Beef Products Inc., a South Dakota meat company whose lean, finely textured beef product was dubbed “pink slime” this year, has sued ABC News for defamation and is seeking $1.2 billion in damages.

The company, which after the controversy closed three of its four plants and laid off 700 workers, filed suit in state court in Elk Point, S.D., this week.

It alleges that ABC News’ coverage of the “pink slime” controversy misled consumers into believing that the product was unsafe, even though it had been approved for human consumption by the U.S. Department of Agriculture.

The lawsuit names as defendants ABC News, owned by Walt Disney Co., as well as anchor Diane Sawyer and reporter Jim Avila, among others.

Dan Webb, a Chicago-based attorney hired to represent the company, said ABC News “engaged in this massive and destructive, focused attack on our product and our business.”

The suit says that in a 30-day period, the news organization made “200 false and disparaging statements regarding BPI and its product,” and as a result, Beef Products saw its sales drop by 80%.

The suit also seeks punitive damages, Webb said, though how much has not been specified.

Lean, finely textured beef, as the product is known, is made from beef trimmings and undergoes a process to remove fat. It is treated with ammonium hydroxide to kill bacteria. It was given the moniker “pink slime” by a former USDA scientist.

After ABC News began reporting on the product, Beef Products faced a widespread consumer backlash and grocery chains nationwide began pulling beef containing the product from their meat sections.

Jeffrey W. Schneider, senior vice president for ABC News, said in a statement, “The lawsuit is without merit. We will contest it vigorously.”

As other media outlets began covering the “pink slime” debacle, the beef industry attempted to mount a defense of lean, finely textured beef. The American Meat Institute sought to ease consumers’ fears by providing fact sheets on the product.

Even elected officials came to the company’s defense. Governors from Texas, Kansas and Iowa, states where Beef Products had plants, toured the facilities and urged consumers not to reject the product.

ricardo.lopez2@latimes.com