Summary: The parent company of ABC News made a historically large payout, according to CNN.
In 2012, ABC News aired a series of news reports that said Beef Products Inc. (BPI) used a finely textured beef product, which the news organization referred to as “pink slime.” The South Dakota-based company said that the segments damaged its business with the disgusting name and sued the network for almost $5.7 billion.
After years of battling, BPI arguably won its defamation lawsuit in June, and CNN reported that ABC News’ parent company Disney has already shelled out at least $177 million for the case.
BPI said that finely textured beef product is a common ingredient in food, but that ABC’s negative and misleading portrayal of it cost the company business and damaged its reputation. According to BPI’s legal team, almost 700 employees were let go after the pink slime report.
The sum of $177 million is reportedly almost one year of ABC’s evening news program’s revenue, and it has been predicted to have gone to paying legal fees and other related matters.
This high-profile settlement is announced at a time when other defamation lawsuits have also successfully been argued in favor of the plaintiffs. For instance, Hulk Hogan bankrupted Gawker in his defamation lawsuit, and celebrities such as Rebel Wilson and Blake Shelton have won amounts from publications that have reportedly been in the millions.
Leonard Niehoff, a law professor at the University of Michigan, said that the pink slime settlement could inspire others to also sue media companies.
“Defamation litigation brings with it real risks. Jurors are not always sympathetic with the media. And even the most fair-minded of jurors may struggle to apply complex First Amendment principles to the facts of the case,” Niehoff said to CNN.
Niehoff said that potential plaintiffs may become motivated by money with these famously big settlements, and he said that there was danger in that.
“Large settlements are worrisome because they may lead some plaintiffs and lawyers to think of media entities as easy get-rich-quick targets,” Niehoff added. “This is wrong, because the legal protections are strong and most media entities are hesitant to settle. But we often see an uptick in cases after big verdicts or settlements, even if those cases do not have merit.”
BPI and Disney/ABC had a defamation trial in June in South Dakota, but before a jury could rule a verdict, the two sides reached an unknown settlement. ABC News said that it stood by its reporting but that it wanted to avoid any more litigation.
CNN stated that the $177 million may not even be all of the settlement, but it is unclear what the actual terms were. The disclosure of $177 million was listed in Disney’s annual earnings report, but the rest of the settlement terms remain a mystery.