A multibillion-dollar court battle is raging in a small South Dakota town between a former heavyweight meat-producer and one of TV's Big Three networks.
The battle between Beef Products Inc. (BPI) — a local beef processor that once supplied McDonald's, Burger King, and Taco Bell — and ABC News is the first big case brought against a media company since the forced sale of Gawker in 2016. The sheer size of the case is sending ripples through the media industry, and the result could have a huge impact on how reporters do their jobs.
In March 2012, ABC aired a series of reports about BPI's "lean, finely textured beef," an inexpensive ground beef additive made up of waste beef trimmings that have been heated, spun in a centrifuge, and doused with ammonia to reduce bacteria.
In the first report on "World News Tonight," two USDA whistleblowers spoke about the product, which they called "pink slime." Despite concerns they had about the product being sold and labeled as meat, they said supervisors had overruled them. In his opening statement Monday, ABC's attorney, Dane Butswinkas, claimed that the supervisors' lack of action was due to intense lobbying pressure, noting that JoAnn Smith, the USDA assistant secretary for Marketing and Inspection Services at the time, eventually went to work for BPI's main supplier.
"None of this was illegal. Just another day in the swamp. Politics as usual," Butswinkas said.
The "World News Tonight" segment also reported that 70 percent of the ground beef sold in supermarkets contained the so-called "lean finely textured beef."
In its lawsuit, BPI said revenue dropped 80 percent to $130 million after ABC aired the segments, and the company had to close three of its four processing plants. Now, BPI is suing the Disney-owned media giant, as well as on-air reporter Jim Avila, for up to $5.7 billion in damages on claims that the news reports defamed the company.
"The only favor I'll ask is that you look at the details."
To prove speech is defamatory, BPI's attorneys will have to show that ABC's reporting was both false and that the reporters knowingly tried to harm the company. But proving that ABC's reporters showed a "reckless disregard for the truth" will be an uphill battle, according to University of Florida College of Law professor Lyrissa Lidsky.
"I think they definitely suffered economic harm from the report, but the question is, to what extent was the report inaccurate, and if it was inaccurate, to what extent did they recklessly disregard the truth?" Lidsky said.
BPI's attorney, Dan Webb, said in court Monday that ABC used the term "pink slime" 350 times over the course of its reporting, and that ABC willfully spread this preconceived, negative message. Webb also showed the jurors a picture of lean finely textured beef. "It physically doesn't look like slime," he said.
But David Heller, deputy director of the Media Law Resource Center, said ABC's opening statement in court Monday provided "quite powerful evidence" to the contrary. The network's attorney Butswinkas asked, "If school lunches and fast-food chains [were pulling away from BPI], how long could it have been for supermarkets to follow?"
"A number of other people had already referred to beef as 'pink slime,' and fast-food companies had already dropped [BPI] as a source [of product]," Heller said.
In fact, the term "pink slime" was coined by one of the segment's whistleblowing USDA scientists in a 2002 email to colleagues, and a 2009 New York Times piece using the term to describe BPI's meat product won a Pulitzer Prize.
The small town where the trial is being held — Elk Point, South Dakota — could influence the way the jury sees the information as well. About 20 miles from BPI's headquarters, Elk Point is home to about 2,000 people.
"It's a small town, so they might be more likely to see the big media company as an outsider, not fully understanding the meat product or the company's production methods or any of that," Lidsky said.
That's certainly something that BPI's attorney is playing up, telling jurors that the company "took 30 years to succeed, and it took ABC less than 30 days to severely damage the company."
ABC's attorney said he picked the 12 jurors by deciding who would work the hardest to fully examine the intricacies of the case.
"The only favor I'll ask is that you look at the details," he told the jurors at the end of his opening statement.
South Dakota's agricultural disparagement law also allows the harmed company to seek triple the amount of the damages they suffered, which, in this case, is $5.7 billion. Like the Terry Bollea vs. Gawker case, which bankrupted the news company with a $31 million settlement, a large settlement could have a chilling effect on the news media at large.
"Certainly large damage awards, if they're given out too frequently or too easily, could result in having us have a press that is going to be reluctant or concerned about sharing what could be really valuable information with us," said Sonja West, a University of Georgia First Amendment law professor.
While the Hulk Hogan/Gawker case ended with a huge settlement, that case was different from BPI's defamation suit, according to Heller.
"There really wasn't a dispute about whether it was true or not; the tape was the tape. And it in some ways is a more complicated question about how far should protection of privacy go," Heller said.
A similar agricultural disparagement law in Texas served as the basis of cattle producers' case against Oprah Winfrey for a 1996 "Oprah" episode about mad cow disease in the U.S. The jurors sided with Winfrey in that case, and she came out of the courtroom saying: "Free speech not only lives — it rocks!"
But it's not 1998 anymore, and President Donald Trump has stoked disdain for the press, calling the media the "enemy of the people." West contends that the news media is on "pretty strong grounds" constitutionally when it comes to defamation, but she also thinks Trump's anti-media rhetoric has thrown the strength of the press into questionable territory.
"The 2016 election in a lot of ways showed us that a number of people view that the value of the media and the work that they do is very low," West said. "The fact that we have a jury at all adds this risk that they might not value what it was that the press was trying to do here."