11:00am PT by Eriq Gardner
Comcast, Al Sharpton Beat $20B Racial Discrimination Lawsuit
A California judge has made short order of a $20 billion lawsuit that accused Comcast and Time Warner Cable of racial discriminating through the licensing of cable channels. The legal action fails because the National Association of African-American Owned Media "failed to allege any plausible claim for relief."
The lawsuit was filed this past February before the Comcast-Time Warner Cable merger collapsed. According to the complaint, the two companies "collectively spend approximately $25 billion annually for the licensing of pay-television channels and advertising of their products and services, yet 100% African American–owned media receives less than $3 million per year."
The legal action, spearheaded in part by Byron Allen's Entertainment Studios Networks, gained some notoriety for including as co-defendants Al Sharpton, the NAACP, the National Urban League and the National Action Network for allegedly facilitating discrimination. In 2010, Comcast acquired NBCUniversal and entered into voluntary diversity agreements with these groups. The lawsuit said it was a "sham, undertaken to whitewash Comcast's discriminatory business practices," and raised hackles over Sharpton's salary as host of an MSNBC show.
In response to the lawsuit, the defendants said the lawsuit was "preposterous," "offensive," "entirely fantastical" and "shameful," and argued the complaint was "devoid of factual allegations that could remotely support Plaintiffs' outlandish and defamatory claims under the applicable pleading standard."
Today, U.S. District Judge Terry Hatter Jr. agreed, and in a sign he didn't even think this was a close call, spent just three pages analyzing the claims in an order to dismiss. (Read here.) He rules that the plaintiffs have failed to plead sufficient facts to show his court has personal jurisdiction over Sharpton and various African-American advocacy groups. And the claims against the other defendants don't survive further because Hatter can't reasonably infer they are liable for misconduct alleged even accepting plaintiff's facts.
"Knowing that our lawsuit helped the FCC and the DOJ deny Comcast's bid to buy Time Warner Cable is already a big win for us," said Allen in a statement. "We are going to immediately appeal this decision to the 9th Circuit Court of Appeals who I believe will deliver us a favorable decision."
Added National Association of African-American Owned Media president Mark DeVitre: "We will continue to vigorously pursue Comcast and Time Warner Cable, who spend approximately $25 billion annually licensing cable networks with less than $3 million going to 100% African American owned media."
The defendants were represented by Miguel Estrada and other attorneys at Gibson Dunn & Crutcher.
Aug. 7, 6:48 p.m. Updated with statements from Allen and DeVitre.