SIOUX FALLS, S.D., June 13, 2013 - A legal battle continues between Beef Products Inc. and ABC News, and the $1.2 billion lawsuit has been returned to state court.

A federal judge ruled on Tuesday that the lawsuit should be returned to a Union County Circuit Court in South Dakota after ABC sought to move the case to a federal court. As the defendant, ABC argued to move the case on the basis of diversity jurisdiction, which can be applied when a plaintiff and defendant share citizenship within the same state. 

Since the lawsuit was not only filed by BPI, but also BPI Technology Inc. and Freezing Machines, Inc., ABC argued that since BPI Tech and FMI are both incorporated in Delaware, where ABC is also incorporated, this meant the case had to be moved to a federal court due to diversity jurisdiction.

In her decision, Judge Karen Schreier said the argument of the defendants is “putting the cart before the horse.”

“Defendants’ argument, however, 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,” the decision reads. “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.”

The court also said since BPI Tech is a “real party in interest,” complete diversity of citizenship “does not exist between plaintiffs and defendants.”

The case stems from labeling of lean finely textured beef (LFTB) as “pink slime” in ABC News reports in the spring of 2012. In September of 2012, BPI, BPI Tech, and FMI jointly filed a lawsuit against ABC News, it’s parent company, as well a six people within the company, including network anchor Diane Sawyer, alleging “defamation, product disparagement, and tortious interference with business relationships.” 

Since the spring of 2012, BPI claims to have lost 80 percent of it’s business and has had to lay off 700 people. The Dakota Dunes, S.D. based company was once the world’s largest producer of lean boneless beef. 


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