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Constitutional – First Amendment – Undercover Reporting – Property Protection Act

To the extent several subsections of North Carolina’s Property Protection Act punish newsgathering activities, those subsections violate the First Amendment.

We affirm the district court’s determination that the subsections or the Property Protection Act (the Act) violate plaintiffs’ constitutional rights but reverse the district court’s striking of two subsections in their entirety.

People for the Ethical Treatment of Animals (PETA) wishes to conduct undercover animal-cruelty investigations and publicize what they uncover. But it faces a formidable obstacle: North Carolina’s Property Protection Act, passed to punish “[a]ny person who intentionally gains access to the nonpublic areas of another’s premises and engages in an act that exceeds the person’s authority to enter.”

The Act was passed in the aftermath of Food Lion, Inc. v. Cap. Cities/ABC Inc., 194 F.3d 505 (4th Cir. 1999), which allowed an employer to sue a double-agent employee for trespass and disloyalty. Soon thereafter, Dalton v. Camp, 353 N.C. 647 (2001), held that North Carolina did not have an employee-disloyalty cause of action.

Food Lion rejected all but nominal damages, reasoning that any damages flowing from the publication of the undercover investigation would violate the First Amendment. The Act’s “[e]xemplary damages” provision offers $5,000 per each day of violation as well as attorney’s fees in addition to any traditional compensatory damages “otherwise allowed.”  G.S. § 99A-2(c).

PETA takes issue with § 99A-2(b)(1)–(3) and (5), which define “an act that exceeds a person’s authority to enter” to encompass “(1) An employee . . . enter[ing] the nonpublic areas of an employer’s premises for a reason other than a bona fide intent of seeking or holding employment or doing business with the employer and thereafter without authorization captur[ing] or remov[ing] the employer’s data, paper, records, or any other documents and us[ing] the information to breach the person’s duty of loyalty to the employer.

“(2) An employee . . . enter[ing] the nonpublic areas of an employer’s premises for a reason other than a bona fide intent of seeking or holding employment or doing business with the employer and thereafter without authorization record[ing] images or sound occurring within an employer’s premises and us[ing] the information to breach the person’s duty of loyalty to the employer.

“(3) Knowingly or intentionally placing on the employer’s premises an unattended camera or electronic surveillance device and using that device to record images or data. . . .

“(5) [Committing a]n act that substantially interferes with the ownership or possession of real property.”

PETA wishes to speak to employees, record documents found in nonpublic (but not necessarily private) areas, and carry out surveillance. The Act prohibits all of these. Still, North Carolina insists the Act does not implicate the First Amendment at all. We are unpersuaded.

North Carolina first offers that undercover investigations in nonpublic areas, as a class, constitute unprotected speech. That is a dangerous proposition that would wipe the Constitution’s most treasured protections from large tranches of our daily lives. Fortunately, it has no basis in law.

While we agree that an employer could freely choose to deny entry to journalists who seek to secretly record its inner workings, it does not follow that a state can create new categories of unprotected speech to punish those journalists. Even granting that whole categories of speech can go unprotected, the challenged subsections would nonetheless implicate the First Amendment because they discriminate based on speaker and viewpoint.

Second, North Carolina insists the First Amendment does not confer a license to break the law. And because the Act merely codifies Food Lion’s protections against a “particular type of employment-related trespass,” PETA should not be allowed to wield the First Amendment to escape damages under the Act. However, Food Lion properly recognized that a state may not harness generally applicable laws to abridge speech without first ensuring the First Amendment would allow it.

Because we find no categorical reason to sidestep the First Amendment, we are left with the question of whether the speech PETA seeks to undertake is “speech” the First Amendment protects. We have no doubt that it is. Both on their face and in their practical operation, all four challenged provisions burden newsgathering and publishing activities.

If the First Amendment has any force, the “creation” of information demands as much protection as its “dissemination.” Scores of Supreme Court and circuit cases apply the First Amendment to safeguard the right to gather information as a predicate to speech.

Moreover, subsections (b)(1), (2), and (5) would permit a journalist to procure employment under false pretenses, copy employer documents, and record backstage footage—so long as she keeps those findings to herself. Yet a journalist who conducts herself in the exact same manner but speaks out against the employer would face heavy penalties. This regulatory mechanism, based on speech, triggers the First Amendment, and we proceed to inquire whether it can pass the appropriate level of scrutiny.

Subsection (b)(3) appears different, at first blush. It punishes the mere “placing” of an unattended camera “on the employer’s premises” without any reference to the content recorded. We might reasonably conclude that subsection (b)(3) applies to an undercover employee working on “employer’s premises” but not to an outside journalist invited to profile a company (who would more likely write a positive review). Nor a representative from a state enforcement agency (who would be much less likely to leak anything to the press). And such restrictions distinguishing among different speakers, allowing speech by some but not others are as repugnant to the First Amendment as are restrictions distinguishing among viewpoints.

All four challenged subsections must accordingly clear strict scrutiny. North Carolina has conceded that the Act cannot satisfy this highest bar. In any event, the provisions would fail even intermediate scrutiny both because the legislature produced no record evidence justifying its expansive restrictions on newsgathering speech and because their newsgathering prohibitions are not tailored to any substantial government interest.

We decline to enjoin any potential applications of the Act outside the newsgathering context that the parties have put before us. We thus reverse the district court’s invalidation of subsections (b)(2) and (3) in their entirety. We enjoin North Carolina from applying the Act to PETA’s newsgathering activities but sever and reserve all other applications for future case-by-case adjudication.

Affirmed in part and reversed in part.


(Rushing, J.) I must dissent because our precedent forecloses the conclusion that it offends the First Amendment to apply generally applicable tort law prohibiting trespass and breach of duty to PETA’s proposed conduct.

People for the Ethical Treatment of Animals, Inc. v. North Carolina Farm Bureau Federation, Inc. (Lawyers Weekly No. 001-029-23, 60 pp.) (Henry Floyd, S.J.) (Allison Jones Rushing, J., dissenting) No. 20-1776. Appealed from USDC at Greensboro, N.C. (Thomas Schroeder, C.J.) Nicholas Scott Brod, Joshua Stein, Ryan Park, Matthew Tulchin, Timothy Bishop, Brett Legner, John Hahn and Phillip Jacob Parker for appellants; David Samuel Muraskin, Daniel Bryson, Jeremy Williams, Gabriel Walters, Matthew Strugar, Cristina Stella and Kelsey Eberly for appellees; Clare Norins, Mario Martinez, Chris Lim, Bruce Brown, Katie Townsend and Lin Weeks for amici curiae. 4th Cir.

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