ABC ordered to face defamation trial over 'Pink Slime' reports

(Reuters) - A South Dakota state judge has ordered ABC Broadcasting to face a potential $5.7 billion defamation lawsuit claiming it damaged Beef Products Inc by referring in a series of reports to a meat product it sold as “pink slime.”

The Beef Products Inc (BPI) headquarters is pictured in Dakota Dunes, South Dakota November 19, 2012. REUTERS/Lane Hickenbottom

Judge Cheryle Gering of the Union County Circuit Court in Elk Point, South Dakota, dismissed claims against anchor Diane Sawyer, but said ABC, a unit of Walt Disney Co, and reporter Jim Avila must defend against such claims.

“A jury could determine that there is clear and convincing evidence that ABC Broadcasting and Mr. Avila were reckless, that defendants had obvious reason to doubt the veracity of informants, and that they engaged in purposeful avoidance of the truth,” Gering said during a hearing last month.

The judge said Sawyer was different in part because “her actions as anchor, which limits her involvement in doing research,” were not sufficient to establish defamation.

Gering did not rule on the case’s merits. Reuters obtained a transcript of the Feb. 8 hearing on Tuesday. The decision was reported earlier by The Wall Street Journal.

“We are pleased that the court dismissed all claims against Diane Sawyer,” ABC said in a statement. “We welcome the opportunity to defend the ABC News reports at trial and are confident that we will ultimately prevail.”

BPI’s lawyer, J. Erik Connolly, said his client looks forward to proving how ABC “engaged in a disinformation campaign against a company that produces safe and nutritious beef, leading to billions of dollars in damages and hundreds of lost jobs.”

A jury trial scheduled for June 5 could last eight weeks.

Lean, finely textured beef is made from beef chunks, including trimmings, and exposed to tiny bursts of ammonium hydroxide to kill bacteria.

BPI said ABC’s reports in March and April 2012 implied that the South Dakota-based company’s product was not safe, not nutritious and not even meat.

The network has called BPI’s lawsuit an attempt to chill media coverage of the industry and inhibit free speech.

BPI has claimed up to $1.9 billion of damages, which could be tripled to $5.7 billion under South Dakota’s Agricultural Food Products Disparagement Act.

The U.S. Department of Agriculture has called BPI’s product safe. But some retailers, including Wal-Mart Stores Inc, stopped selling ground beef containing it after the ABC reports.

Several other defendants were previously dismissed from the case, including a former Agriculture Department microbiologist said to have coined “pink slime” in a 2002 email.

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

Reporting by Jonathan Stempel in New York; Additional reporting by P.J. Huffstutter in Chicago; Editing by Dan Grebler