Charter Gets Green Light to Appeal First Amendment Argument in Discrimination Case

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A big clash between the First Amendment and civil rights may be headed to the 9th Circuit Court of Appeals after a California federal judge on Tuesday agreed to certify an appeal by Charter Communications. In agreeing to additionally pause proceedings in a racial discrimination lawsuit brought by Byron Allen's Entertainment Studios Networks, U.S. District Judge George H. Wu wrote about a novel and important issue with "potentially far-reaching effects."

Ever since the U.S. Supreme Court in 2015 ruled that the Constitution guarantees a right to same-sex marriage, there's been ample discussion about the intersection between liberty and discrimination. Recent disputes include a florist who refused to do arrangements for a same-sex couple and a video production company that declined to tape a same-sex wedding. The lawsuit between Allen's African-American television networks and Charter represents a battle on another front and could grow in significance should it climb the appellate ladder.

The law at issue is section 1981 of the Civil Rights Act, enacted after the Civil War during the reconstruction era when various states pushed "black codes" limiting the rights of newly freed slaves. In reaction, Congress passed its own law giving all citizens the same rights to "make and enforce contracts."

Allen claims that Charter has refused offers to carry his networks at prices far below what the cable giant is paying white-owned programmers. He asserts the decisions are born of racial animus as evidenced by racist comments allegedly made by Charter's executives. Allen wasn't successful pursuing Comcast on similar grounds, and came to a settlement with AT&T, but in October, he survived Charter's motion to dismiss.

Wu wrote in his decision allowing the case to proceed that "while Defendant's ultimate carriage/programming activity is entitled to some measure of First Amendment protection, the Court does not believe that Defendant has identified and applied the proper method of analyzing the First Amendment impact of an application of Section 1981 to the contracting activity in question here."

Charter moved for reconsideration, and as an alternative, the opportunity to have a higher authority weigh its argument that the First Amendment bars Plaintiffs’ claims as an impermissible content-based restriction on Charter’s constitutionally protected editorial decisions about which channels to carry. The cable company believes the judge has departed from precedent, including a U.S. Supreme Court decision (Hurley) not to compel parade organizers in Boston to include the participation of a gay group as well as a more recently rejected discrimination case in Tennessee (Claybrooks) over the alleged failure by ABC's reality series The Bachelor to cast minorities.

Wu is sticking to his decision.

In his latest order (read here), he dismissively frames Charter's argument as meaning "something close to a near-total First Amendment right in its contracting decisions, such that an individual or entity effectively cannot even bring a claim founded upon 42 U.S.C. § 1981 in connection with those decisions," musing in a footnote that if Charter "is correct, wouldn’t Section 1981 yield to the First Amendment 'under all circumstances?' "

But Wu acknowledges a novel and important issue — one where "there are substantial grounds for difference of opinion," where law could be determined depending on how other authorities make their First Amendment analysis. Additionally, he says that instruction from the 9th Circuit (which will still need to agree to hear the case) could "clarify the applicable standards" and "fruitfully aid in the resolution of this case, either in-court or otherwise."

As such, he's willing to stay proceedings, which will likely mean that the case won't go to trial in July 2017 as scheduled.