Disney this week reported spending $177 million to settle litigation during the quarter in which the dispute between Beef Products Inc. — makers of the now-infamous “pink slime” — and Disney subsidiary ABC News was resolved. The terms of the agreement were not disclosed, but the new report means that the settlement is the largest in a defamation case in U.S. history.
BPI sued ABC News after a 2012 report on “lean finely textured beef,” which is made of low-quality meat chunks mixed with ammonia to kill off bacteria. The buttressed beef has an artificial, gooey appearance similar to pink intestines, which upset consumers across the country after the report aired. The U.S. Department of Agriculture considers the product to be beef, and it is frequently added to other ground beef products, often without distinct labeling.
After ABC reported on the product, grocery stores, restaurants, and even school lunch programs rushed to declare that they would stop using the product.
As the leading manufacturer of the product in the U.S., BPI took a massive hit to their profits. The company shuttered three of their four factories in 2012, and production dropped from five million pounds per week to less than one million at the height of the panic. BPI sought nearly $2 billion in damages in their lawsuit against Disney.
The two companies reached a settlement in June, but the terms were not disclosed. The new figure comes from a footnote in Disney’s quarterly earnings report, and the amount may include other legal costs and related charges. But BPI attorney Dan Webb told CNN that the actual settlement amounted to an even greater sum, some of which will likely be covered by Disney’s insurance, explaining the disparity in cost.
Even for a conglomerate entertainment company like Disney, $177 million is nothing to brush off. Webb confirmed to CNN that even that amount would represent the largest settlement ever paid in a media defamation case in the United States, making this epic lawsuit one that will go down in history — all because of some gross looking beef.