Judge Declines to Dismiss 'Pink Slime' Beef Lawsuit Against ABC News

YANKTON, S.D.—A South Dakota judge has mostly denied requests by ABC News and its journalists to dismiss claims filed against them in a $1.2 billion defamation lawsuit that was brought by Beef Products, Inc. (BPI).

The March 27, 2014 decision gives BPI and affiliated entities the green light to move forward in the 2012 lawsuit filed against ABC News, its journalists including Diane Sawyer and former officials with the U.S. Department of Agriculture (USDA).

"We are pleased with the ruling, which rejected nearly all of the Defendants' arguments. We look forward to starting discovery and ultimately presenting our case to a jury," said Erik Connolly, a Winston & Strawn lawyer representing BPI.

Cheryle Gering, a judge in the First Judicial Circuit Court, ruled that a South Dakota statute barred certain common law causes of action for disparagement. Otherwise, she denied the defendants' requests to toss out the various claims in the First Amendment case.

In her ruling on the motions to dismiss, Gering was required to view the pleadings in the light most favorable to the plaintiffs.

Legal experts have said BPI faces high hurdles in proving its case due to the strong protections of the First Amendment.

"We will defend our reporting vigorously on the merits," ABC News senior vice president Jeffrey Schneider said in a written statement to The Associated Press following the ruling.

BPI has accused ABC and former USDA officials of misleading consumers into believing its lean finely textured beef (LFTB) is unsafe, costing about 700 employees their jobs, resulting in the closure of three BPI facilities and pummeling sales.

Gering held the court properly had "personal jurisdiction" over two out-of-state defendants who worked for USDA's Food Safety and Inspection Service (FSIS), Gerald Zirnstein and Carl Custer. Another defendant remaining in the case is Kit Foshee, a former BPI employee.

ABC argued certain statements such as those relating to "pink slime" were not actionable because they were hyperbolic language and not actually statements of fact.

Gering wasn't persuaded.

"For example, the use of the term 'pink slime' with a food product can be reasonably interpreted as implying that that food product is not meat and is not fit to eat, which are objective facts which can be proven," the judge wrote. "The same holds true of the other alleged tortious statements that LFTB is a 'filler', is a 'substitute,' is made from 'waste' and scraps', is an 'adulterant', and was 'once only used in dog food and cooking oil.' A reasonable factfinder could find that each of these statements, as well as the others allegedly made by the Defendants, imply that LFTB is not beef and is not proper or fit to eat, which are objective facts which can be proven true or not true."

Among the other arguments the judge rejected:

·        that two plaintiffs affiliated with BPI, BPI Technology, Inc. and Freezing Machines, Inc., could not bring common law disparagement claims;

·        that various statements made by ABC News are true, barring a cause of action for defamation or disparagement;

·        that plaintiffs cannot bring both disparagement and defamation claims;

·        and that BPI could not bring a claim for tortious interference with a business relationship against ABC because of the impact it would have on news gathering operations. According to the lawsuit, grocery stores stopped selling BPI's beef in response to consumers' concerns following the negative news coverage.

"There is no basis for the ABC Defendants' assertion that the First Amendment bars a claim for tortious interference," Gering wrote.