Meat processor cuts deal with ABC in 'pink slime' defamation case

June 28 (Reuters) - Beef Products Inc has settled a closely watched defamation lawsuit against American Broadcasting Co and its reporter Jim Avila, the meat processor said on Wednesday.

BPI had claimed ABC, a unit of Walt Disney Co, and Avila defamed the company by calling its ground-beef product "pink slime" and making errors and omissions in a 2012 report.

The terms of the settlement were not disclosed.

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BPI's signature product, commonly mixed into ground beef, is made from beef chunks, including trimmings, and exposed to bursts of ammonium hydroxide to kill E. coli and other contaminants.

"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," South Dakota-based BPI 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."

5 PHOTOS
Ground-beef product labeled 'pink slime' by ABC News
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Ground-beef product labeled 'pink slime' by ABC News
Rich Jochum displays a package of lean, finely textured beef (LFTB) at the Beef Products Inc (BPI) facility in South Sioux City, Nebraska November 19, 2012. A year ago, Beef Products Inc. had four state-of-the art plants, more than 1,300 employees and was expanding aggressively. The meat company was the leading maker of "lean finely textured beef," a low-fat product made from chunks of beef, including trimmings, and exposed to tiny bursts of ammonium hydroxide to kill E. coli and other dangerous contaminants. Few Americans realized the product was a mainstay of fast-food burgers, school lunch tacos and homemade meatloaf. Today, the South Dakota company's revenues have plummeted from more than $650 million to about $130 million a year, and three of its plants are shuttered. Company officials blame the abrupt falloff on a series of ABC News broadcasts that began last March - stories that repeatedly called its product "pink slime." Photo taken November 19, 2012. REUTERS/Lane Hickenbottom (UNITED STATES - Tags: BUSINESS FOOD SOCIETY MEDIA)
Tanya Chavez measures a sample of lean, finely textured beef (LFTB) for oil, moisture and protein content at the Beef Products Inc (BPI) facility in South Sioux City, Nebraska November 19, 2012. A year ago, Beef Products Inc. had four state-of-the art plants, more than 1,300 employees and was expanding aggressively. The meat company was the leading maker of "lean finely textured beef," a low-fat product made from chunks of beef, including trimmings, and exposed to tiny bursts of ammonium hydroxide to kill E. coli and other dangerous contaminants. Few Americans realized the product was a mainstay of fast-food burgers, school lunch tacos and homemade meatloaf. Today, the South Dakota company's revenues have plummeted from more than $650 million to about $130 million a year, and three of its plants are shuttered. Company officials blame the abrupt falloff on a series of ABC News broadcasts that began last March - stories that repeatedly called its product "pink slime." Photo taken November 19, 2012. REUTERS/Lane Hickenbottom (UNITED STATES - Tags: BUSINESS FOOD SOCIETY MEDIA)
Lean, finely textured beef (LFTB) is produced at the Beef Products Inc (BPI) facility in South Sioux City, Nebraska November 19, 2012. A year ago, Beef Products Inc. had four state-of-the art plants, more than 1,300 employees and was expanding aggressively. The meat company was the leading maker of "lean finely textured beef," a low-fat product made from chunks of beef, including trimmings, and exposed to tiny bursts of ammonium hydroxide to kill E. coli and other dangerous contaminants. Few Americans realized the product was a mainstay of fast-food burgers, school lunch tacos and homemade meatloaf. Today, the South Dakota company's revenues have plummeted from more than $650 million to about $130 million a year, and three of its plants are shuttered. Company officials blame the abrupt falloff on a series of ABC News broadcasts that began last March - stories that repeatedly called its product "pink slime." Photo taken November 19, 2012. REUTERS/Lane Hickenbottom (UNITED STATES - Tags: BUSINESS FOOD SOCIETY MEDIA)
Boneless beef trimmings that average about 70% fat from which lean, finely textured beef (LFTB) is created from is pictured at the Beef Products Inc (BPI) facility in South Sioux City, Nebraska November 19, 2012. A year ago, Beef Products Inc. had four state-of-the art plants, more than 1,300 employees and was expanding aggressively. The meat company was the leading maker of "lean finely textured beef," a low-fat product made from chunks of beef, including trimmings, and exposed to tiny bursts of ammonium hydroxide to kill E. coli and other dangerous contaminants. Few Americans realized the product was a mainstay of fast-food burgers, school lunch tacos and homemade meatloaf. Today, the South Dakota company's revenues have plummeted from more than $650 million to about $130 million a year, and three of its plants are shuttered. Company officials blame the abrupt falloff on a series of ABC News broadcasts that began last March - stories that repeatedly called its product "pink slime." Photo taken November 19, 2012. REUTERS/Lane Hickenbottom (UNITED STATES - Tags: BUSINESS FOOD SOCIETY MEDIA)
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ABC stood by its reporting, which it has said deserved protection under the U.S. Constitution's First Amendment which guarantees freedom of religion, speech and the press.

"Throughout this case, we have maintained that our reports accurately presented the facts and views of knowledgeable people about this product," ABC said in a statement confirming the settlement.

"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."

13 PHOTOS
'Pink Slime' trial pits ABC against South Dakota meat processor
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'Pink Slime' trial pits ABC against South Dakota meat processor

The welcome sign is seen for the town of Elk Point, South Dakota, U.S. June 3, 2017.

(REUTERS/Ryan Henriksen)

A drive-through food truck, which is one of the few options for food along Main Street, is seen in Elk Point, South Dakota, U.S. June 3, 2017. 

(REUTERS/Ryan Henriksen)

A grain elevator is seen just behind the Union County Courthouse in Elk Point, South Dakota, U.S. June 3, 2017. 

(REUTERS/Ryan Henriksen)

A view shows Main Street in Elk Point, South Dakota, U.S. June 3, 2017. 

(REUTERS/Ryan Henriksen)

The Union County Courthouse on Main Street, where the defamation lawsuit of South Dakota meat processor Beef Products Inc. against ABC Broadcasting will be heard, is seen in Elk Point, South Dakota, U.S., June 3, 2017. 

(REUTERS/Ryan Henriksen)

A reflection is seen along Main Street after a passing storm in Elk Point, South Dakota, U.S. June 3, 2017. 

(REUTERS/Ryan Henriksen)

The water tower is seen along Main Street in Elk Point, South Dakota, U.S. June 3, 2017. 

(REUTERS/Ryan Henriksen)

The Union County Courthouse on Main Street, where the defamation lawsuit of South Dakota meat processor Beef Products Inc. against ABC Broadcasting will be heard, is seen at Elk Point, South Dakota, U.S., June 3, 2017.

(REUTERS/Ryan Henriksen)

The Union County Courthouse on Main Street, where the defamation lawsuit of South Dakota meat processor Beef Products Inc. against ABC Broadcasting will be heard, is seen at Elk Point, South Dakota, U.S., June 3, 2017. 

(REUTERS/Ryan Henriksen)

The BPI v. ABC trial schedule posted on the door of the Union County Courthouse, where the defamation lawsuit of South Dakota meat processor Beef Products Inc. against ABC Broadcasting will be heard, is seen in Elk Point, South Dakota, U.S., June 3, 2017. 

(REUTERS/Ryan Henriksen)

Modular buildings that have been placed in town to support the legal staff that will arrive in Elk Point, South Dakota, U.S. are seen on June 3, 2017. The defamation lawsuit of South Dakota meat processor Beef Products Inc. against ABC Broadcasting is set to begin on Monday, June 5, 2017. 

(REUTERS/Ryan Henriksen)

The Union County Courthouse on Main Street, where the defamation lawsuit of South Dakota meat processor Beef Products Inc. against ABC Broadcasting will be heard, is seen at Elk Point, South Dakota, U.S., June 3, 2017.

(REUTERS/Ryan Henriksen)

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The trial began earlier this month in the tiny town of Elk Point, South Dakota, and had been expected to last eight weeks.

BPI had claimed up to $1.9 billion in damages, which could have been tripled to $5.7 billion under South Dakota's Agricultural Food Products Disparagement Act.

During its reports, ABC used the term "pink slime" more than 350 times across six different media platforms including TV and online, Dan Webb, an attorney for BPI, said during opening statements on June 5.

In the aftermath of ABC's broadcasts, BPI closed three of its four processing plants and said its revenue dropped 80 percent to $130 million.

Attorneys for ABC countered that the term was commonly used before ABC's reports and said that BPI's business was already suffering. (Reporting by Timothy Mclaughlin in Chicago; Editing by Noeleen Walder and Phil Berlowitz)

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