Does the Maker of 'Pink Slime' Have a Case Against ABC News?

Even with a Top Lawyer on Its Side, Defamation Lawsuit by Beef Products Inc. Faces High Hurdle

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Although it was first derided as "pink slime" by a scientist way back in 2002, the beginning of the end for a once widely used type of beef scraps might have come last March, when ABC News broadcast a series of damning reports about the product.

Now a company that makes the product -- which is technically called "lean, finely textured beef" -- has the news organization in its crosshairs. In a defamation lawsuit filed Sept. 13, Beef Products Inc. alleges that "ABC News with Diane Sawyer" got the facts wrong, while "knowingly" engaging in a "disinformation campaign" against the company. The "grassroots campaign" against stores that sold the product led to a sharp sales decline and the closure of three plants, the complaint alleges. The lawsuit, filed in a South Dakota state court, seeks more than $400 million in actual and consequential damages, plus more in punitive damages.

In a statement, ABC News Senior VP Jeffrey W. Schneider said: "The lawsuit is without merit. We will contest it vigorously."

So which party has the legal edge? And what are the PR implications?

ABC News has precedence on its side, said one legal expert not involved in the case. "Even if it turns out that [the reporting] is not correct or inaccurate in some way, there is an additional showing that the plaintiffs have to make that there is actual malice, meaning that it's either reckless or knowingly false, which is a very, very high burden," said Randall Miller, a partner with Arnold & Porter law firm in Virginia who has experience with defamation cases. "And there's a strong First Amendment, public policy [reason], for courts to throw these cases out of court right out of the gate."

Still, this is not a run-of -the-mill complaint. Beef Products' lawyer is Dan K. Webb, a highly respected attorney from Chicago, who has represented General Electric, Microsoft Corp., Phillip Morris and other high-profile clients and is a former U.S. attorney. "The complaint is very thorough and detailed and it's going to be probably taken pretty seriously," Mr. Miller said. "If it can survive a motion to dismiss, then it can get into the discovery process and make life hard for ABC News."

And that would be bad news for ABC, which like any news organization, fiercely guards its reputation.

The complaint, which can be found here, numbers 257 pages and includes a detailed accounting of ABC's reporting. It alleges that from March 7 to April 3, the network aired 11 broadcasts "attacking" Beef Products and its product. The broadcasts were supplemented with 14 online reports and "numerous social media postings" that together "knowingly or recklessly made nearly 200 false, defamatory and disparaging statements," the complaint alleges. Defendants include American Broadcasting Companies, Inc.; Diane Sawyer; correspondents Jim Avila and David Kerley; and Gerald Zirnstein, a former U.S. Department of Agriculture scientist-turned-whistleblower who coined the phrase "pink slime" in 2002 and who was an ABC News source. Also listed are Carl Custer, a former USDA employee who appeared on ABC broadcasts; and Kit Foshee, a former Beef Products Inc. employee who also appeared on broadcasts, according to the complaint.

The product in question is made from meat scraps that are heated to remove fat and treated with food-grade ammonium hydroxide to kill bacteria. Such beef scraps act as a way for producers to control costs, sparing them from slaughtering additional cattle. Beef Products Inc., or BPI, is a leading producer of the product and began making it in the early 1990s.

Red flags were raised as far back as 2002 when Mr. Zirnstein expressed concerns in an email to colleagues. But the outcry did not go mainstream until April 2011, when celebrity chef Jamie Oliver criticized it on his "Food Revolution" TV show, which was carried on ABC. On ABC News, Mr. Avila described the product as "beef trimmings that were once used only in dog food and cooking oil now sprayed with ammonia to make them safe to eat, and then added to most ground beef as a cheaper filler." In the complaint, BPI takes issue with ABC's repeated use of the phrase "pink slime," saying that such statements are "false because LFTB [lean, finely textured beef] is not pink slime, which is a noxious, repulsive and filthy fluid." The company also takes issue with any suggestions that the product is not meat.

In ensuing media coverage, big chains such as Kroger, Safeway, Burger King and Taco Bell made it clear they no longer use the filler. McDonald's said it had discontinued it at the beginning of 2011. Meanwhile, BPI started an aggressive PR counter-offensive, including enlisting the support of several governors and running a full-page ad in the Wall Street Journal. A website, beefisbeef.com, calls the product "100% beef" and notes that "ammonium hydroxide is used in everyday cooking, from baking powder to cheese to chocolate."

But the company has not recovered. Sales dropped from nearly 5 million pounds per week before the media coverage to less than 2 million pounds per week, while 700 employees were laid off, according to the complaint, which alleges that the company is "losing more than $20 million in revenue every month due to the defendants' misconduct."

But one food expert said the lawsuit is the wrong way to go from a public-relations perspective. It's "absolutely a bad move," said Phil Lempert, who runs supermarketguru.com. He cited a mid-1990s lawsuit by cattle producers against Oprah Winfrey, who made mad cow disease and beef safety the topic of discussion for a show. "It just kept mad cow on the headlines much longer," Mr. Lempert said.

Still, PR considerations are typically a secondary concern for companies in these legal matters, said Chris Gidez, senior VP and global practice lead for Hill & Knowlton Strategies. "Smart companies don't make decisions about filing lawsuits based primarily on the PR implications, good or bad," he said. "They make those decisions based on the facts and how important it is to their business."

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