DAKOTA DUNES, S.D. - ABC News engaged in a "vicious" month-long disinformation campaign that defamed Beef Products Inc. and its signature beef trimmings, causing a "catastrophic loss of business, the Dakota Dunes company alleged in a lawsuit filed Sept. 13. The company is asking for $1.2 billion.
BPI claims the national news network made 200 false, misleading or defamatory statements that ignited a consumer backlash and led to the loss of 80 percent of the previously thriving company's sales.
The reports left the false impression that BPI's Lean, Finely Textured Beef was "not beef at all - that it's pink slime and was unsafe for public consumption" and the firm was masterminding economic fraud, said company attorney Dan Webb at a news conference Thursday.
As a result of ABC's actions, demand for its safe, nutritious product dried up, forcing the family-owned company to close three of its four Lean, Finely Textured Beef plants, and lay off more than 700 workers, including some 86 employees in metro Sioux City, according to the suit.
The 257-page lawsuit, filed in Union County, S.D. Circuit Court, names American Broadcasting Companies Inc., ABC News Inc., "World News Tonight" anchor Diane Sawyer and news correspondents Jim Avila and David Kerley as defendants.
ABC News Senior Vice President Jeffrey W. Schneider denies the allegations.
"The lawsuit is without merit," he said in a statement. "We will contest it vigorously."
BPI critics who were interviewed for the ABC stories also were named as defendants. They include former U.S. Department of Agriculture officials Gerald Zirnstein and George Custer, and former BPI employee Kit Foshee.
Zirnstein is credited with coining the term "pink slime" in a 2002 email obtained by The New York Times. According to the lawsuit, the phrase was mentioned 130 times during 11 ABC broadcasts and 14 other stories on the network's website between March 7 and April 3.
During the 28-day period, many other national news organization also published stories that portrayed the beef product in an unflattering light, fueling a media firestorm that quickly spread to social media sites.
Asked why ABC was singled out, Webb said: "We picked the news organization we believe has damaged BPI."
Webb, a famed Chicago attorney whose clients have included business giants such as Microsoft and Phillips Morris, described the defamation case against ABC as "unparalleled in American history."
"This misinformation campaign was actually started by ABC after they been given substantial information that showed the statements were false and misleading and defamatory and they did it anyway," he said.
The suit said the network improperly interfered with BPI's relationship with its customers. Webb said ABC created a "blacklist" of supermarkets and other retailers that sold ground beef that contains LFTB. Under pressure from worried consumers who watched the broadcasts, many of those outlets dropped the product, he said.
An online petition calling for the banning of the product from school lunch menus also led to the U.S. Department of Agriculture giving local districts the option of carrying beef with BPI's product, which is more than 95 percent lean, or beef with a higher fat content. For classes that began this fall, only schools in Iowa, Nebraska and South Dakota chose to continue serving beef that may contain LFTB.
BPI's lean trimmings, which were found in as much as 70 percent of the nation's ground beef, is made from fatty trimmings from steaks, roasts or other cuts of beef. The bits of lean meat are heated and separated from the fat with a centrifuge before being treated with small amounts of ammonium hydroxide gas to kill E. coli and other potentially deadly pathogens.
After the controversy erupted, BPI's sales of LFTB plummeted from five million pounds per week, to two million pounds per week, forcing the company to close its plants in Garden City, Kan.; Waterloo, Iowa; and Amarillo, Texas. The only plant still open, in South Sioux City, is operating at reduced hours and production.
BPI claims the defendants' actions will cost the privately held company more than $400 million in profits over the next five years. Filing its defamation suit in South Dakota, one of just 13 states with a food product disparagement law, allows the company to ask for three times that much in actual damages. BPI also is seeking an unspecified amount of punitive damages.