Pink Slime - What is REALLY in your Hamburger - ABCNews.com(Links to an external site.)

In 2012, ABC news ran a story regarding BPI, a South Dakota meat processing company, describing the company's ground-beef product as pink slime. The company sued ABC News for defamation claiming that the term nearly put the company out of business, forcing them to close down several plants (3 out of 4 plants) due to a decrease in revenue (a drop of 80%) as a result of the report.

The company sued ABC for $5.7 billion dollars, claiming that ABC, and its reporters Diane Sawyer and Jim Avila, defamed the company by using the term "pink slime" and making errors and omissions in its 2012 reporting. The company argued that it took 30 years to succeed in the industry and it took ABC less than 30 days to damage the company irreparably.

But ABC lawyer argued there was no defamation because "pink slime" was a common term, used more than 3,800 times in the media prior to ABC's reports. They also claimed that the company already lost customers prior to the report due to the unhappiness with the product. ABC claimed their coverage was accurate and deserved first amendment protection. Diana Sawyer, when deposed for the case, stated: "I read the script and it seemed to be factual and fair and seemed to be credible reporting."

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(1) Is thereport considered defamatory? Product disparagement?Why or why not?

(2) Please provide a definition of defamation and apply the case to all elements of defamation to form the basis for your answer.

(3) Why do we have defamation laws in this country?

(4) Is it federal or state law?