Merchant Immunity: the Shopkeeper’s Privilege

As I looked over a recent batch of opinions from the Western District of Virginia, one of them caught my eye for two reasons. First, I never imagined that a person might file a federal lawsuit against Golden Corral over an accusation of stealing chicken legs. We truly live in litigious times. Second, the case reminded me of the seldom-invoked “shopkeeper’s privilege” against defamation claims, otherwise known as merchant immunity. I don’t believe I’ve written about it before, so let’s dive in.

Here’s what happened in Leah Wynette Williams v. Lisa Annette Lipscomb, according to the opinion. It was Leah Williams’ daughter’s birthday, so to celebrate, they headed out to Golden Corral along with a sibling and Leah’s mother, Phyllis. They ordered the dinner buffet, for which they paid a fixed price. As they were eating, their server, Lisa Lipscomb, seemed to hover in the general vicinity of their table, sweeping the floor continuously. At one point, the server accused the family of attempting to smuggle food home for future consumption. She warned the family that the restaurant had security cameras, and went to get the manager, telling him that she had seen Phyllis putting chicken legs in her purse. The manager asked to look inside the purse. The family refused. Instead, Leah called 9-1-1, claiming to be “in fear for her family’s lives and safety.” They waited for an officer to arrive, had a brief discussion, and that was essentially the end of the matter. That is, until Leah sued the server, the manager, and the Golden Corral franchisee for defamation and various other claims.

The shopkeeper’s privilege was not discussed in the opinion, but the basic fact pattern is fairly common one and is the type of case where this privilege would often be invoked: Business accuses Customer of stealing; Customer proclaims innocence, then sues Business for defamation, false imprisonment, intentional infliction of emotional distress, and/or assault. Virginia has a law for this sort of thing. It’s often referred to as the merchant-immunity statute, and it essentially codifies the shopkeeper’s privilege. It states as follows:

A merchant, agent or employee of the merchant, who causes the arrest or detention of any person pursuant to the provisions of §§ 18.2-95, 18.2-96 or § 18.2-103, shall not be held civilly liable for unlawful detention, if such detention does not exceed one hour, slander, malicious prosecution, false imprisonment, false arrest, or assault and battery of the person so arrested or detained, whether such arrest or detention takes place on the premises of the merchant, or after close pursuit from such premises by such merchant, his agent or employee, provided that, in causing the arrest or detention of such person, the merchant, agent or employee of the merchant, had at the time of such arrest or detention probable cause to believe that the person had shoplifted or committed willful concealment of goods or merchandise. The activation of an electronic article surveillance device as a result of a person exiting the premises or an area within the premises of a merchant where an electronic article surveillance device is located shall constitute probable cause for the detention of such person by such merchant, his agent or employee, provided such person is detained only in a reasonable manner and only for such time as is necessary for an inquiry into the circumstances surrounding the activation of the device, and provided that clear and visible notice is posted at each exit and location within the premises where such a device is located indicating the presence of an antishoplifting or inventory control device. For purposes of this section, “electronic article surveillance device” means an electronic device designed and operated for the purpose of detecting the removal from the premises, or a protected area within such premises, of specially marked or tagged merchandise.

(See Va. Code § 8.01-226.9).

Probable cause is generally defined as “knowledge of such facts and circumstances to raise the belief in a reasonable mind, acting on those facts and circumstances, that the plaintiff is guilty of the crime of which he is suspected.” (See Stamathis v. Flying J, Inc., 389 F.3d 429, 437 (4th Cir. 2004)). When merchant immunity is invoked as a defense, the merchant/shopkeeper will have the burden of proof to establish probable cause. Whether probable cause exists depends on what a reasonable person would do or believe and is a question of fact for the jury to decide.

As a general rule, to accuse someone falsely of stealing is defamatory per se, because shoplifting and larceny are crimes involving moral turpitude. At the same time, however, courts recognize that in many of these chicken_leg-300x187“suspected shoplifter” cases, the communication claimed to be defamatory was uttered by a storekeeper, manager, or other store employee in the course of faithfully exercising a duty to protect the store’s merchandise from shoplifters. The merchant-immunity statute thus shields shopkeepers from civil liability for defamation and other torts, but only to the extent the privilege is properly exercised (i.e., the accusation was made in good faith, upon reasonable grounds, and did not go beyond the exigencies of the occasion.)

The shopkeeper’s privilege is designed to be very broad and to be applied liberally. (See Jury v. Giant of Md., Inc., 254 Va. 235 (1997)). According to the Fourth Circuit, the Virginia General Assembly, seeking to remedy the “multi-billion dollar epidemic of shoplifting and recognizing that police officers cannot be omnipresent,” deliberately chose to “enlarge the merchant’s ‘property rights’ while diminishing the shopper’s ‘personal rights.’” (See Jones v. Target Corp., 341 F. Supp. 2d 583, 587 (E.D. Va. 2004)).

Could Golden Corral have invoked the shopkeeper’s privilege? Well, I don’t know. The statute only applies where the store’s employee “causes the arrest or detention” of a person suspected of stealing. In the Golden Corral case, the accused chicken-leg thief was asked to leave but chose to stay until the police arrived. And it does not appear she was arrested. Had the restaurant manager physically detained the customer as she was trying to leave, the merchant-immunity statute would likely have come into play. At that point, the question would become whether the server had probable cause to believe that Phyllis had willfully concealed chicken legs in her purse.

More recently, the Eastern District of Virginia dealt with a case involving a similar fact pattern and found that the shopkeeper’s privilege did indeed apply. According to written submissions filed in Leander Ferebee, Sr. v. Ollie’s Bargain Outlet, Inc., Mr. Ferebee entered Ollie’s Bargain Outlet in Portsmouth wearing a black and white hoodie and a jacket. During his visit, another customer approached a customer-service supervisor and reported that she had witnessed “a male customer in a black and white hoodie, sunglasses and a black hat putting items in his pockets.” The customer suggested that the supervisor call the police. Instead, the supervisor located Mr. Ferebee and watched him. She noticed his pockets seemed to be bulging. She then entered a back room to observe him on the security monitors. She did not see him steal anything, but she again observed that his pockets appeared to be “stuffed.” She then went to the front of the store to see whether Mr. Ferebee was going to purchase anything. She watched him leave the building without making a purchase. At that point, she followed him out of the store, confronted him, and stated, “Have a good night, sir. …I have a customer who is claiming you stole and wants the cops called. I don’t know if you did, but, if so, take what you have and please don’t come back.” Mr. Ferebee responded, “Call the police, bitch. …You don’t know who you’re messing with. I’ll sue you. I want your name, bitch.”

The court entered summary judgment in favor of Ollie’s. After finding that the supervisor had not published an actionable statement (there was no evidence the statement was heard by anyone other than Mr. Ferebee himself, and no evidence the statement was in any way false), the court noted that even if the supervisor had published such a statement, Ollie’s was entitled to immunity under the merchant-immunity statute. The Court found that the supervisor had probable cause to believe that Mr. Ferebee took items from Ollie’s and that she acted as would an ordinarily prudent person under similar circumstances. Nothing more is required to gain the protection of the broad shopkeeper’s privilege.

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