DIS Walt Disney Co

Suit in South Dakota claims coverage by ABC News hurt meat-products maker

By Peg Brickley 

A judge in South Dakota has cleared the way to trial of a lawsuit claiming ABC News "pink slime" coverage caused $1.9 billion worth of damage to the business of Beef Products Inc., which makes the meat product tagged with the term.

Judge Cheryle Gering threw out defamation claims against anchor Diane Sawyer but left standing accusations against ABC News and multiple Emmy award-winning journalist, Jim Avila.

Judge Gering, in rejecting ABC's bid to have the case dismissed, said a jury could find the network was pursuing "a negative spin" on the story before conducting any research and that Mr. Avilla had an anti-meat-industry agenda.

"Looking at the evidence in a light most favorable to the plaintiffs, a jury could determine that there is clear and convincing evidence that ABC Broadcasting and Mr. Avila were reckless," the judge said, and that "they engaged in purposeful avoidance of the truth."

Five years in the making, the case threatens ABC News with punishing damages over its coverage of lean, finely textured beef, or LFTB, a component of about 70% of the ground beef found on supermarket shelves in 2012, when the stories ran.

Due to a South Dakota food-libel law that triples damages against those found to have knowingly lied about the safety of a food product, ABC News could be hit with as much as $6 billion in damages.

The network stands by its reporting.

"We are pleased that the Court dismissed all claims against Diane Sawyer, " ABC News said in a statement. "The Court hasn't ruled on the merits of the case against the other defendants, and we welcome the opportunity to defend the ABC News reports at trial and are confident that we will ultimately prevail." Decades of First Amendment law back ABC's defense -- its right to report truthfully on a newsworthy subject, what is in the nation's food supply, the company's lawyers say. Every broadcast said the meat product was safe.

Beef Products says it was forced to close three of its four plants and erase hundreds of jobs when consumers recoiled. It declined to provide current production figures.

The case, the latest media test of the boundaries of the First Amendment, will play out before a jury in Union County, S.D., where Beef Products is based, and where jobs were lost after the ABC News broadcasts.

Beef Products filed the case in state court in September 2012, but ABC News moved swiftly to move the lawsuit to federal court, which is generally considered a more comfortable forum for a national company caught up in a dispute with a local business. Trial strategists view state courts as a more sympathetic forum for locally-based businesses, while large corporations fare better in federal courts.

ABC asked the federal judge to throw out a case that it said "directly challenges the right of a national news organization, two USDA scientists, and a former BPI employee to explore matters of obvious public interest -- what is in the food we eat and how that food is labeled. The complaint also inhibits others who might address these subjects in a public forum."

A federal judge in June 2013 sent the case back to state court, telling ABC News to make its argument for dismissal in that forum.

A year ago, a Florida jury found Gawker Media Group guilty of invading the privacy of ex-wrestler Hulk Hogan by publishing a video of him having sex with the wife of a radio shock jock. Gawker's legal team for months had signaled they felt there was a strong possibility the St. Petersburg, Fla., jury would sympathize with Mr. Bollea, a hometown hero. Facing a $140 million verdict, Gawker filed for bankruptcy and sold the business to Univision Communications Inc.

"The American public is hostile to the media. Every news outfit should be very afraid of what a jury will do," said Mary-Rose Papandrea, a professor at the University of North Carolina School of Law.

Beef Products says ABC News whipped up the controversy about the meat product to boost ratings, inflaming consumers' fears and forcing the plant closures.

"This was fake news," Beef Products lawyer J. Erik Connolly told Judge Gering during arguments in January. "It's perfectly safe. It's perfectly nutritious. It was properly approved by the USDA. There was no news here. There was nothing to rush out and talk about. There was no news."

The term "pink slime" was in wide use after a 2009 New York Times story on the product, but it exploded on social media after the ABC News broadcasts. The network focused on the fact ground beef labels made no mention of LFTB, made from defatted beef trimmings in a process involving ammonium hydroxide.

"Why -- if it is just another additive, a way to put leaner beef in the burgers at a cheaper price, if it is no problem, if it's safe, all those things, why not just label it? Why not just put it on the package?" Mr. Avila asked a meat industry spokeswoman in an interview.

Mr. Avila, the judge said, was "rude, agitated and hostile" in his questioning of the Beef Products defender.

The BPI lawsuit claims ABC News use of the term "pink slime" amounted to a concerted disinformation against the company, violating South Dakota's food disparagement law. A dozen other states have passed similar laws following the 1989 Alar scare. Apple sales sank after a broadcast on the CBS newsmagazine program "60 Minutes" linked Alar to health risks, and the pesticide was banned from use on food.

Michael Roberts, director of the Resnick Program for Food Law and Policy at University of California Los Angeles School of Law, says Beef Products pioneered a system to produce a safe meat product that reduces the number of cattle that need to be slaughtered. But, he says, food disparagement lawsuits can "detract from that process" of open public discussion on food safety.

"If you shut down the scrutiny of news organizations, consumers are going to be very concerned and going to discuss among themselves on social media," said Mr. Roberts. "Would you rather have misinformation on social media?"

As the "pink slime" coverage played out, Beef Products endorsed a USDA move to allow voluntary labeling so consumers would know which packages of ground beef had LFTB and which didn't.

Beef Products also launched a counteroffensive, mustering governors of big meat-producing states and advisers to persuade others writing on the topic that ABC News got it wrong. Marion Nestle, the Paulette Goddard Professor of Nutrition, Food Studies, and Public Health at New York University, who wrote about Beef Products' problem in 2012, says she was confronted with "nothing less than a major effort to get me to agree that pink slime is safe, something that was never at issue," she told The Wall Street Journal. "Yes, it's safe, but that does not make it acceptable. What we like to eat has a great deal to do with cultural values, and the unfortunate name, 'pink slime,' made it culturally unacceptable."

Write to Peg Brickley at peg.brickley@wsj.com

(END) Dow Jones Newswires

March 15, 2017 02:47 ET (06:47 GMT)

Walt Disney (NYSE:DIS)
Historical Stock Chart
From Mar 2024 to Apr 2024

Walt Disney (NYSE:DIS)
Historical Stock Chart
From Apr 2023 to Apr 2024