' motion for summary judgment on the claims of intrusion upon seclusion, trespass, tortious interference, and punitive damages.
- The plaintiffs appealed the district court's grant of summary judgment to the U.S. Court of Appeals for the Ninth Circuit.
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Issue:
Does secretly videotaping a conversation about business matters in a semi-public workplace, using journalists posing as potential business partners, constitute the tort of intrusion upon seclusion under Arizona law?
Opinions:
Majority - Hug, Circuit Judge.
No, secretly videotaping a conversation about business matters in a semi-public workplace does not constitute intrusion upon seclusion because the plaintiff had no objectively reasonable expectation of privacy, and the intrusion was not highly offensive. To state a claim for intrusion upon seclusion, a plaintiff must prove (1) an intentional intrusion into a private place, conversation, or matter, and (2) in a manner highly offensive to a reasonable person. Devaraj had no objectively reasonable expectation of privacy. First, the location was a semi-public place of business where he willingly invited strangers. Second, the content of the conversation was purely business-related, not personal; the right of privacy is personal and does not extend to corporate or business affairs. Third, even if there is a 'limited privacy' interest against secret recording, Arizona's wiretap law allows any party to a conversation to record it, meaning one cannot reasonably expect it isn't being recorded. Furthermore, even if Arizona law were different, this limited privacy interest would only protect personal communications, not external business discussions with strangers. Even assuming an intrusion occurred, it was not highly offensive because it was de minimis and mitigated by the significant public interest in the news story about the accuracy of medical testing for cervical cancer. The trespass claim also fails because the alleged trespass was not the legal cause of Medical Lab's damages; the damages resulted from the broadcast's content about the lab's testing errors, not the 52-second video clip. Finally, the tortious interference claim fails because the broadcast addressed a matter of public concern, and Medical Lab failed to raise a triable issue of fact that the broadcast's statements were substantially false.
Analysis:
This decision significantly narrows the scope of the 'intrusion upon seclusion' tort in the context of undercover journalism, particularly within a business setting. By predicting that Arizona would follow a one-party consent rule for recordings and not recognize a broad 'limited privacy' interest, the court provides strong protection for newsgathering activities. The ruling establishes a critical distinction between private, personal affairs (which are protected) and professional, business-related interactions with strangers (which are generally not). This precedent makes it much more difficult for plaintiffs to sue for invasion of privacy when they are secretly recorded by journalists while conducting business, so long as the intrusion is not into a genuinely private space and the topic of conversation is not personal.
