ABC News Suffers Setback in 'Pink Slime' Defamation Lawsuit

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Beef Products Inc., the South Dakota-based boneless-lean-beef giant that is suing ABC News for $1.2 billion over "pink slime" reports that allegedly have caused the company harm, has experienced a small legal success.

On Wednesday, against ABC's opposition, a federal judge remanded the case to South Dakota state court instead of analyzing the merits and possibly dismissing the defamation action.

ABC News is being sued after news anchor Diane Sawyer and several correspondents highlighted the use of fillers and trimmings in meat products. The expose, which BPI alleged had hundreds of "false and misleading and defamatory" statements about the product, caused a big consumer backlash among those who feared the product might be unhealthy and unsafe. The beef company said that it then had to close three plants and lay off 650 workers.

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In response to the lawsuit, ABC News pointed to the First Amendment and said it was "vitally important" that the claims "be addressed at the outset, because libel claims directly challenge free speech, and the mere pendency of these cases threatens to inhibit additional speech."

In her ruling on Wednesday, Judge Karen Schreier said it was unnecessary at this juncture to "make a determination about the merits" of the company's claims.

The closest that the judge came to this is analyzing whether the news reports were "of and concerning" BPI Technology.

The plaintiff argued that this was a matter for a jury to decide.

ABC News argued in turn that the company couldn't make this case because it was "not the producers of LFTB [lean finely textured beef, otherwise known as 'pink slime'], and there is no evidence suggesting that they are."

Judge Schreier said that ABC News' arguments to sort this out go "against reason." The court adds:

Here, the court needs to determine whether BPI Tech is a real party in interest to determine whether it has authority to hear this case, i.e., whether diversity jurisdiction exists. Defendants' argument, however, proposes that the court first entangle itself with the facts of the case in order to make a legal determination about whether BPI Tech's claim has merit. Put simply, defendants are suggesting that the court make a determination about the merits of BPI Tech's claim before even deciding whether it has the authority to make such a determination. This is putting the cart before the horse.

Nevertheless, the court did find that BPI Tech is a real party in interest and is allowing the case to be heard in a state court.

State judges are expected to apply constitutional principles, like free speech, but defamation defendants often prefer federal judges. The key advantage for the plaintiff, if the case gets that far, would be BPI bringing the case before a local jury whose town might have experienced economic pain from the "pink slime" backlash.

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