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Speaker 1: After three weeks of sparring in a South Dakota courtroom,

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Speaker 1: ABC and a company known as b p I have

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Speaker 1: settled the pink slime lawsuit. ABC was accused of making

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Speaker 1: false statements about what bp I prefers to call lean

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Speaker 1: finely textured beef. The reports by ABC reporter Jim Avola

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Speaker 1: raised questions about the safety of the product, which is

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Speaker 1: basically beef trimmings that are processed and then added back

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Speaker 1: into the meat. While those weren't the first reports about

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Speaker 1: pink slime, they caused a backlash that caused bp I

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Speaker 1: sales to plummet. Bp I, which actually stands for Beef Products, Inc.

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Speaker 1: Said it's suffered almost two billion dollars in damages. With

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Speaker 1: us to talk about the settlement is Matthew shetton Helm.

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Speaker 1: He's a litigation analyst for Bloomberg Intelligence. Matt, thanks for

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Speaker 1: joining me here in Bloomberg Studio. The so the terms

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Speaker 1: of the settlement were not disclosed. Tell me what we

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Speaker 1: know or what we think we might know about how

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Speaker 1: much ABC had to pay here. We don't know. We

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Speaker 1: don't know very much at this point because the uh

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Speaker 1: the company's disclosed nothing about the terms of the settlement.

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Speaker 1: They did a confident confidentiality agreement that keeps these terms

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Speaker 1: under wrap. Uh. And we we do know that that

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Speaker 1: Disney did not make any disclosure to shareholders. In some cases,

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Speaker 1: in exceptional cases, company needs to immediately report file what's

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Speaker 1: known as an eight K to report those those numbers.

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Speaker 1: We didn't see anything like that here. What we may

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Speaker 1: see this is a this is a case that Disney

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Speaker 1: has reported to shareholders in each of its quarterly reports

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Speaker 1: for for a number of quarters. Now. I think we

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Speaker 1: may see see that in its next quarterly report, but

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Speaker 1: I don't. I'm I think it's unlikely we'll ever learn

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Speaker 1: the true amounts that that the company settled this case

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Speaker 1: for Matt. ABC's statement about the settlement, you know, included

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Speaker 1: a statement that they stand by their reporting, they think

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Speaker 1: it was accurate, etcetera, which you know, in some ways

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Speaker 1: is fairly standard stuff when you don't have an admission

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Speaker 1: of liability. But why do you think ABC settled the

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Speaker 1: case at this point? So so, I think ABC's biggest

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Speaker 1: problem here was that it had done everything it could

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Speaker 1: to avoid letting this case get to a jury. It's

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Speaker 1: been fighting this case from since, tried to move it

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Speaker 1: to federal court. It tried to move to dismiss the case,

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Speaker 1: It tried to move for summary judgment. None of those

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Speaker 1: efforts succeeded. And so what where where the company was

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Speaker 1: now was in a situation where the plaintiffs had a

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Speaker 1: tremendous home field advantage, if you will. Where this case

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Speaker 1: was being tried before a jury of eleven South Dakota

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Speaker 1: residents who might sympathize with with the claims of of

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Speaker 1: b p I about how the how the news media

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Speaker 1: had had impacted UH their industry. And so Disney was

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Speaker 1: ABC was facing the threats that this jury could come

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Speaker 1: back with with the damages award that was very significant.

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Speaker 1: As Greg said, one point nine billion dollars was was

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Speaker 1: was thrown out by b p I as the amount

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Speaker 1: they were harmed. There's the potential to even triple that

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Speaker 1: UH if bp I made made further showings. So if

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Speaker 1: Disney or ABC was going to win this case eventually

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Speaker 1: it was it was the real possibility that it was

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Speaker 1: going to take a long fight, and maybe not at

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Speaker 1: this stage, maybe only when you get to the appeal

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Speaker 1: stage to the supreme court in the state, maybe even

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Speaker 1: to the U. S. Supreme Court. And how about from

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Speaker 1: bp I standpoint, what what would have been that company's

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Speaker 1: motivations to settle? Sure, So, defamation cases are hard to win, Uh,

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Speaker 1: That's the bottom line of it. And so from the beginning,

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Speaker 1: bp I faced a very difficult, uh challenge in trying

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Speaker 1: to convince a jury. And and then you know, later

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Speaker 1: appellate courts not only that that Disney, that ABC said

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Speaker 1: something false, but that it did so um intentionally or

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Speaker 1: at least recklessly. This were guarding the truth of it.

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Speaker 1: And and while bp I had had, you know, some

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Speaker 1: some arguments about hey, they referred to us as pink slime,

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Speaker 1: Disney had had some pretty strong counter arguments as well,

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Speaker 1: that a lot of this activity had been reported by

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Speaker 1: others and that the First Amendment protects it's protects the

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Speaker 1: company's ability, you know, the news gathering organization's ability to

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Speaker 1: to uh deliver stories like this. So, Matt, we only

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Speaker 1: have about a minute left. But so is this going

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Speaker 1: to change the way news organizations approach this kind of

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Speaker 1: story going forward? I don't think so. I don't think so.

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Speaker 1: I mean, there's always a risk when there's a settlement

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Speaker 1: of a case like this of of sort of a

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Speaker 1: chilling effect that that news organizations are more reluctant to

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Speaker 1: run difficult or or risky stories. But I'd be surprised

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Speaker 1: if if that's really occurs here. I think this is

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Speaker 1: sort of a teaching moment where where where newsrooms can

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Speaker 1: sort have reaffirmed the lessons they already know about being

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Speaker 1: careful with sourcing, etcetera. If, if, if there's any lesson here,

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Speaker 1: I think maybe ABC could have gone too far in

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Speaker 1: the characterization of the product repeatedly as pink slime. The

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Speaker 1: company had, you know, maybe one of its strongest arguments

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Speaker 1: was was that the company referred to its product over

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Speaker 1: three hundred times as pink as pink slime, and uh,

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Speaker 1: you know that that sort of gave their case a boost.

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Speaker 1: I think the lesson here, if anything, is for new

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Speaker 1: newsrooms to perhaps be a little bit more careful in

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Speaker 1: framing their stories going forward. I want to thank Matt Chettenhelm,

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Speaker 1: he's a litigation analyst at Bloomberg Intelligence, for coming by

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Speaker 1: to talk to us about the settlement in the pink

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Speaker 1: Slime lawsuit.