June 5, 2017 / 12:00 PM / 6 months ago

'Pink slime' defamation case against ABC under way in S. Dakota

(Reuters) - A South Dakota meat processor’s $5.7 billion defamation lawsuit against American Broadcasting Company opened on Monday, pitting big agriculture against big media, in the first major court challenge against a media company since accusations of “fake news” by U.S. President Donald Trump and his supporters have become part of the American vernacular.

In the closely watched case, Beef Products Inc (BPI) claims ABC, a unit of Walt Disney Co, and its reporter Jim Avila, defamed the company by calling its ground-beef product “pink slime” and making errors and omissions in its reporting.

The 2012 news reports almost put privately held meat processor BPI out of business, a lawyer for the company said in opening arguments on Monday.

“That success took about 30 years to succeed and it took ABC less than 30 days to severely damage the company,” the attorney, Dan Webb, said in court.

In the aftermath of ABC’s reports, BPI closed three of its four processing plants and said its revenue dropped 80 percent, to $130 million.

ABC has countered that its coverage was accurate and deserved protection under the U.S. Constitution’s First Amendment which guarantees freedom of religion, speech and the right to a free press.

ABC denies any wrongdoing and is confident its reporting will be “fully vindicated,” a lawyer for ABC and Avila, Kevin Baine of Williams & Connolly, has said.

The trial is being held in Elk Point, South Dakota, about 20 miles (32 km) north of BPI’s headquarters, which employs 110 people. Roughly 6 percent of the area labor force is involved in agriculture and related industries, according to the local chamber of commerce.

Election records show 67 percent of the U.S. presidential vote in Union County, where Elk Point sits, was won by Trump, who uses the term “fake news” to argue that some mainstream media outlets cannot be trusted.

Lawyers for BPI have declined to say if they plan to focus on “fake news” as a tactic at trial. But during a January court hearing, a BPI lawyer, Erik Connolly, said ABC broadcasts and online reports about “lean finely textured beef” (LFTB) used unreliable sources and set out to foment public outrage. The ABC reports amounted to “fake news,” Connolly told the judge.

BPI’s signature product, commonly mixed into ground beef, is made from beef chunks, including trimmings, and exposed to bursts of ammonium hydroxide to kill E. coli and other contaminants.

Webb said in court on Monday that between March 7 and April 3 of 2012, ABC used the term “pink slime” more than 350 times across six different media platforms including TV and online.

Reporter Avila, wearing a gray suit and striped tie, was in the courtroom on Monday as were BPI’s founders, Eldon and Regina Roth.

To win its case, BPI must show the network intended to harm the company or knew what it reported was false when it referred to BPI’s LFTB product as “pink slime.” BPI also claims ABC made other errors and omissions that unfairly cast its product in a bad light.

Not since talk show host Oprah Winfrey in 1998 took on cattle producers in Amarillo, Texas, have big media and big agriculture squared off in such a high-profile way on the industry’s home turf.

The Texas jury in 2000 rejected claims Winfrey defamed cattle ranchers during a “dangerous food” episode of her eponymous show, when she expressed concerns about eating beef at the height of the panic in Britain over “mad cow” disease.

As in the Winfrey case, the lawsuit against ABC is upending a quiet, rural town. To make room for overflow crowds in the town of 2,000, the county commission earmarked $175,000 to turn the Union County Courthouse basement into an enlarged courtroom and move records into a specially constructed separate building.

BPI moved modular offices into town to accommodate its legal team, the company said. (Additional reporting by Mark Weinraub in Chicago; E)

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