Trade Libel Basics: The Pink Slime Lawsuit

ABC pink slime trade libel case
The “Pink Slime” lawsuit involving ABC News is a high-profile trade libel lawsuit currently making headlines.

After fielding a few questions on the matter over the weekend, I thought I’d do a quick-and-dirty, just-the-facts-sir blog post about trade libel.

Super Simple Trade Libel Definition

Healthy competition is allowed and encouraged in the United States.  The difference between healthy competition and libel is the action of knowingly making false statements against a competitor to gain an economic advantage.

Trade libel is the publication of a false statement of fact about a product or business that results in monetary damages. For example: if a person falsely claims an online retailer never shipped a product when it had, that is trade libel.  A business tort, trade libel claims allow the injured party to seek injunctions and compensation for damages incurred.

In order for a company to sue for trade libel, they must prove the defendant published derogatory false statements about a business or product. They must also show that the defendant’s actions negatively interfered with the company’s relationships with customers, suppliers or peers — and led to financial loss.

Some courts require proof that the defendant published the statement with the specific intent to injure.  Other jurisdictions presume mal-intent.  The detail of the law varies depending on the state in which the suit is tried.

Current High Profile Trade Libel Suit: The Case of the Pink Slime

Beef Products Inc. (BPI) sued ABC News, Inc. for defamation over its coverage of a meat product the channel dubbed “pink slime”.   BPI is claiming the network damaged the company by misleading consumers into believing the product is unhealthy and unsafe.

The meat processor must prove the network knowingly published/broadcasted false information and intended to harm its business.  BPI’s attorney, Dan Webb, feels strongly that the company has a good chance of winning the case.  Some defamation experts, however, disagree.

The lawsuit seeks damages under South Dakota’s defamation law, as well as a 1994 state “veggie libel” law that allow businesses to sue anyone who knowingly spread false information about a perishable food product. BPI is seeking $1.2 billion in damages for roughly 200 “false and misleading and defamatory” statements about their meat.

The 257-page lawsuit names American Broadcasting Companies Inc., ABC News Inc., ABC news anchor Diane Sawyer and ABC correspondents Jim Avila and David Kerley as defendants. It also names Gerald Zirnstein, the USDA microbiologist who named the product “pink slime”; Carl Custer, a former federal food scientist; and Kit Foshee, a former BPI quality assurance manager interviewed by ABC.

ABC News denied BPI’s claims.  “The lawsuit is without merit and we will contest it vigorously “said Jeffrey W. Schneider, the news station’s senior vice president.

Filed in a South Dakota Union County Court, the claim cites network reports alleging the product was made with “low grade” meat, including “scraps” and “waste.” ABC News also allegedly said the beef was made from connective animal tissue, when, according to the lawsuit, it’s made from muscle.

Do you need an experienced trade libel attorney? Contact Kelly Warner Law.

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