BPI wants ABC 'pink slime' defamation case back in state court

Thu Jan 17, 2013 4:12pm EST

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Jan 17 (Reuters) - Beef Products Inc, the meat processor suing ABC News over reports about its beef product that was labeled "pink slime" by critics, wants the case to be moved out of the federal judicial system and back to a South Dakota state court.

The case involves ABC reports last spring on lean finely textured beef (LFTB), a product used in ground beef. Beef Products contends the reporting was defamatory and falsely portrayed the product as unsafe, accusations the network denies.

Which court ultimately oversees the case, and rules on whether it goes forward, has been one of the first steps in the high-profile lawsuit brought by the privately held South Dakota meat processor against the network, a unit of Walt Disney Co .

In court papers filed on Monday, BPI's attorneys argued that a state court is the proper forum because the case also involves two related companies: BPI Technology Inc and Freezing Machines Inc that do business in South Dakota and are incorporated in Delaware. BPI and the two other entities are all owned by Eldon and Regina Roth.

The ABC broadcasts "harmed each company's reputation, destroyed the business relationships that each had developed with LFTB customers, and caused LFTB sales to plummet," the plaintiffs said in papers filed before U.S. District Judge Karen Schreier in Sioux Falls.

An ABC spokesman declined to comment on Thursday.

ABC has sought to have BPI Technology and Freezing Machines dismissed from the case and has also petitioned to have the entire lawsuit thrown out.

BPI filed the complaint in September in Union County Circuit Court, but ABC later moved it to the federal court.

In the lawsuit, the plaintiffs contend that the ABC broadcasts and online reports destroyed sales and forced BPI to close three plants and lay off hundreds of employees.

The plaintiffs are seeking $400 million in damages for lost profit they say was caused by the ABC reports. The damages could be tripled under South Dakota's Agricultural Food Products Disparagement Act. BPI and the other entities are also seeking punitive damages.

Defendants sometimes prefer to fight lawsuits in federal courts where procedures are more standardized. Disagreements over where a lawsuit belongs can slow down a case in the early stages.

The case is Beef Products Inc et al v. American Broadcasting Cos et al, Circuit Court of South Dakota, Union County, No. 12-292.

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