Beef Products, ABC Defamation Lawsuit Progressing Slowly

The $1.2 billion defamation lawsuit Beef Products, Inc. (BPI) filed last year against ABC News, Inc. is moving at a glacial pace.

ABC News, former U.S. Department of Agriculture (USDA) officials, and a fired BPI employee all have filed requests to dismiss the lawsuit.

But it's still undetermined where in South Dakota the case will be litigated. Although the complaint is currently before U.S. District Court Judge Karen Schreier, lawyers for plaintiffs have moved to return the case to state court. After that issue is determined, plaintiffs will file responses to the defendants' substantive motions, said Erik Connolly, a Chicago-based partner with the international law firm Winston & Strawn, LLP, which is representing BPI.

In September 2012, BPI the maker of lean finely textured beef (LFTB), which ABC allegedly referred to as "pink slime" 137 times over a month-long period sued ABC News and its journalists including World News anchor Diane Sawyer, contending the media giant misled consumers into believing its meat was unsafe.

The lawsuit claims a number of defamatory broadcasts and online reports shattered its sales, wreaked havoc on its business relationships and forced it to shutter processing facilities and lay off hundreds of workers. Kit Foshee, a former BPI employee, and Carl Custer and Gerald Zirnstein, two former employees with USDA's Food Safety Inspection Service, also were named as defendants.

ABC last year asked the federal court to dismiss the complaint, claiming BPI failed to state a claim for which relief can be granted. The media conglomerate further alleged two of the plaintiffs, BPI Technology, Inc. and Freezing Machines, Inc., were not "real parties in interest" and had no right to assert claims in the 257-page complaint.

Plaintiffs disagree. In court papers filed in November, they asserted BPI Technology and Freezing Machines "suffered reputational and financial damage" and will "benefit" if they succeed on their claims. This means the federal court cannot hear the lawsuit due to a "lack of complete diversity of citizenship" between the parties, plaintiffs' lawyers argued. 

BPI also must eventually respond to requests by Foshee, Custer and Zirnstein to dismiss the complaint against them.

ABC interviewed Foshee, a former quality assurance manager BPI reportedly fired more than a decade ago. His statements appeared in a broadcast and subsequent online versions of the ABC News report. In the ABC broadcast, he described BPI's LFTB as resembling "Play-Dough or just something that's pink and frozen. It's not it's not what the typical lay person would consider meat." He also was quoted as saying LFTB "will fill you up, but it's not going to do you any good."

Lawyers representing Foshee contend his "alleged statements cannot bear the meanings ascribed to them, are indisputably substantially true, or are non-actionable opinion."

Through their attorneys, Custer, a Maryland citizen, and Zirnstein, a Virginia citizen, also have asked the court to dismiss the claims against them. They contend there is no "personal jurisdiction" over them because they don't have sufficient ties to South Dakota. It was Zirnstein who reportedly described LFTB as "pink slime" more than 10 years ago in an email to Custer that The New York Times obtained and quoted in a 2009 article.

"There is nothing in the complaint or common sense to suggest that Zirnstein and Custer could have reasonably foreseen being [hauled] into court in South Dakota based on the use ABC allegedly made of their statements about finely-textured beef products," wrote attorney Vince Roche of Davenport, Evans, Hurwitz & Smith, L.L.P., one of the law firms representing Custer and Zirnstein.

According to BPI's website, its lean beef has been part of ground beef sold in this country since 1993. BPI makes LFTB by obtaining refrigerated beef trimmings from USDA-inspected beef packing plants, heating them up to post-slaughter temperature of 105 degrees, placing the trimming through centrifuges that separate the lean meat from the fat, and introducing a small amount of ammonia gas to kill potential pathogens, according to the process described in the lawsuit.

Annual revenues totaled $650 million at the beginning of 2012, according to the lawsuit. Then, beginning on March 7, 2012, ABC began a media campaign that BPI alleges "misled the public into believing that LFTB was not beef at all, but rather was an unhealthy 'pink slime' 'hidden' in ground beef as part of an 'economic fraud' masterminded by BPI."

BPI alleges ABC's vicious campaign against it 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.

In a 52-page motion filed on Oct. 31, ABC contends 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 ABC posit.

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

Some legal experts have maintained BPI faces challenges winning its case. Proving defamation, they say, is extremely difficult given the broad protections offered by the First Amendment and the higher standard of proof that applies in such cases.

But there is no sign BPI intends to relent on its lawsuit.

"We have to do this," Eldon Roth, who founded BPI with his wife Regina, told Reuters, which recently posted an-depth report on the legal battle. "We have no other choice."