LFTB defamation suit goes home

Jun 21, 2013

Federal Judge Karen Schreier recently ruled that the defamation lawsuit brought against ABC News by Beef Products Inc. (BPI)—producer of lean finely textured beef (LFTB)—will return to South Dakota’s Union County Circuit Court. This has been hailed as a victory for BPI as many legal experts have speculated a home-turf jury would be more sympathetic to BPI’s situation.

“We filed the case in state court because that was the proper jurisdiction,” said Erik Connolly, BPI’s lawyer. “The court’s decision confirmed that we were correct.”

This is the most recent action in the 10-month history of the case. In September 2012, BPI initiated the defamation suit against ABC, its owner, and six other individuals including anchor Diane Sawyer and correspondents Jim Avila and David Kerley.

BPI alleged defamation in ABC’s March 2012 coverage of its LFTB product, which characterized the product as unsafe and unhealthy and popularized the derogatory phrase “pink slime.” The coverage led to consumers rejecting the product en masse and ultimately forced the company to shut down three of its four plants and lay off hundreds of employees.

ABC had wanted the suit moved to U.S. District Court in Sioux Falls, alleging “diversity jurisdiction” and claiming the involved parties did not have residences in the same state, which would have necessitated the U.S. District Court. ABC argued that BPI Technology and Freezing Machines—incorporated in Delaware and named as plaintiffs alongside South Dakota-based BPI—were not real parties to the case. Judge Schreier ruled that BPI Technology is a “real party in interest” and, as ABC is also incorporated in Delaware, the overlap between ABC and BPI Technology made for no jurisdiction diversity.

It is important to note that this is just a venue ruling, and not a comment on the merits of the case.

“This is purely a decision on what court will hear the case,” an ABC spokesman told Rueters. “The court stated that ABC and the other defendants have the right to move to dismiss the case in the state court, and ABC intends to do just that.”

Following the ruling by Schreier, ABC lawyers have again moved that the case be dismissed. ABC has made similar motions in the past, claiming the suit is meritless and an attempt to curtail free speech. These motivations come from what appears to be a difference of semantic opinion regarding the phrase “pink slime.”

ABC called the phrase the sort of hyperbolic language “that courts routinely protect under the First Amendment.”

South Dakota is one of 13 states which have food disparagement laws. This could make the suit, if the Union County Circuit Court rules in BPI’s favor, cost ABC $1.2 billion in damages to BPI. — Kerry Halladay, WLJ Editor