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Sep 13 2012

Will Pink Slime Lawsuit Stick? I Think Not.

Beef Products Inc., the makers of “lean, finely textured beef” as the product is officially called has filed a $1.2 Billion lawsuit against ABC News over its coverage of “pink slime” beef. Six individuals were also sued, including ABC News anchor Diane Sawyer, and the reporters Jim Avila and David Kerley. Another defendant is Gerald Zirnstein, a former U.S. Department of Agriculture microbiologist credited with coining the term “pink slime,” and who appeared in ABC’s reports. Zirnstein had used the term “pink slime” in a 2002 email to coworkers after touring a Beef Products plant. His email was later released to The New York Times and ABC then picked up the story and ran with it.

Ground beef filled with what has been called “pink slime.”

The product is made from fatty trimmings off of bones and other beef cuts. It is then sprayed with ammonia to kill of any bacteria. It is then used as a filler to spread out ground lean beef. Yummy! It has been approved by the Department of Agriculture since 1993 and went largely unnoticed until the news reports.

The company argues that ABC’s repetition of stories on the product over several days contained false and disparaging statements about the product and caused the company devastating losses. Beef Products said the media furor forced it to shutter three of its four plants and eliminate more than 700 jobs, roughly half its workforce, and caused it to lose more than $20 million of revenue each month. It also said weekly sales of the beef filler have fallen to less than 2 million pounds per week from nearly 5 million. Large companies such as McDonald’s Corp., Yum Brands Inc.’s Taco Bell and supermarket chain Safeway Inc. having halted their purchases of the product as well, according to news reports.

All of this is very bad for the company for sure, but is it actionable? I doubt it. That pesky First Amendment tends to get in the way of these lawsuits. You may recall that in 2000, a federal appeals court rejected defamation claims by Texas cattle ranchers against talk show host Oprah Winfrey over a “dangerous food” episode of her show, where she was accused of falsely depicting U.S. beef as unsafe in the wake of a British panic over “Mad Cow” disease. This is an even bigger stretch. The plaintiff will have to prove that ABC knew it was presenting false information and proceeded to do so out of malice or recklessness. That’s a mighty big bridge to cross. The lawsuit against the government worker is even on thinner grounds. That is a simple expression of his opinion; opinion is of course highly protected constitutionally as it does not amount to misrepresentation of fact. Furthermore, he used the term in an internal email – it was the Times who published and ABC News who repeated it. So unless he out and out lied about the product when he was on TV (I did not see the segment) he should be able to get out of the case very quickly.The company is based in South Dakota and sued in South Dakota State Court. If there is any legal way to do so, the defendants will remove this to Federal Court as I have a hunch that the CEO and officers of Beef Products might be a wee bit chummy with some of the local jurists there.

The big winners of course are the lawyers, the megafirm of Winston and Strawn (nearly 1,000 attorneys among 15 offices in Beijing, Charlotte, Chicago, Geneva, Hong Kong, Houston, London, Los Angeles, Moscow, New York, Newark, Paris, San Francisco, Shanghai, and Washington, D.C.). which stands to earn millions in legal fees if the case survives the early dismissal process. I would like to see what percentage of success they gave to their client on winning this. But this lawsuit was likely brought by Beef Products as an attempt to stand by its product and woo back its large customers. So they probably are OK with filing it even though it stands a very slim chance of victory.

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