ABC Faces Another Lawsuit Related to 'Pink Slime' Case

ABC's investigative reports on "pink slime" are back in the headlines after the one of the network's insurance groups filed a $25 million lawsuit against them over the 2012 controversy.

Beef Products Inc. filed a multibillion dollar claim in South Dakota after ABC, owned by The Walt Disney Co., ran a series of reports on lean finely textured beef, which it called "pink slime." The reports alleged that the meat was unsafe, lacking in nutrition and wasn't really meat.

The trial began this year but was settled outside of court in June. The terms of the deal were not disclosed, but the company claimed $177 million in legal expenses in August, most of which was accrued from the suit.

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As a result, AIG Specialty Insurance Company filed a lawsuit against The Walt Disney Co., ABC and correspondent Jim Avila last week, contesting that it shouldn't have to pay the network's $25 million insurance claim from the defamation settlement, Variety reports.

AIG laid out its complaint Thursday, noting that the company's agreement states that ABC must obtain written approval from outside counsel before publishing reports.

"The reason for this is obvious," AIG's attorney, Michael J. Bowe, argued in the 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."

"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," he continued.

Disney defends the claim, citing that because no malice was intended, it did not need to consult outside counsel before running the broadcast on its findings.

"Rather than honor the terms of the insurance policy it sold us, AIG has chosen instead to evade those terms and attack its customer," a Disney spokesperson said, according to The Hollywood Reporter. "We will vigorously pursue our right to recover."

The powerhouse companies will share their arguments in New York before a federal judge.