We'll turn to the case that has literally ripped a family apart. Parents are suing wal-mart after the store falsely accused them of taking pornographic pictures of their daughters that were fun,... See More
We'll turn to the case that has literally ripped a family apart. Parents are suing wal-mart after the store falsely accused them of taking pornographic pictures of their daughters that were fun, innocent bathtime photos. They wound up losing custody of their kids and say the mix-up has made their life a night their. Tanya rivero has that story. Reporter: Good morning. The daymaries are hoping their four-year legal with walmart will finally be resolved by an appeals court in the weeks ahead and get their lives back on track. Overnight walmart tells abc news its employees did the right thing when they reported anthony and lisa daymarie to the authorities over these and other bathtime photos of their three daughters fearing the images were pornographic. In a statement the retail giant says "we believe our associates acted appropriately in notifying authorities, who then decided whether to investigate." It was a nightmare. It was unbelievable. Reporter: That nightmare began in 2009 when they went to this walmart in peoria, arizona to develop family vacation photos. One is three of the girls laying down on a towel with their arms around each other and we thought it was so cute. Reporter: The three young girls, the baby just 18 months old at the time were taken away by child protective services. But a medical exam showed no signs of abuse. And a judge ruled the pictures armless. I think everybody agreed there was no such sex intent. Reporter:9 children came home over a month later. The damage was done. We went on to a central registry for sex offenders. 90% of the families out there in america have the same same photos. There's nothing to them. Reporter: They fought back suing walmart. But lost the first round when a judge ruled employees can't be held liable for reporting suspected child pornography. Now the couple is appealing to a higher court. Their lawyer telling abc news "walmart was negligent giving untrained clerks tremendous power over the lives of their customers." Reporter: As crazy as what it seeps what you consider to be the most beautiful, innocent pictures of your children can be perceived as something very perverted. Reporter: Now what this legal battle boils down to is this arizona law protecting employees who report suspected child abu in good faith. While the parents claim walmart failed to warn customers their photos would be judged by untrained employees no word yet on when the appeals court will have a final decision. Such a tricky case, thank you.
This transcript has been automatically generated and may not be 100% accurate.