ABC News to Defend 'Pink Slime' Lawsuit in State Court

SIOUX FALLS, S.D.A $1.2 billion "pink slime" defamation lawsuit that was filed last year against ABC News, Inc. and its journalists including Diane Sawyer will be litigated in state court.

Nine months ago, after being sued by Beef Products, Inc., BPI Technology, Inc. and Freezing Machines, Inc., the defendants moved the case to federal court.

Karen Schreier, a U.S. District Judge, on Wednesday ruled BPI Technology had the right to assert its defamation claims and was a "real party in interest".  

Her ruling deprived the federal court of authority to hear the case because it lacked what's known as diversity jurisdiction.

The case has been sent back to the Circuit Court of Union County, S.D.

Schreier said ABC's requestthat she determine the merits of the case in ruling that plaintiff is not a real party in interestwas misguided.

"Put simply, defendants are suggesting that the court make a determination about the merits of BPI Tech's claim before even deciding whether it has the authority to make such a determination. This is putting the cart before the horse," she wrote.

In September 2012, Beef Products, Inc. (BPI) sued ABC News and its journalists, contending the network misled consumers into believing its lean finely textured beef (LFTB) was unsafe.

The lawsuit claims a number of defamatory broadcasts and online reports cost about 700 employees their jobs, resulted in the closure of three facilities and reduced weekly sales from roughly five million pounds of LFTB to around two million pounds. Several news reports referenced the term "pink slime" in regards to BPI's meat.

ABC News last year asked Schreier to throw out the entire case. In her order Wednesday, the judge denied other motions pending without prejudice, meaning ABC can request dismissal of the case in state court.

In a 52-page motion filed on Oct. 31, 2012, ABC contended plaintiffs' 27 counts must be dismissed as a matter of law. Among its arguments: The term "pink slime" is "inherently a subjective assessment that it does not give rise to a legal claim." That's because it cannot be proven to be a false statement and therefore is protected language, lawyers for the broadcast network posited.

"Pink slime is exactly the sort of 'loose, figurative, or hyperbolic language' that courts recognize demands protection under the First Amendment," they wrote.

Lawyers who practice media law have said BPI faces high hurdles proving its case given the broad protections offered by the First Amendment and higher standard of proof that applies in such cases.

Other defendants in the lawsuit include: American Broadcasting Companies, Inc.; ABC News journalists Jim Avila and David Kerley; Kit Foshee, a former BPI employee; and Carl Custer and Gerald Zirnstein, two former employees with the United States Department of Agriculture's Food Safety Inspection Service.