ABC News wants pink slime lawsuit moved to federal court By Martha Graybow and P.J. Huffstutter Wed Oct 24, 2012 8:15pm EDT (Reuters) - ABC News sought on Wednesday to move to federal court a meat processor's defamation lawsuit over reports about lean finely textured beef, a product that critics have labeled "pink slime." Lawyers for the network filed to transfer the case, brought last month by Beef Products Inc, the leading producer of the product, from of a state court in South Dakota and to a federal court in the state. BPI is seeking $400 million in compensatory damages for lost profit it says was caused by ABC's reports. The damages could be tripled under South Dakota's Agricultural Food Products Disparagement Act. The company is also seeking punitive damages. Neither Dan Webb, BPI's attorney, nor a company spokesman could be reached for comment on Wednesday. ABC, a unit of Walt Disney Co, said previously the lawsuit was without merit. In addition to suing ABC News, South Dakota-based BPI has also sued ABC News anchor Diane Sawyer and two reporters who covered the story, Jim Avila and David Kerley. Other defendants include Gerald Zirnstein, a former U.S. Department of Agriculture microbiologist credited with coining the term "pink slime" in a 2002 email to colleagues later obtained by The New York Times. Defendants sometimes prefer to fight lawsuits in federal courts where procedures are more standardized, rather than in state courts. Disagreements over where a lawsuit belongs can slow down a case in the early stages. BPI is the nation's largest producer of lean finely textured beef, a product used in ground beef that is made from trimmings and on which ammonia is used to remove potential pathogens. In March and April, ABC aired a series of television reports on BPI's product, raising questions about its quality and sparking a public relations furor that roiled social media, consumer advocates and the nation's beef industry. A number of fast-food restaurants and grocery retailers - including Walmart Stores Inc, Safeway Inc and Supervalu Inc - also stopped selling ground beef containing the product, even though the U.S. Department of Agriculture and industry experts say it is safe to eat. BPI contends that ABC falsely and repeatedly characterized the product as an unsafe and unsavory "pink slime" in an effort "to incite and inflame consumers" against it. The processor says the product is safe, healthy and "100 percent beef." The reports caused the company to lose hundreds of millions of dollars in sales, shut down three of its four plants and lay off roughly half of its employees, BPI said in its September 13 complaint. In its court papers on Wednesday, ABC filed a removal notice to shift the case from Union County Circuit Court in South Dakota to the federal district court for the District of South Dakota, Southern Division. Typically, if a party to litigation is successful in such a transfer, a case would proceed in the federal court system under federal procedural rules. If the case were to go to trial, a federal judge and jury would hear it. The case is Beef Products Inc et al v. American Broadcasting Cos et al, Circuit Court of South Dakota, Union County, No. (Reporting By Martha Graybow in New York and P.J. Huffstutter in Chicago.