ABC News Braces for $5.7 Billion "Pink Slime" Trial in the Heart of Trump Country

A journey to South Dakota to hear arguments whether preconceived negative spin in the media should result in massive punishments.
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On Monday, two huge trials will be commencing. One is the Bill Cosby case, which will undoubtedly attract throngs of reporters to Norristown, Pennsylvania, eager to find out the fate of one of the most famous individuals in the world. Is there enough evidence to convict Cosby and send him to jail for up to 30 years for allegedly sexually assaulting ex-Temple University employee Andrea Constand more than a decade ago? How will the dozens of other Cosby accusers factor? Will race play a role? Will Cosby's legal team be able to use this trial to "change the optics"? All good questions, but I won't be there for answers. Because I'm attending the other trial.

That would be the one that ABC is facing in South Dakota over a series of news reports in 2012 about lean finely textured beef (LFTB), which critics have dubbed "pink slime." Since Beef Products Inc. filed claims against ABC, news anchor Diane Sawyer and star correspondent Jim Avila in September, 2012, the case has hardly been a secret, yet it also hasn't received nearly the amount of attention it deserves. There's solid reasons for that — and for why the trial won't attract the circus that one can expect to circle Cosby next week. More about that in a moment. First, it's important to appreciate the stakes.

BPI claims that the "pink slime" reports tarnished its reputation, caused the closure of several plants, led to hundreds of laid-off workers, and prompted customers including supermarkets and restaurants to cancel orders. But was ABC's reporting untrue? BPI contends that reasonable viewers would infer from watching the broadcasts that its product — found in 70 percent of ground beef, according to ABC — is unsafe, not nutritious, and not really beef nor meat. Further, ABC is accused of implying that BPI had engaged in improper conduct to win regulatory approval of LFTB. The plaintiff also alleges that the mere use of the term "pink slime" — even if it was attributed to scientists working for the USDA  — conveyed a harmful, misleading message.

Last September, ABC begged South Dakota Judge Cheryle Gering to reject claims. In a summary judgment motion, the network's lawyers argued that it was wholly unreasonable to imbue words and phrases with meaning contrary to explicit assurances of safety found in its reports. They told the judge of there never being a case like this permitted to go to a jury. And as for use of the "pink slime" phrase, these attorneys added, "BPI has argued that the term 'pink slime' implies that LFTB is unappetizing, 'repulsive' or 'disgusting.' But those are value judgments, not provably false statements of fact. What is gross or disgusting to one person may be a delicacy to another. We would not say that one such person speaks the truth, while the other utters a falsehood."

First Amendment arguments be damned. In February, Gering decided a jury should be the arbiters. Soon, the case will be in the hands of 12 citizens from the great state of South Dakota.

Just how much money is on the line? BPI is claiming actual damages as high as $1.9 billion, and under South Dakota’s Agricultural Food Products Disparagement Act, there's the possibility of trebled statutory damages, bringing the potential verdict to $5.7 billion (which doesn't even include the possibility of punitive damages). It's a sum so great that The Walt Disney Co., parent of ABC, has included this lawsuit — and no other lawsuit  — in 10-Q reports to shareholders filed with the Securities & Exchange Commission. That means Disney sees the outcome as potentially "material" to its bottom line. But maybe $5.7 billion lacks concrete associative value, so consider that the amount is equivalent to roughly nine months of Disney's broadcast revenue. Or seen another way, if BPI did manage to score just half of the damages being claimed, it could buy up all the stock in The New York Times Co. (market cap: $2.8 billion at present) notwithstanding the poor wisdom of investing in a media outlet upon a judgment like this.

With the huge dollar figure attached, the case has certainly been written about before, but what explains why it took more than a month for word to get out in the national press that Gering had on Feb. 8 rejected ABC's summary judgment motion? (Here, for example, was THR's report of the development on March 14.) The time gap is fairly astonishing in an era when information supposedly travels quickly. Why no five-alarm fire or near constant coverage from the press?

Start with the fact that it's taking place in South Dakota. With media budgets crunched, newsrooms are ever more careful about where to send reporters. Political intrigue in the nation's capital is sucking up oxygen and commanding the mainstream media's finite resources. The past election also demonstrated that big news companies have done a poor job of paying attention to what's been happening in middle America.

Next, consider a South Dakota state court system that's behind the digital times. Fifteen years after U.S. Congress passed the E-Government Act of 2002, which was supposed to enhance citizen access to the judiciary, many states are still not putting court documents online. South Dakota is one of them, and its system may be one of the worst in the nation, with a fairly obscure method for searching and obtaining court records.

Finally, compounding the difficulty in figuring out what's been happening in Beef Products Inc. v. American Broadcasting Companies has been a judge who has pretty much allowed BPI to cloak many of the court documents — even ABC's — out of concern of revealing trade secrets. (Indeed, the attorneys in the case were adamant about not sharing the judge's ruling with this reporter for fear of violating court orders.) Here, for example, is a peek at filings made in the case with the lock-box icon indicating what's been under seal:

If a tree falls in a forest and no one is around to hear it, does it make a sound? Likewise, ABC couldn't possibly be slimed with a $5.7 billion verdict with few reporters around to hear the splat, right? 

Our Man in Elk Point

At ABC, Jim Avila might be just the guy to appreciate the Kafkaesque spectacle were it not for the fact that he's in the middle of it. A journalist for more than 40 years, he was a senior law and justice correspondent for ABC News from 2007 to 2011. Afterward, he became a senior national correspondent assigned to cover regulatory affairs, which led him to the "pink slime" story. He's since become a White House correspondent and later was assigned to the company's Los Angeles office, but the case has been trailing him for a half decade.

According to Avila's affidavit submitted in the case, he first became aware of BPI's product in early 2012 upon learning that McDonald's had decided to stop using it. Claire Brinberg, a senior producer for ABC World News, had the idea to do a broadcast upon seeing a different story titled "Partners in 'Slime,'" which ran in the now-defunct News Corp. publication The Daily. As Avila and his producer, Brian Hartman, began to investigate the subject, they discovered that The New York Times had also published a version in 2009, titled "Safety of Beef Processing Method Is Questioned." The article was part of a series that won a Pulitzer Prize for explanatory reporting.

On March 6, 2012, Avila interviewed Carl Custer, who had been working as a microbiologist in the food inspection division of the USDA. Custer had been cited in the Times article as a scientist concerned with how the department had approved treated beef for sale without obtaining independent validation of the potential safety risk. That article also talked about another department microbiologist, Gerald Zirnstein, who had called processed beef "pink slime" in a 2002 email message to colleagues. Avila and Hartman also interviewed Dr. Zirnstein.

That same day, according to court documents, an internal listing of "possible" World News stories went around ABC's offices. One was: "PINK SLIME MEAT IN SCHOOL LUNCHES — WHAT IS REALLY IN THERE & IS IT SAFE?"

BPI declined ABC's request for an on-camera interview, but did send over a one-paragraph description of its product and a series of testimonials pertaining to the safety of LFTB.

On March 7, 2012, when the initial report aired, the slug had changed to: "PINK SLIME MEAT INVESTIGATION — DO YOU KNOW WHAT'S IN YOUR FOOD?"

Avila states in his court filing that his idea for the feature evolved. 

"The focus of this potential story shifted from the possibility of influence or corruption to the fact that the consuming public was unaware that 70 percent of the ground beef sold in supermarkets contained this highly processed, ammoniated product," he says. "I agreed with World News Executive Producer Michael Corn that the consumer angle was of much more interest to consumers."

The 70 percent figure was "startling" to Avila, which he felt went beyond what The New York Times and The Daily had reported about the product's inclusion in school lunches and fast-food offerings. The ABC report also detailed how LFTB was made from "beef trimmings that were once used only in dog food and cooking oil, now sprayed with ammonia to make them safe to eat and then added to most ground beef as a cheaper filler."

Initially, there wasn't a plan to do a follow-up, but after ABC viewers demanded to know what stores included the product, Avila says the team set out to answer those questions by sending producers into stores to ask whether their ground beef contained "pink slime." Major grocery chains were contacted too, which would later serve as the basis for BPI's claim for tortious interference on top of its allegations of defamation.

On March 8, a day after the initial report aired, Hartman spoke to Kit Foshee, the former director of quality assurance and food safety at BPI. That same day, ABC would air Foshee's remarks, "It looks kind of like Play-Doh or just something that's pink and frozen. It's not what the typical layperson would consider meat."

ABC's lawyers have been careful to note that the report explicitly stated, "The USDA says it's safe to eat," but the fallout was no doubt harmful to BPI. After the grocery giant Safeway announced it would no longer be selling beef products containing LFTB on March 20, ABC World News would report this development. Within a week, BPI announced it was suspending production at three of its plants, which ABC also reported. On March 27, Avila wrote an online report titled, "Beef Products Inc. Comeback: It's Not 'Pink Slime'; It's Safe, Nutritious and 'It's Beef.'"

The network will now appear before a jury to fight over whether its series carried defamatory statements and implications. ABC couldn't prevail at the pretrial stage on its argument that value judgments and colorful "loose wording" descriptors can't rise to provable falsehoods.

At the February hearing, Gering told the parties, "I would also note that one word, such as 'slime' or 'filler' is enough to be considered defamatory, … but I am looking at the entirety of the broadcasts. I'm not focusing on just individual words."

The judge also seemed to adopt a new standard when it came to the way reporters quote sources, tying it into questions regarding credibility. For instance she said that in listening to Custer's interview, "He repeatedly references double hearsay from an unidentified supervisor who said, 'The undersecretary says it's pink, therefore it's meat.'"

ABC also was not successful in avoiding trial with the argument that BPI had failed to establish actual malice, a prerequisite to defamation in cases brought by public figures.

In her summary judgment ruling, Gering pointed to the original slug (or pitch) for the story instead of the later changed version.

"Pink slime meat in school lunches — what is really in there and is it safe?" said the judge. "A jury could find from these comments that ABC was pursuing a negative spin on its story from the beginning before any research was done and then took steps in its investigation only to hear and report what fit within that negative image. In listening to and watching the interviews of Custer, Zimstein, and Foshee, the primary sources for the stories by ABC, numerous softball questions are asked of these individuals. Now, I recognize that the interviews that are recorded that I'm reviewing are those that are on tape and that there were prior conversations that ABC had with these individuals. But it is still clear and convincing evidence, the court finds, that a jury could believe that none of these three individuals were pushed by those at ABC asking them questions."

In Elk Point, South Dakota, at a trial that's expected to last a whopping eight weeks, ABC will be able to reprise its contention that there's nary any evidence that Avila and others harbored serious doubts about the reports. BPI will likely seize not only on internal pitches for the story to make the case that ABC intended to convey certain messages about its product, but also contemporaneous evidence like an Avila tweet on March 17, 2012, that stated, "As I asked Meat Institute and BPI, if pink slime is good for you and safe, why not market it as such?"

ABC and Avila (but not Sawyer, who was dismissed from the case) face billions in damages, but make no mistake that BPI faces consequences as well. In particular, ABC has now gotten a chance to review all sorts of information about BPI, the beef product, and the regulatory review, and will showcase its findings in a bid to demonstrate the truth of its reporting. 

Truth has always been the best defense. But will it matter? We may be journeying to the corollary to what Stephen Colbert called "truthiness," where hostility to authority is interpreted by some as seeming or feeling false, even if it is not necessarily false. Trump calls it "fake news." Others might say, "falsyness." 

The Trump Factor

"The media is entirely negative. 'Pink slime' sounds gross. ABC should have to pay something."

That comment comes from a family member of mine upon hearing the broad brushstrokes of this case. What could be concerning for ABC is that the individual who told me this is, by my measure, a fairly routine news consumer. What's more, she's from Maryland, which voted for Hillary Clinton over Donald Trump this past November by a 27-point margin. The "pink slime" trial will happen in South Dakota, which conversely voted for Trump by a 30-point margin (behind only West Virginia, Wyoming, Oklahoma and North Dakota).

The opinion of the media has never been lower. According to a recent Harvard-Harris poll, 65 percent of voters believe there's a lot of "fake news" in the mainstream media. Skepticism of the press is even more severe among Republicans. Among Democrats, the feeling of an overabundance of fake news is roughly split between those who agree and those who don't, but for Republicans, four out of five surveyed believe that "fake news" is saturating coverage.

It's ABC's poor fortune to spend five years fighting this case only to go to trial at the very moment that Donald Trump is calling the media the "opposition party." That's not to impugn the impartiality of jurors at the trial, and the topic of beef should be an apolitical one, but ABC would be wise to brace for the other side doing whatever it can to inject distaste for the media at large into the proceeding at hand. That's especially likely if it ever came time to assess punitive damages, because then, there would surely come an explicit invitation for jurors to send a message.

Just look at what went down at the March 2016 trial between Hulk Hogan and Gawker before the stunning $140 million verdict. During the trial, Hogan brought a media expert to the witness stand to talk about a "Cheerios Test," or what would upset readers eating breakfast that morning.  During closing arguments, Hogan's attorney asked jurors point blank, "Do you think the media can do whatever they want?"

The forthcoming "pink slime" trial has the feeling to some degree of Hogan v. Gawker, insofar as there being a state court judge who waved off First Amendment objections to let a jury decide. Of course, that case, with a billionaire secretly funding a privacy suit over a published sex tape, was quirky in many respects. BPI's lawsuit seemingly entails more routine forms of reporting. Thus, the proceeding and outcome could become a much bigger influence in how journalists cover public figures, from those in Corporate America to celebrities accused of serial rape. Even some connected with the plaintiff's side privately express surprise at how far this case has advanced. Other observers (some of whom professed expertise on this case before admitting they hadn't read court documents) say they originally expected this case to fall by the wayside similar to the one faced by Oprah Winfrey in 2000 when she was taken to court by Texas cattle ranchers after she swore off burgers during a show about mad cow disease.

Then again, maybe the "pink slime" verdict will be anti-climatic, similar to the nearly-forgotten one that HBO faced in 2015 when the premium cable network prevailed in a massive defamation trial over a Real Sports With Bryant Gumbel report on child labor in India.

Lawyers for both sides declined to talk about the judge's rulings and what's coming. Each nodded to confidentiality restrictions imposed.

But ABC did offer this statement: “We believe in the principle that people deserve to know what’s in the food they eat and are confident that when all the facts are presented in court, ABC’s reporting will be fully vindicated.”

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