Why the ABC News 'Pink Slime' Ruling Is Bad for the Media Business

Diane Sawyer - broadcasts from Times Square on the death of Osama Bin Laden - 2011
Ida Mae Astute/ABC

For those who have seen the Academy Award-nominated film The Insider, a South Dakota judge has authored the next chapter.

On Thursday, Judge Cheryle Gering refused to toss a $1.2 billion lawsuit brought by Beef Products Inc. over ABC News reports about a meat product called lean, finely textured beef, which critics have dubbed "pink slime." While dismissing a few of the claims, the judge is allowing the bulk of the lawsuit to proceed.

EARLIER: Judge Refuses to Throw Out ABC News 'Pink Slime' Lawsuit

One of the biggest claims is that ABC defamed the company when news anchor Diane Sawyer and several correspondents highlighted the use of fillers and trimmings in meat products. The network attempted to assert that the "pink slime" reports couldn't be construed to have disparaging meaning and that much of what was being complained about were not presented as statements of fact, and thus, not actionable.

The judge isn't having it.

According to the ruling, "In this case, the court believes that the allegedly tortious statements made by the Defendants give a person a mental picture of the product which [sic] is being described, i.e. provide an actual description of the product and are not merely an 'unrealistic exaggeration.' Furthermore, it cannot be said that the alleged defamatory statements made by the Defendants were merely hyperbolic statements or epithets."

EARLIER: ABC News Suffers Setback in 'Pink Slime' Defamation Lawsuit

The defamation claims will earn the headlines, but no one should ignore the tortious interference claims.

BPI alleges that ABC intentionally and unjustifiably engaged in a "disinformation campaign" and got in the way of business relationships with grocery store chains and ground beef producers. One of the ways this allegedly happened was that the network kept publicizing grocery store chains that carried "pink slime" beef, causing these stores to stop selling it as a direct result of the news reports.

This calls to mind some of the claims by Brown & Williamson Tobacco Corp. against CBS a few decades ago. The most famous tortious interference case concerned a 60 Minutes report that was featured in The Insider, but there was another case in the 1980s over a news report from a CBS affiliate that covered whether cigarettes were being marketed to children. In analyzing that case, the 7th Circuit Court of Appeals remarked, "Any libel of a corporation can be made to resemble in a general way this archetypal wrongful-interference case, for the libel will probably cause some of the corporation's customers to cease doing business with it."

EARLIER: ABC Looks to Kill 'Pink Slime' Lawsuit, Saying It's a Threat to Free Speech

In attempting to knock down the tortious interference claim, ABC wanted to use the ruling as suggestive that such a claim failed by way of the First Amendment, but Judge Gering points out that the 7th Circuit ultimately decided not to consider the constitutional implications of allowing an end run around defamation law.

However, Judge Gering was happy to fill in the blanks.

She writes, "Simply put, none of the cases cited in the Defendants' brief stands for the proposition that news organizations are immune from suit for tortious interference with a business relationship under the First Amendment. The ABC News Defendants' status as news reporters and news organizations does not give them immunity from such a claim."

The judge goes on to say that in a matter of public concern, there may be an issue of whether the acts were intentional, but since that's what is alleged, she won't dispose of it at the motion to dismiss phase.

Below is the full ruling.

Twitter: @eriqgardner