ABC News is Still Getting Slimed
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ABC News can't seem to get the pink slime back in the tube.
This Summer ABC News reached a settlement in regards to its 2012 report about the beef sold to consumers.
Beef Products Inc. sued ABC for their "pink slime" story and while the trial was going on, ABC settled the case with Beef Products Inc. The settlement was for around $200 million bucks. BPI was going for over $5 billion.
But now, ABC insurance company AIG is suing the network for how they handled the story.
On Thursday, AIG Specialty Insurance Company sued The Walt Disney Co., ABC and correspondent Jim Avila. The insurer seeks a declaration that it doesn't have to cover the BPI settlement.
The Hollywood Reporter writes that AIG acknowledges that the policy covers defamation claims, but alleges that a "carve-out" applies when ABC defames with "actual malice" unless the network obtained an advance written opinion from outside counsel concluding that whatever was to be said was legal.
"The reason for this is obvious," states AIG's complaint. "If an insured consults outside counsel concerning potentially defamatory statements prior to making them, the insured will be less likely to engage in conduct that gives rise to liability. In order to incentivize insureds to consult with counsel, the CSIC policy provides coverage to an insured that consults with counsel even if the counsel's advice ultimately proves incorrect. On the other hand, if an insured publishes defamatory content about a public figure with actual malice without having consulted outside counsel (or against the advice of outside counsel), then the insured bears the responsibility for his reckless conduct."
This essentially means that ABC is now back in court over whether its reporting was reckless. The stakes may only be $25 million this time rather than $5.7 billion, but nevertheless, the newest "pink slime" dispute raises an important question about what news organizations must do to immunize themselves from legally hazardous reports about public figures. That is, assuming other news outlets have similar insurance policies.
The complaint that AIG has filed is filled with redaction, so not everything is entirely clear, but it does appear from AIG's lawsuit that Disney/ABC is raising the argument that consulting with outside counsel is unnecessary so long as the conclusion is drawn of no malice. According to AIG, the news organization is contending that the proper standard is what's "commercially reasonable."
AIG rejects this.
A Disney spokesperson comments, "Rather than honor the terms of the insurance policy it sold us, AIG has chosen instead to evade those terms and attack its customer. We will vigorously pursue our right to recover.”
