High-Profile $1.9 Billion Defamation Case Settles

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After almost five years of litigation, Beef Products Inc. and American Broadcasting Companies settled one of the largest defamation cases ever filed in the United States.

Chicago, Ill.—In this closely watched defamation case, Cornerstone Research worked with three experts who analyzed the impact of news coverage on consumer perceptions and beef product sales. Expert analyses of Twitter and other online commentary played a key role—highlighting the increasing importance of social media in modern litigation.

Beef Products Inc. (BPI) claimed $1.9 billion in damages in response to ABC News’s primetime broadcasts about BPI’s lean finely textured beef (LFTB) product. ABC News repeatedly described LFTB as “pink slime,” and as a filler that was approved over the objections of USDA scientists. In the wake of the broadcasts, BPI’s sales of LFTB dropped dramatically. The firm closed three of its four manufacturing plants and laid off about 700 workers.

Counsel for BPI retained Cornerstone Research and Professor Ran Kivetz of Columbia University, Professor Kim Neuendorf of Cleveland State University, and Professor Daniel Sumner of the University of California, Davis, to assess causation, damages, and media content issues.

“The testimony and analysis by Drs. Kivetz, Neuendorf, and Sumner exceeded our high expectations. They mastered the many details and presented them in a clear narrative for the jury.”

—J. Erik Connolly, Winston & Strawn LLP

Professor Kivetz conducted four surveys to study the effect of the ABC broadcasts on consumers’ perceptions. As he testified at trial, the surveys showed that the broadcasts communicated to consumers that LFTB was not beef, not nutritious, not safe, and that BPI had improperly obtained approval for the product.

In her testimony, Professor Neuendorf demonstrated that ABC’s coverage of LFTB was unprecedented. She also performed an attribution analysis of tweets about “pink slime,” showing that ABC News primarily drove the social media conversation on that topic.

Using an event study analysis, Professor Sumner projected but-for shipments and prices of LFTB absent the ABC coverage. He developed a regression model that controlled for various factors that could affect demand and supply, including other news and media coverage of the story.

“We knew that expert testimony would be an important part of our case. The testimony and analysis by Drs. Kivetz, Neuendorf, and Sumner exceeded our high expectations. They mastered the many details and presented them in a clear narrative for the jury. The Cornerstone Research team supporting the experts and working with us was invaluable before and during the trial,” said J. Erik Connolly of Winston & Strawn LLP.

BPI first filed suit in September 2012 and the case settled during trial in June 2017. Counsel described the outcome as “a historic victory” and noted that “the settlement vindicates BPI and puts the company on the path to recovery.”

Contact

Jason Milch
Baretz+Brunelle
312.379.9406
jmilch@baretzbrunelle.com
Terri Viera
Cornerstone Research
650.470.7117
tviera@cornerstone.com