By Cynthia Littleton, Variety – November 12, 2019 – Byron Allen’s racial discrimination case against Comcast Corp. on Wednesday heads to the Supreme Court, where justices will consider Comcast’s argument that the case should hinge on two words: “but for.”
Allen filed a $20 billion lawsuit against Comcast in February 2015, arguing that the nation’s largest cable operator was discriminating against his company, Entertainment Studios, by refusing to carry its seven lifestyle cable channels. Comcast maintained the decision was made strictly on business grounds because of the lack of audience demand for Allen’s channels.
Allen asserts that Comcast’s actions over a decade violated a post-Civil War statute designed to ensure that African Americans had the same rights to “make and enforce contracts” as white Americans. The lawsuit further accuses the NAACP and Rev. Al Sharpton’s National Action Network and other civil rights figures of conspiring with Comcast to “whitewash Comcast’s discriminatory business practices” by supporting the company’s 2011 acquisition of NBCUniversal, among other allegations.
Comcast has vehemently denied that race played a part in its decision making. Allen’s suit details allegations that Comcast strung Entertainment Studios along with suggestions of how to make the channels more likely to secure carriage, only to reverse course later. The original complaint also cites allegations that Comcast executives made racially charged statements during the course of Allen’s dealings with the company.
Allen’s case was dismissed by three lower courts. In 2018, the Ninth Circuit Court of Appeals reversed that decision, ruling that it only needed to demonstrate that race was a factor in Comcast’s decision-making on Entertainment Studios’ channels, not the sole reason for declining to carry the channels.
Comcast’s petition to the Supreme Court focuses on the precedent involving section 1981 of the Civil Rights Act of 1866, which bars discrimination on the basis of race, color and ethnicity when making and enforcing contracts. In the past, Comcast argues, the courts have evaluated Section 1981 claims on the standard that “but for” a person’s race or ethnicity, a contract would have been executed. Comcast argues that the Ninth Circuit erred in interpreting Section 1981 as allowing a claim if race is only one factor in the reasoning.
“Applying the proper but-for causation standard, there is no doubt that Plaintiffs’ allegations are inadequate to state a plausible Section 1981 claim,” Comcast wrote in August in seeking the Supreme Court’s review. “Comcast adamantly denies that it has engaged in any racial discrimination at any time, but even taking the allegations of the complaint at face value, Plaintiffs have not remotely pleaded a valid claim.”
Miguel Estrada of Gibson, Dunn & Crutcher will argue the case on behalf of Comcast. Erwin Chemerinsky, dean of Berkeley Law and Louis “Skip” Miller of Miller Barondess will argue for Entertainment Studios and the National Association of African American Owned Media, an organization started by Allen. Entertainment Studios also has a case pending against Charter Communications, which is not part of Wednesday’s hearing. A similar lawsuit against AT&T was settled in late 2015 with an agreement to add Entertainment Studios’ channels to DirecTV.
Allen’s quest has raised thorny questions about bias, access and diversity efforts across the industry. Allen’s detractors say he has opportunistically targeted major distributors for lawsuits at key moments when the media giants were seeking federal approval for megabucks mergers, such as AT&T’s 2015 acquisition of DirecTV and Comcast and Charter’s pursuit of Time Warner Cable.
Allen maintains that he was denied carriage by Comcast even as the company added a host of other channels to its lineup. Allen argues that litigation is needed for Entertainment Studios to gain access to the documents and information it needs to prove race was a factor. Allen’s legal filings dispute Comcast’s argument on the but-for causation test.
“A plaintiff need only submit evidence that raises an inference of discrimination; it is enough to allege and present a prima facie case that race was a motivating factor in the refusal to contract,” Allen wrote in a September filing to the high court. “Once a plaintiff does that, the burden shifts to the defendant to submit evidence that it was motivated by race-neutral reasons. Only then is a plaintiff required to negate those reasons.”
Industry watchers say that even with the Ninth Circuit’s decision, Allen’s case still has to clear a high bar.
“It will be a difficult case to win,” said Erik Gordon, assistant professor at the University of Michigan’s Ross School of Business. “Allen will have to prove that Comcast would have made enough money carrying his channels but decided not to because of race. That will not be easy, especially if Comcast has a business analysis that shows a business reason it declined to carry his channels.”
Allen’s case has spurred interest on Capitol Hill. On Nov. 8, U.S. Rep. Bobby Rush (D-Ill.) sent a letter to Comcast chairman-CEO Brian Roberts asserting his view that Comcast needs to be “broken up” in part because of its long-running dispute with Allen.
“In pursuing this case to the Supreme Court of the United States, Comcast is putting corporate profits ahead of public interest, and is employing a scorched earth policy to defend a corporate business decision,” Rush wrote.
In a comment on the letter, Comcast cited its business relationships with African American-led media outfits such as Oprah Winfrey’s OWN and Sean Combs’ Revolt TV. It also defended its right to challenge Allen’s allegations against Rush’s assertion that the company was trying to dismantle civil rights laws.
“We believe that the civil rights laws are an essential tool for protecting the rights of African Americans and other diverse communities,” Comcast said in a statement. “We have been forced to appeal this decision to defend against a meritless $20 billion claim, but have kept our argument narrowly focused. We are not seeking to roll back any civil rights laws — all we are asking is that section 1981 in our case be interpreted the same way it has been for decades across the country.”