The Dakota Dunes, S.D.-based meat processor is seeking $1.2 billion in damages for roughly 200 "false and misleading and defamatory" statements about the product officially known as lean, finely textured beef, said Dan Webb, BPI's Chicago-based attorney.
The lawsuit filed in a South Dakota state court also names several individuals as defendants, including ABC news anchor Diane Sawyer and the Department of Agriculture microbiologist who coined the term "pink slime."
The company's reporting "caused consumers to believe that our lean beef is not beef at all -- that it's an unhealthy pink slime, unsafe for public consumption, and that somehow it got hidden in the meat," Webb said before the company's official announcement.
ABC News, owned by The Walt Disney Co., denied BPI's claims.
"The lawsuit is without merit," Jeffrey W. Schneider, the news station's senior vice president, said in a brief statement Thursday. "We will contest it vigorously"
The 257-page lawsuit names American Broadcasting Companies, Inc., ABC News, Inc., Sawyer and ABC correspondents Jim Avila and David Kerley as defendants. It also names Gerald Zirnstein, the USDA microbiologist who named the product "pink slime," Carl Custer, a former federal food scientist, and Kit Foshee, a former BPI quality assurance manager who was interviewed by ABC.
The "defendants engaged in a monthlong vicious, concerted disinformation campaign against BPI," the lawsuit claims.
The reports cited in the lawsuit include 11 that aired on television and 14 that appeared online between March 7 and April 3.
Webb said the reports had "an enormous impact" on the company, forcing it to close three of its four U.S. plants and lay off more than 650 workers. Webb said the network also published a list of chain grocery stores that had stopped selling the product, and that this pressured others to end their business relationship with BPI.
Craig Letch, BPI's director of food-quality assurance, said the company lost 80 percent of its business in 28 days. Some of the customers have returned, he said, but BPI still doesn't have the customer base that would allow it to rehire former employees.
Webb said the reports created the false impression "that it's some type of chemical product, that it's not beef. It led people to believe that it's some kind of repulsive, horrible, vile substance that got put into ground beef and hidden from consumers."
"The result of that has been catastrophic for this company," he said.
BPI has previously declined to discuss how much it lost in sales, but acknowledged it took a "substantial" hit.
Critics worried about the way the meat is processed. Bits of beef are heated and treated with a small amount of ammonia to kill bacteria, a practice that has been used for decades and meets federal food safety standards. The phrase "pink slime" began to spread after The New York Times cited it in a 2009 article on the safety of meat processing methods.
Soon afterward, celebrity chef Jamie Oliver began railing against it. McDonald's and other fast food companies stopped using it, and major supermarket chains including Kroger and Stop & Shop vowed to stop selling beef with the low-cost product.
An online petition calling for the banning of the product from school menus drew hundreds of thousands of supporters.
The U.S. Department of Agriculture has said the vast majority of states participating in its National School Lunch Program have opted to order ground beef that doesn't contain the product. Only three -- Iowa, Nebraska and South Dakota -- chose to order beef that may contain it.
The uproar prompted Beef Products to suspend operations at plants in Amarillo, Texas; Garden City, Kan.; and Waterloo, Iowa. Beef Products' plants in Iowa and Kansas each produced about 350,000 pounds of lean, finely textured beef per day, while the one in Texas produced about 200,000 pounds a day.
The company has won support from the governors of Iowa, Nebraska, Kansas, Texas and South Dakota. U.S. Agriculture Secretary Tom Vilsack has also defended the product, saying the federal government wouldn't allow the product if it was unsafe.
The company has launched its own public relations offensive, including a website -- www.beefisbeef.com -- to advocate for the product.
Associated Press writer Kristi Eaton contributed from Sioux Falls, S.D.