Court Allows Most Claims in LFTB Suit to Proceed
A South Dakota court has determined that most of the claims filed by the makers of lean finely textured beef (LFTB) against ABC News, certain news correspondents, including Diane Sawyer, and former U.S. Department of Agriculture (USDA) employees may proceed. Beef Prods., Inc. v. Am. Broadcasting Cos., Inc., No. 12-292 (Union Cty. Cir. Ct., S.D., order entered March 28, 2014). Information about the lawsuit appears in Issue 453 of this Update.
While the court found the plaintiffs’ claims for common law disparagement preempted by a state statute addressing the elements of a disparagement cause of action, available relief and statute of limitations, it limited its dismissal with prejudice to those alleged tortious statements expressly stating or implying that the product is not safe for human consumption.
As to the defamation claims, the court found that the three plaintiffs were appropriate parties because the complaint sufficiently alleged that people who heard the allegedly defamatory and disparaging statements “would understand that all three of the Plaintiffs were the persons being referred to by the Defendant’s alleged tortious statements regarding LFTB.” The court also rejected the defendants’ claims that their statements were not statements of fact and thus were not actionable, finding that most of the statements were “objective facts capable of being proven true or false,” rather than “unrealistic exaggeration,” hyperbolic statements, epithets, or “expressions of disapproval.”
The court further stated in this regard, “the news reports were touted as being investigative reports based upon information from USDA scientists, Zirnstein and Custer, and a former employee of [plaintiff] BPI, Foshee.” The court rejected the defendants’ claims that various statements made during the national TV broadcasts were true, stating “Defendants are not insulated from liability by the fact that the Defendant ABC News reports may have also stated in some form during the news reports that LFTB is beef, LFTB is safe, and/or LFTB is nutritious. . . . [A] reasonable factfinder could find that the statements are defamatory and/or disparaging despite any accompanying qualifying or non-tortious statements.” The court also allowed tortious interference with business relationship claims to proceed, finding the elements sufficiently pleaded.
Finally, the court addressed the motions to dismiss for lack of personal jurisdiction as to former USDA employees Gerald Zirnstein and Carl Custer who claimed limited contacts with the state and a single ABC on-camera interview to negate the element of activities purposefully directed at the forum state or its residents. The court found that the exercise of personal jurisdiction comports with due process because they knew their statements would affect South Dakota businesses, Zirnstein coined the derogatory term “pink slime” and both not only made statements that would be broadcast nationally but commented extensively about LFTB online—via webpage comments, Facebook posts and posts on meatingplace.com, Google Group Foodsafe, and foodpolitics.com. The court also found the exercise of personal jurisdiction to be reasonable given likely jurisdiction in any number of states where the plaintiffs do business and the efficiencies of bringing one lawsuit in one jurisdiction.