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Testimony continued Wednesday in Beef Products Inc.'s $1.9 billion defamation lawsuit against ABC in Union County Circuit Court in Elk Point, S.D.

It’s a sure bet that the summer plans for 16 Union County, South Dakota, residents look a lot different today than they did a week ago.

The 11 women and five men constitute the jury in the defamation lawsuit brought by Dakota Dunes-based Beef Products Inc. against ABC and Jim Avila, a senior correspondent for the broadcaster. BPI’s $1.9 billion lawsuit is scheduled to last eight weeks, potentially concluding in late July.

The legal case

BPI is bringing suit under a 1994 state law that makes it illegal to knowingly disparage agriculture products with falsehoods. The law allows for treble damages, which in BPI’s case would amount to $5.7 billion.

South Dakota is one of 13 states with laws that protect agriculture from disparagement. State legislatures began passing the laws after a 1993 decision in Washington where a court rejected efforts by apple farmers to punish 60 Minutes for a story that questioned the use of pesticides on apples, said Dave Heller, the deputy director of the Medial Law Resource Center.

BPI filed suit in September 2012 following a series of negative reports aired by ABC about BPI’s signature product, Lean Finely Textured Beef. Following the reports, many of BPI’s major customers stopped buying LFTB, which was used as a lean beef filler in hamburger. The fallout from those reports forced the company to close three of four plants and eliminate half its work force.

Roy Gutterman, the director of the Tully Center for Free Speech at Syracuse University, said the laws were intended to intimidate and chill news coverage. He noted that the term “pink slime,” which was used in ABC’s broadcast to describe LFTB, was consistent with language used in the industry.

“The pink slime case is an affront to the First Amendment,” he said in an email. “The damages being sought are outrageous.”

Patrick Garry

Garry

Patrick Garry, a law professor at the University of South Dakota School of Law, said that BPI has a high bar because of First Amendment speech protections. BPI must prove that ABC acted with malice – that it knowingly reported falsehoods with a desire to hurt BPI.

While the media has long-held legal protections, Garry wonders if this is the right case at the right time that could puncture some of those protections. BPI could have access to internal ABC documents showing the network’s reports were biased, opening the door to a malice claim.

Steve Kay, who publishes Cattle Buyers Weekly, said it appeared to him that ABC set out to disparage a product that had been used around the world for years.

“I’m trying to be as neutral as possible, but by most standards of responsible journalism it appeared to be distorted and biased and extremely unreasonable,” Kay said.

Eldon Roth mug

Roth

Eldon Roth, BPI’s CEO, founded the company in 1981. He pioneered a method, Kay said, of extracting lean beef from fatty portions of cattle that had previously been rendered. BPI’s method relied on centrifuges to extract the lean beef, which could then be added to hamburger, making a leaner product.

Roth further revolutionized the product following an E. coli outbreak that sickened hundreds in 1993 who ate hamburgers sold by Jack in the Box. He developed a process in which LFTB was treated with ammonium hydroxide to kill E. coli and other microbes.

The outcry is ironic, Kay said, because it was arguably the safest product on the market.

“ABC’s whole approach to BPI didn’t make any sense to me,” Kay said. “It seemed to ignore the whole history of the product.”

The damages

ABC wasn’t the first media outlet to report on the process of making LFTB. The New York Times discovered an email in which a U.S. Department of Agriculture microbiologist described the product as “pink slime.” The paper referred to the email in a 2009 investigation, which uncovered reports of salmonella and E. coli in BPI products used in school lunches.

While no outbreaks were tied to BPI, the report by the Times included skepticism about the product’s safety among school lunch officials. In 2011, McDonald’s, Burger King and Taco Bell abandoned LFTB.

Then came ABC’s series of reports in March of 2012. Although the network broke little ground in terms of what had already been reported by the likes of The New York Times and others, its reporting set off a wave of negative reaction about LFTB. Grocers abandoned the product and USDA said school lunch programs didn’t have to use beef that included LFTB.

BPI’s revenues plummeted from $1.1 billion in 2011 to $400 million last year, Kay said. ABC’s reports “had an immediate and lasting impact on BPI’s business.”

“No way has their business even more than partially recovered,” Kay said.

Consumer transparency

Much of the outcry about LFTB – and a focus of ABC’s reporting – was on the use of ammonia to kill microbes. Although ammonia is used in other processed foods and was OK’d by USDA for use at certain levels for LFTB, food advocates were outraged that it wasn’t on the product label. Nor were consumers alerted to the fact that LFTB portions come from parts of the animal that had previously been rendered or used outside of the food chain.

Michele Simon, a public health attorney and author who wrote about the topic, and who was deposed in the case, said ABC’s reports exposed “the vast underbelly of the industrial meat system.”

“I don’t think anyone was claiming it was unsafe, just disgusting,” Simon said.

Kay, however, says it would be impractical to describe the processes of making hamburger with LFTB on product labeling. BPI, he added, has always been open about its product and the processes it used.

But Simon says the company had no answer about why it wasn’t being more transparent. And she said she doesn’t know why anyone in the news industry “would have it out for BPI.”

“It’s a typical shooting-the-messenger act,” she said.

The outcome?

ABC tried but failed to move the case from state court to federal court. The loss meant that it will be forced to defend itself in BPI’s backyard.

“It’s hard to predict what will happen in this trial,” Heller said in an email. “ABC is in the plaintiff’s home turf at a time of unprecedented hostility toward the press as purveyors of ‘fake news.’ On the other hand, you will have a jury of average Americans probably more concerned with what they put on the family dinner table than the public relations of a beef processor.”

Juries, Garry said, are often sympathetic to people who make defamation claims and give generous awards. But often, those awards are reversed on appeal, and Garry said he expects this case to be appealed, especially if the verdict goes against ABC.

Besides the Washington apple case that spurred state disparagement laws, Heller noted that nearly 20 years ago, Oprah Winfrey won a case in Texas after cattle ranchers attempted to silence her concerns about beef safety.

“If the past is any track record, courts and juries will not be quick to shut down legitimate public debate about what we eat,” he said.

“While it’s true that opinions about food can substantially impact the bottom line of a manufacturer, that’s a product of the free exchange of ideas,” Heller said. “We don’t need the government to put its thumb on the scale and chill debate about what we are eating and how it’s made.”

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