DAKOTA DUNES, SD – In a 250-page filing, lawyers for Dakota Dunes, SD-based Beef Products Inc. (BPI) detailed what the company alleges is a pattern of misconduct by ABC News that caused BPI huge financial losses and damaged the company’s reputation.
BPI filed a defamation lawsuit Sept. 13 against ABC News alleging the network’s news coverage of lean finely textured beef (LFTB) misled consumers to believe the company’s product was unhealthy and unsafe. Named in the lawsuit were: television news anchor Diane Sawyer; senior national correspondent Jim Avila; ABC News correspondent David Kerley; Gerald Zirnstein , a former US Department of Agriculture employee who claims to have coined the term “pink slime”; Carl Custer, also a former USDA employee; and Kit Foshee, a former BPI employee.
ABC News, which is owned by The Walt Disney Co., denied the claims.
“The lawsuit is without merit. We will contest it vigorously,” Jeffrey W. Schneider, ABC News senior vice president said in a statement.
BPI is seeking more than $1 billion in compensatory and statutory damages, plus unspecified punitive damages.
“The campaign directed at my client began on March 7, 2012,” said Dan Webb, chief counsel and chairman of Winston & Strawn LLP, Chicago. “It lasted for about 30 days, and it was a sustained attack on my client and the lean beef product that it manufactures.
“We have set forth in the lawsuit 200 false and misleading defamatory statements that were directed at my client and its lean beef product,” he said.
Craig Letch, director of food safety and quality assurance at BPI said the company lost 80 percent of its sales within that 30-day period. In May, BPI permanently closed three manufacturing facilities — in Amarillo, Texas; Garden City, Kan.; and Waterloo, Iowa — citing decreased demand for its products. The company kept its facility in South Sioux City, Neb., open but at reduced capacity. The company said 650 people lost their jobs as a result of the plant closings, while the company shed an additional 85 jobs at the company’s headquarters in North Sioux City, SD.
Letch said that he and Eldon Roth, BPI founder and owner, traveled to each location to break the bad news in person. He said they had no explanation for why public opinion had turned so harshly against the company.
“This is not tied to a food safety outbreak,” Letch said. “This is not tied to a public health risk. This is not tied to a quality issue.
“This is tied to a misinformation campaign that was waged against our company,” he added.
Webb said ABC News’ coverage of LFTB and BPI was a “disinformation campaign” unparalleled in duration and scope. His legal team’s research found 11 live broadcasts, 14 online reports and a number of social media platforms that contained false and/or misleading statements about BPI and LFTB. Webb said ABC News referred to LFTB falsely as ‘pink slime’, for example.
Webb said responses posted to ABC News’ website are proof of how the news organization’s alleged reporting of false information impacted public opinion. “Consumers by the hundreds notified ABC that they believe the false statements made by ABC,” Webb said. “Consumers are convinced that my client is manufacturing a product that is some kind of ‘pink slime’ product, that it’s not beef, and that it’s unsafe for human consumption — all of that is false.”
Webb added that consumers believed the product was “somehow hidden, and concealed in ground beef and consumers don’t know anything about it, and therefore it’s some kind of economic fraud that’s been perpetrated on the consuming public,” because of ABC’s reporting.
In addition to defamation and product disparagement, BPI is alleging that ABC committed tortious interference by “blacklisting” companies that sold ground beef containing LFTB.
“First, ABC targets consumers with a mass of false statements and created a grassroots movement to reduce demand for our product,” Webb said. “They started to publish a blacklist of chain grocery stores that sell ground beef that contains our LFTB product. They literally force our customers to stop selling ground beef with our product.”
Tied to BPI’s request for substantial punitive damages is the allegation that ABC News ignored factual information supplied to the news station by BPI and others, including the US Department of Agriculture, the Food and Drug Administration, food safety organizations and other food industry experts.
“At the time ABC was attacking our product, ABC was provided a large volume of factual information by my client and by third-parties that clearly established that this product was not what ABC was stating it was; that ABC was making numerous false statements about the product; and ABC completely ignored all of that information,” Webb said.
“That’s why we are claiming not only $1.2 billion in actual damages, but we’re asking for punitive damages, because ABC was aware that they were running false statements. They were aware of it because of the mass of information they were provided. This is not an example of some news organization making a mistake — that didn’t happen here.”
The North American Meat Association (NAMA) spoke in support of BPI's lawsuit, saying the facts would show that "ABC pilloried an upstanding company".
“By continuing to make malicious claims against BPI despite copious proof of those claims’ falsehood, not to mention intentionally using misleading images and pejorative terminology, ABC has damaged the company and the industry, and has also misled the beef-consuming public, depriving them of a high quality cost-effective product,” said Barry Carpenter, chief executive officer of NAMA.