CHICAGO, Illinois - September 17, 2009 - A Peoria couple is suing Walmart and the state after they were accused of sexual abuse for taking bathtime photos of their daughters, according to court papers.

Lisa and Anthony "A.J." Demaree's three young daughters were taken away by state Child Protective Services last fall when a Walmart employee found partially nude pictures of the girls on a camera memory stick taken to the store for processing, the lawsuit claims.

Walmart turned the photos over to police and the Demarees were not allowed to see their children for several days and did not regain custody for a month while the state investigated, according to their lawyer, Richard Treon.

Treon said the images in question were part of a group of 144 photographs taken mostly the family's vacation in San Diego. He said there were seven to eight bath- and playtime photos of the girls that showed a "portion or outline or genitalia."

At the time of the incident, the girls were 5, 4 and 1 1/2.

It was about "wanting to admire their (children's) beauty," Treon said. "There was nothing sexual about it."

Neither parent was charged with sexual abuse and they regained custody of their children, but the Demarees say the incident inflicted lasting harm.

In two separate lawsuits, the Demarees say the "slanderous claims" state officials made during the investigation caused them serious economic losses. They also claim to have since suffered "emotional stress, headaches, nightmares, a general feeling of malaise, shock to their nervous system, grief and depression."

"This is a parent's worst nightmare," Treon said. "This is a serious incursion on people's lives and privacy."

The Demarees are seeking an undetermined amount of monetary damages from both Walmart and the state and have requested a jury trial.

One lawsuit names the State of Arizona, Peoria and the state Attorney General's Office as defendants, claiming that employees from each party defamed them by telling friends, family members and coworkers that they had "sexually abused" their children by taking pornographic pictures of them.

Assistant Attorney General Jennifer Hunter is specifically accused of making slanderous remarks against the Demarees at a hearing where 35 of their friends and family members showed up to testify in support of the couple.

Hunter did not respond to a request for comment.

Spokesman Steve Meisner for the state Department of Economic Security, which oversees CPS, would not release any reports relating to the Demarees' case.

Meisner declined to comment about the lawsuit specifically until his agency received it, though he said CPS has "an obligation to conduct a reasonable investigation" when law enforcement has concerns about a case.

A second lawsuit, naming Walmart as the defendant, says the company is at fault for not telling Anthony Demaree that it had an "unsuitable print policy" and could decide to turn any photos over to law enforcement.

The complaint claims Walmart concealed its policy from Anthony Demaree, causing the couple severe damage.

Walmart representatives did not respond to a request for comment.