BPI sues ABC for $1.2 billion
(DAKOTA DUNES, SD) - Beef Products Incorporated, the makers of Lean Finely Textured Beef, filed a $1.2 billion defamation lawsuit against ABC News for what it called a "disinformation campaign" against the company.
At a press conference, attorney Dan Webb of Winston and Strawn LLP said ABC engaged in a "long-term, sustained vicious attack" on BPI with a series of stories that referred to LFTB as "pink slime," a term originally used in a 2009 New York Times article about LFTB.
Calling ABC "one of the most powerful news outlets in the world," Webb said ABC's reporting was "unparalleled in American history."
BPI executive Rich Jocum said the company lost 80% of its business in 28 days, but added the company has no plans to file for bankruptcy. In the wake of the "pink slime" controversy, BPI shut down operations at facilities in Iowa, Texas, and Kansas, and cut back production at its main facility in South Sioux City, Nebraska.
In a statement, ABC News Senior Vice President Jeffrey Schneider said, "The lawsuit is without merit," and promised to fight it in court.
In addition to the ABC network, the lawsuit also names ABC anchor Diane Sawyer and two reporters, Jim Avila and David Kerley. BPI is also suing two former USDA employees who talked to ABC, Gerald Zirnstein and Carl Custer, along with a former BPI executive, Kit Foshee.
For the first time since the LFTB controversy began, the lawsuit also revealed the extent of BPI's financial losses. The lawsuit says LEFTB sales have plunged from 5 million pounds a week to 1.6 million, leading to an operating an average weekly operating loss of $583,000.
The lawsuit projects lost revenue of $400 million over 5 years. Under South Dakota's "food libel" law, BPI is asking for treble damages, for an additional $800 million, plus punitive damages to be determined later.
(DAKOTA DUNES, SD) BPI is suing ABC news for more than 1 billion dollars.
The maker of Lean Finely Textured Beef is going to court, against ABC, Diane Sawyer, two reporters, and three sources ABC used in its stories.
"ABC used that term, "pink slime" to refer to my clients product over 130 times," says BPI's Lawyer, Dan Webb.
BPI's Lawyer, Dan Webb, says ABC's coverage Over a 28 day period, caused hundreds of millions of dollars in damage to the company and its employees.
"Calling something Pink slime, clearly implies that the food product is unsafe for human consumption, it's not nutritious and it's not safe. That is false," says Webb.
ABC wasn't the first news outlet to use the term, "pink slime." It originally surfaced publicly back in 2009, in a New York Times article, But Webb says, it was the repetitive nature of ABC's coverage that brought BPI to its knees.
"This is a responsible company, were not gonna go out and sue everybody under the sun who says something about our product we don't like. The only reason we sued ABC, is they made a choice to turn this into this sustained, long running, repetitive conduct, that's decimated the product in the market place," says Webb.
And for the first time ever, BPI released the breakdown in dollars and cents. According to the lawsuit, ABC's coverage cost BPI 140 million dollars in revenue so far. That means BPI is operating 580 thousand dollars in the red, every week. BPI says, over the next five years, it will lose over 400 million dollars in profits. The company also closed three out of 4 manufacturing plants, and laid off over 700 employees.
Craig Letch, the director of Food safety and quality assurance at BPI, says when they had to let their employees go, the number one question asked was why?
"We don't understand why this happened. This wasn't tied to a food borne illness outbreak. This wasn't tied to a quality issue; this wasn't tied to consumer health. This was tied to a misinformation campaign that was waged against this family of companies against ABC. And they won, they succeeded," he said.
And Nick Roth, the son of BPI's Founder Eldon Roth, says the last 7 months have been tough on their family.
"Its absolutely been a difficult time , for us in our family and for the whole company, literally losing 70 percent of our sales and closing three plants and having to tell 700 people they no longer have a job. Its heartbreaking really, Its been a difficult thing to overcome," says Nick Roth.
But Webb says BPI's day in court, will be vindication for those employees.
"The bottom line, is that there will come a day in this case when we are going to go before a jury right here in South Dakota, and we are going to ask for justice for what happened to this company and the people that run it," says Webb.
In addition to going after ABC and its reporters, BPI is also suing two former USDA workers, and a former BPI employee, who all talked to ABC on camera.