Charter Loses Appeal, $10 Billion Racial Discrimination Suit Moves Toward Trial

Byron Allen - Photographed by Michele Thomas - H 2017
Photographed by Michele Thomas

Charter Communications can't escape a lawsuit alleging it discriminates against African-American-owned media companies, as a 9th Circuit panel on Monday affirmed a California federal judge's denial of its motion to dismiss the matter.

Byron Allen in January 2016 sued Charter, on behalf of his Entertainment Studios Networks and other African-American-owned media companies, for alleged discrimination in contracting in violation of section 1981 of the Civil Rights Act. Allen claims Charter refused to license channels, rejecting offers much lower than what it pays white-owned programmers, and that its executives made racist comments. 

The cable giant moved to dismiss the claim, arguing, among other things, that it has a First Amendment right to editorial discretion. U.S. District Court Judge George H. Wu denied that motion, finding the combination of the "arguably-racist statements" and "continued stonewalling and provision of excuses that do not match up with Defendant's practices with non-African-American-owned companies" and that the First Amendment doesn't preclude the claim.

The 9th Circuit on Monday agreed with Wu. It found Allen sufficiently alleged a viable claim regarding Charter's disparate treatment of white-owned companies, and that it isn't barred by the First Amendment. It also held that Allen doesn't need to prove discrimination was the primary reason for Charter's behavior.

"Section 1981 guarantees 'the same right' to contract 'as is enjoyed by white citizens,'" writes Circuit Judge Milan D. Smith, Jr. "If discriminatory intent plays any role in a defendant’s decision not to contract with a plaintiff, even if it is merely one factor and not the sole cause of the decision, then that plaintiff has not enjoyed the same right as a white citizen."

Smith notes that Charter's alleged race-neutral reasons for its conduct, such as limited bandwidth and timing concerns, could ultimately prove more persuasive explanations than the alleged discriminatory behavior. But, at this stage, a complaint should only be dismissed if the defense is so convincing it renders the plaintiff's version of events implausible. 

Finally, the panel doesn't buy Charter's argument that the First Amendment shields it from being forced to accept channels it doesn't want to carry. 

"Section 1981 does not seek to regulate the content of Charter’s conduct, but only the manner in which it reaches its editorial decisions — which is to say, free of discriminatory intent," writes Smith, also noting that the "Supreme Court has regularly emphasized that the prevention of racial discrimination is a compelling government interest."

Read the full opinion, below.