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ABC News seeks to have $1.2 bln 'pink slime' U.S. defamation suit dismissed

By Michael Avok

ELK POINT, South Dakota, Dec 17 (Reuters) - Lawyers for ABC News asked a South Dakota circuit court judge on Tuesday to dismiss a $1.2 billion defamation lawsuit against it over coverage of a beef product dubbed by critics as "pink slime," as the news outlet stood by its reports and cited free speech protections.

Attorneys for Beef Products Inc, makers of "lean finely textured beef," argued that the case should go before a jury because ABC News agency knowingly defamed the company's product and damaged its business.

Judge Cheryle Gering took under advisement oral arguments from both sides in the high-profile case, one of the largest defamation lawsuits in U.S. history, and will issue a written ruling to the parties involved. She did not offer a timetable for her decision.

Once among the top producers of "lean finely textured beef," BPI of Dakota Dunes, South Dakota, said ABC News reports beginning in March 2012 cost it $400 million of profit by misleading consumers into believing the product is unsafe.

BPI says the product, made from beef chunks and trimmings and exposed to bursts of ammonium hydroxide to kill E. Coli and other dangerous contaminants, was mischaracterized as "pink slime" 137 times over four weeks in the ABC News reports and social media postings.

Actual damages could be tripled to more than $1.2 billion if ABC News were found liable under South Dakota's Agricultural Food Products Disparagement Act.

BPI attorney Erik Connolly said at Tuesday's four-hour hearing that ABC News, a unit of Walt Disney Co, was involved in a "prolonged disinformation campaign" that included 190 false statements.

"They knew they were causing a consumer backlash and they just kept doing it," Connolly said.

ABC News attorney Kevin Baine argued that ABC News never said the product was unsafe and the case should be dismissed because ABC has the right to use the term "pink slime." In court papers, ABC News has argued the lawsuit was a bid to chill media coverage of the food industry.

Its coverage reported on the use of the product as an additive in beef sold in U.S. supermarkets.

"It's about the freedom of a news organization to report on a matter of public interest," Baine said.

The case, which has been closely watched among both the agriculture and media communities, could put modern television journalism on trial and highlight the power of language in the Internet age. In the wake of the reports on "World News with Diane Sawyer," the term "pink slime" went viral.

BPI closed three of its four plants last year, laid off more than 650 employees and saw annual revenue plunge roughly 80 percent to $130 million from more than $650 million.

The case also underscores an intensifying war between the farm sector and its critics over how food is made.

Other defendants in the case include star ABC News anchor Diane Sawyer, two reporters who covered the story in March and April 2012, and two former U.S. Department of Agriculture employees and a former BPI employee who were interviewed and quoted in ABC's coverage.

BPI had no comment after the hearing. ABC News could not be immediately reached for comment.

The case is Beef Products Inc et al v. American Broadcasting Cos et al, Circuit Court of South Dakota, Union County, No. 12-292.