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Makers of 'Pink Slime' blame ABC for the layoff of 700 workers

It is difficult to stay in business in New Jersey, or anywhere else in the country, without ever entering into a dispute. This might be a problem with a competitor, supplier, customer or any other person or entity the business comes into contact with. Often, it is best to resolve these disputes in mediation or arbitration environments, in order to save money and minimize publicity. However, sometimes litigation is necessary.

This is the route that a beef company recently took in response to what it believes was a defaming and highly damaging news report. Beef Products Inc. has sued ABC News for defamation after the news organization's report on a product that has been called "Pink Slime" reportedly resulted in the company's bankruptcy and the closure of three of its four plants. Seven hundred workers were laid off.

ABC News began reporting on a product that the company makes, which is made from beef trimmings and treated with ammonium hydroxide, earlier this year. Soon after ABC reported on the product, other media outlets followed suit. Beef Products took a major hit from consumer backlash in the aftermath of these reports.

The company is seeking $1.2 billion in damages in an addition to an undisclosed amount of punitive damages, and it names ABC News, anchor Diane Sawyer and reporter Jim Avila as defendants.

If the information reported in the ABC project was factual and legally sourced, Beef Products may have no case here. However, the beef company argues in its lawsuit that ABC misled people into believing that their product was not safe, even though it has been deemed safe and approved by the U.S. Department of Agriculture.

Furthermore, the lawsuit states that the news report contained 200 false statements about the company and its product.

The outcome of this case remains to be seen, but it is an example of how litigation is sometimes necessary in order to protect the viability of a business.

Source: Los Angeles Times, "Beef Products Inc. sues ABC News for defamation over 'pink slime,'" Ricardo Lopez, Sept. 13, 2012

  • Our firm handles business mediation, arbitration and litigation cases. To learn more about our practice, please visit our New Jersey Business Litigation page.

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