This material, known as lean, finely textured beef or 'pink slime,' has ignited a huge meat controversy. Credit: pennstatenews on Flickr

Beef Products, Inc., makers of the infamous lean finely textured beef, or what has been called “pink slime”,  settled two cases recently and now faces a South Dakota court over $1.2 billion defamation case.

A U.S. District Court judge on June 12 ruled that BPI’s $1.2 billion defamation lawsuit against ABC News and others should be moved back to state court, where the suit was initially filed last September.

Beef Products, Inc. gained national media attention last fall when it filed the lawsuit against ABC News. BPI claims that ABC’s coverage of lean finely textured beef was unfair and led to the closure of three plants and loss of work for more than 700 BPI employees.

The case was filed in South Dakota state court, under the state’s agriculture disparagement law. Defendants sought to have it moved to federal court, but BPI pushed back.

The ruling, by Judge Karen E. Schreier of the Southern District of South Dakota, could be seen as a victory for the beef company. The move to change the venue to federal court was seen as an attempt by ABC News to find a more sympathetic court. Keeping the case in South Dakota helps BPI due to the language of the state’s ag disparagement law.

ABC had argued the case should be in federal court because the defendants were in multiple states.

Judge Schreier dismissed ABC News’s argument, saying that it not only went against legal precedent, “it also goes against reason.”

Schreier said: “Defendants’ argument … proposes that the court first entangle itself with the facts of the case in order to make a legal determination about whether BPI Tech’s claim has merit. Put simply, defendants are suggesting that the court make a determination about the merits of BPI Tech’s claim before even deciding whether it has the authority to make such a determination. This is putting the cart before the horse.

“Thus, the court finds that BPI Tech is a real party in interest. Because BPI Tech is a real party in interest, complete diversity of citizenship does not exist between plaintiffs and defendants. Accordingly, it is ordered that … the Clerk of Court will remand this case to the Circuit Court of Union County, South Dakota, from which it was removed.”

In response to the decision, Erik Connolly, a partner with Winston & Strawn law firm in Chicago and one of BPI’s attorneys, said: “We originally filed the case in state court because that was the proper jurisdiction.  The Court’s decision confirms we were correct.  We look forward to presenting our case in state court.”

In a statement to Reuters an ABC spokesman said:  “This is purely a decision on what court will hear the case. The court stated that ABC and the other defendants have the right to move to dismiss the case in the state court, and ABC intends to do just that.”

In addition to the defamation suite, BPI has been fighting other legal battles.

On April 30, a confidential settlement was announced in the case over the death of Robert Danell. Danell, who had Downs Syndrome, ate tainted beef before his death in January 2010. The beef was linked to a 17 state E. coli outbreak that hospitalized 25 people.

BPI was named as a co-defendant along with JBS Swift and Tyson Fresh Meats which has plants in Illinois, Kansas and Texas. Beef involved in the recall include mechanically tenderized steaks and ground beef.

Danell’s family said he ate Tyson ground beef during day visits to a Catholic charity where he worked. The ground beef had been processed at a BPI facility. The family was represented by food safety law firm Marler Clark, which underwrites Food Safety News. The firm also is representing two former USDA employees in a defamation lawsuit filed by BPI that is linked to the ABC News lawsuit.

Just days earlier BPI agreed to pay $450,000 in a civil penalty for a 2007 incident that led to the death of an employee at its Waterloo, Iowa plant.  The Environmental Protection Agency cited a lack of a sufficient risk management plan by BPI led to the death.

More than 1,000 pounds of anhydrous ammonium were released into the plant floor. This ammonium is used in refrigeration cooling – not to be confused with the ammonium hydroxide used by BPI to treat its ground beef product.

The fine is for violating the Clean Air Act and not a settlement for the death of the worker. BPI has 90 days from the announcement to develop a plan to correct the problems, and then one year to implement the plan, according to the E.P.A. new release.

“BPI worked with the EPA to resolve past concerns regarding refrigeration systems used at the company’s plants in three states,” said Connolly. “BPI agreed to enhance its existing controls to include additional programs consistent with Risk Management Plan requirements of the federal Clean Air Act at the company’s facilities.  The new program is based upon existing Risk Management Plans for BPI’s refrigeration systems, which use anhydrous ammonia as a refrigerant.”

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