In this high-profile $1.9 billion defamation case, Cornerstone Research worked with three experts who analyzed the impact of news coverage on beef product sales.
Retained by Winston & Strawn LLP
This closely watched defamation case, one of the largest ever filed in the United States, settled midway through trial after almost five years of litigation. The plaintiff, Beef Products Inc. (BPI), claimed $1.9 billion in damages, which were subject to trebling under South Dakota’s food disparagement law.
Counsel for BPI retained Cornerstone Research and three experts to assess causation, damages, and media content issues related to ABC News’s primetime broadcasts about BPI’s lean finely textured beef (LFTB) product. In the broadcasts, ABC News repeatedly described LFTB as “pink slime,” and as a cheaper filler that was approved over the objections of USDA scientists.
BPI alleged that ABC News engaged in a disinformation campaign and made numerous false statements about BPI and LFTB during its news broadcasts and in published reports. In the wake of the ABC broadcasts, the firm’s sales of LFTB dropped dramatically. BPI was forced to close three of its four manufacturing plants and laid off about 700 workers.
Cornerstone Research worked with three experts, in consumer behavior, content analysis and media, and agricultural economics, respectively.
Professor Ran Kivetz of Columbia University Business School showed that the ABC coverage of LFTB was extensive and negative. He conducted four surveys to study consumers’ perceptions in response to the ABC broadcasts. These consumer surveys showed that the ABC broadcasts communicated that LFTB was not beef, not nutritious, not safe, and that BPI had improperly obtained approval for the product.
Professor Kimberly Neuendorf of Cleveland State University showed that ABC’s coverage was unprecedented, both relative to other news coverage of LFTB and to ABC’s own coverage of other food-related events. She also performed an attribution analysis of tweets about “pink slime,” demonstrating that ABC News was the main driver of the social media conversation on that topic.
Professor Daniel Sumner of the University of California, Davis, an agricultural economist, projected but-for shipments and prices absent the ABC coverage. Using an event study approach, he developed a regression model that controlled for various factors that could affect LFTB demand and supply, including other media on the topic of “pink slime.”
BPI first filed suit in September 2012 and the case settled during trial in June 2017. During this time, Cornerstone Research assisted counsel at Winston & Strawn with many phases of the litigation, including a number of consulting projects, expert depositions, Daubert motions, and the preparation of direct and cross-examination materials for trial. Notably, the judge in the case admitted the testimony of all three Cornerstone Research experts, and either excluded or limited the testimony of several opposing economics and marketing experts.