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'Pink Slime' Lawsuit Cost Disney $177 Million

The broadcaster has settled a lawsuit with a meat processor that was seeking almost $2 billion in damages.

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UPDATE

ABC's parent company Disney disclosed to investors Wednesday, August 9 that it had paid $177 million "in connection with the settlement of litigation." The company did not disclose exactly what litigation it was resolving with this payout.

The $177 million figure is also "net of committed insurance recoveries," meaning that the ultimate figure paid out to Beef Products could be more. A BPI lawyer told CNN that the settlement was for more than $177 million.

Spokespeople for ABC News and BPI did not immediately respond to a request for comment from BuzzFeed News

A years-long legal battle that threatened ABC News with the prospect of billions of dollars in damages has been settled out of court, the news outlet said today, just weeks after the trial began in South Dakota.

Beef Products sued ABC News in 2012 over stories that described its product, known in the meat industry as "lean finely textured beef," as "pink slime" — a form of meat "used in dog food and cooking oil, now sprayed with ammonia to make them safe to eat and then added to most ground beef as a cheaper filling."

Many schools and grocery stores stopped buying ground beef that contained the company's product, amid a public outcry over "pink slime" that began long before ABC News ran its stories. Beef Products blamed three plant shutdowns and 700 laid-off employees on ABC's coverage, and its original lawsuit claimed defamation and disparagement and sought over $1 billion in damages.

Disney, ABC's parent company, later said the damages could be as high as $1.9 billion. South Dakota law allows for payouts to be tripled in civil suits involving the spreading of false information about food products, meaning the total hit could have reached almost $6 billion.

But on Wednesday, ABC News announced it had reached "an amicable resolution of its dispute" with Beef Products. The broadcaster declined to give further details on the nature of the settlement, including whether any money is changing hands.

"Throughout this case, we have maintained that our reports accurately presented the facts and views of knowledgeable people about this product," a spokesperson said. "Although we have concluded that continued litigation of this case is not in the Company’s interests, we remain committed to the vigorous pursuit of truth and the consumer’s right to know about the products they purchase.”

By midday on Wednesday, the stories that Beef Products sued over were still available on the ABC News website, with no correction or apology attached to them.

"We are extraordinarily pleased to have reached a settlement of our lawsuit against ABC and Jim Avila. While this has not been an easy road to travel, it was necessary to begin rectifying the harm we suffered as a result of what we believed to be biased and baseless reporting in 2012," Beef Products said in a statement. "Through this process, we have again established what we all know to be true about Lean Finely Textured Beef: it is beef, and is safe, wholesome, and nutritious."

In a page on its website entitled "Lean Finely Textured Beef — Why it's Good," Beef Products says the meat product "is a key ingredient to making low fat ground beef or any other food in which lean finely textured beef is an essential ingredient."

UPDATE


Matthew Zeitlin is a business reporter for BuzzFeed News and is based in New York. Zeitlin reports on Wall Street and big banks.

Contact Matthew Zeitlin at matt.zeitlin@buzzfeed.com.

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