Beef Products Inc. sued for defamation over ABC's coverage of a meat product that critics dub "pink slime."
ABC wanted the case considered by the U.S. District Court in Sioux Falls, but Judge Karen Schreier on Wednesday ordered it back to circuit court.
In a statement sent Thursday, ABC News said the federal court was clear that in sending the case to state court it was not expressing any opinion on the merits of the case.
BPI claims the network damaged the company by misleading consumers into believing the product is unhealthy and unsafe. It is seeking $1.2 billion in damages.