ABC News Settles 'Pink Slime' Food-Libel Lawsuit -- Update

By Patrick Fitzgerald and Jacob Gershman Features Dow Jones Newswires

ABC News has reached a settlement with the maker of a processed-meat product that critics dubbed "pink slime," bringing an end to a defamation lawsuit that threatened the network with billions of dollars in damages.

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The settlement, the terms of which weren't announced, comes about halfway through a jury trial that was expected to last about two months and brings to a close a high-profile legal test of so-called food-libel laws intended to shield the food-production industry from bogus food-safety scares.

Beef Products Inc. sued ABC News, anchor Diane Sawyer and reporter Jim Avila in 2012 for $1.9 billion, over a series of stories about its lean, finely textured beef product -- or LFTB, what critics dubbed "pink slime" -- claiming it was the victim of a journalistic hit job that harmed its business.

A judge dismissed the claims against Ms. Sawyer before the start of the jury trial, which began earlier this month in South Dakota.

Due to a South Dakota food-libel law that provides for triple damages against those found to have knowingly lied about the safety of a food product, ABC News was facing, potentially, $6 billion in damages.

Beef Products, a family-owned South Dakota meat processor, said in a Wednesday statement the settlement validated that lean, finely textured beef, made from defatted beef trimmings in a process involving ammonium hydroxide, was safe.

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"While this has not been an easy road to travel, it was necessary to begin rectifying the harm we suffered as a result of what we believed to be biased and baseless reporting in 2012," Beef Products said. "Through this process, we have again established what we all know to be true about lean finely textured beef: it is beef, and is safe, wholesome, and nutritious."

ABC, a unit of Walt Disney Co., denied that it had reported anything about the beef that it knew to be a lie and had contended Beef Products was trying to punish it for making reasonable editorial judgments.

"Throughout this case, we have maintained that our reports accurately presented the facts and views of knowledgeable people about this product, " ABC said Wednesday in a written statement. "Although we have concluded that continued litigation of this case is not in the Company's interests, we remain committed to the vigorous pursuit of truth and the consumer's right to know about the products they purchase."

The case went to trial at a time when major media outlets are under more public scrutiny and contending with what polls show to be declining trust of mainstream journalism. Beef Products, during the litigation, decried ABC's coverage of its company as "fake news," a term widely used to describe fabricated internet reporting that has broadened in use since the 2016 presidential election.

BPI's lawyer, Dan K. Webb, said despite what he called "ABC's 30-day media attack" five years ago, the company's legal team was able to get across to the 12-person jury that lean finely textured beef was safe.

"We didn't use the term 'fake news' with the jury because we didn't need to," said Mr. Webb of the law firm Winston & Strawn. "We got across to the jury that lean ground beef product was safe and it was healthy."

In 2012, lean, finely textured beef, or LFTB, was found in about 70% of the ground beef found on supermarket shelves. ABC didn't coin the term "pink slime," but it exploded on social media after the broadcasts. "It took BPI 30 years to build up the success, it took ABC 30 days to destroy that by rebranding the product as pink slime," said Mr. Webb.

Beef Product's battle followed a string of other high-profile legal clashes involving the media. Gawker Media was forced into bankruptcy last summer after it lost an invasion-of-privacy suit brought by the former professional wrestler Hulk Hogan. Rolling Stone magazine last year lost a libel lawsuit related to a discredited 2014 story about an alleged fraternity gang rape at the University of Virginia. And just this week, former Republican Gov. Sarah Palin sued the New York Times for defamation over a recent editorial.

ABC's first segment on the product, in March 2012, opened with Ms. Sawyer telling viewers: "A startling ABC News investigation, a whistleblower has come forward to tell consumers about the ground beef a lot of us buy at the supermarket. Is it what we think it is?"

In the report, Mr. Avila described the company's meat product as pink slime made from "beef trimmings...once used only in dog food" and "sprayed with ammonia to make them safe to eat and then added to most ground beef as a cheaper filler."

In the ensuing weeks, ABC followed the segment with several more broadcasts and more than a dozen online stories about the beef, reporting on the fallout for Beef Products.

Beef Products claimed ABC News whipped up the controversy about the meat product to boost ratings, inflaming consumers' fears that forced it to close three of its four plants, erasing hundreds of jobs when consumers recoiled.

The company filed suit later that year, accusing ABC of creating a false impression "that BPI's product was not beef or meat, had little or no nutritional value, and was not safe to eat."

Those three BPI production plants remain closed, but the company said it hopes to rehire the laid-off employees and bring the plants back online if the market for LFTB recovers.

--Joe Flint contributed to this article.

Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com and Jacob Gershman at jacob.gershman@wsj.com

(END) Dow Jones Newswires

June 28, 2017 14:24 ET (18:24 GMT)