A federal judge in California has ruled that media mogul Byron Allen's $10 billion racial discrimination lawsuit against McDonald's may go to trial.
In what US District Judge Fernando M. Olguin called it a “close decision,” the court found that Allen's claims that the fast food chain engaged in “racial profiling” by not advertising in black-owned media would best be addressed by a jury.
“At a minimum, this is the type of case in which a trial court would be permitted, in its discretion, to deny even a well-supported motion for summary judgment if it believed the case would benefit from a full hearing,” Olguin ruled in the 25-page order.
The lawsuit alleges that McDonald's violated federal and California civil rights laws by deeming Allen's networks ineligible for the “vast majority” of its advertising dollars.
Allen McDonald was accused of referring his company, Entertainment Studios Networks, Inc. and Weather Group LLC, which owns The Weather Channel, to the “African American class” with a separate black-focused ad agency and a much smaller advertising budget, depriving them of tens of millions of dollars in annual revenue.
The lawsuit alleges that Allen and his companies asked to be clients of McDonald's' larger advertising arm, but were transferred to the smaller, black-only agency because Allen is black, which the entertainment studios called “blatant and harmful discrimination.”
According to the complaint, about 40% of McDonald's customers are Black, but the company spent less than $5 million of its $1.6 billion advertising budget in 2019 on Black-owned media.
“McDonald's, like so many American companies these days, publicly touts its commitment to diversity and inclusion, but this is nothing more than empty rhetoric,” the complaint said.
The lawsuit was filed in 2021 on the same day that McDonald's announced it would increase its national ad spending on Black-owned media to 5% from 2% by 2024, as well as increase spending on Hispanics, Asian Americans, women and the LGBT community. Owned platforms.
Allen welcomed Olguin's decision in a statement to the Grio.
“We have overwhelming evidence against McDonald's — which was sued by its black executives, its black franchisees, and its global security chief — for racial discrimination,” Allen said. “It is time for McDonald's Board of Directors, shareholders and civil rights organizations across the country to call for the resignation of CEO Chris Kempczinski, who was caught sending racist text messages about blacks and Hispanics.”
McDonald's said in a statement that the judge's decision simply means that neither party met the high standards for adjudication at this stage of the proceedings.
“We are prepared to show that this case is completely baseless. McDonald's has invested in media properties that are consistent with the company's business strategy and, like any other rational business, has refused to invest in those that received low ratings or failed,” McDonald's said. In reaching the company's target audiences.
Reuters contributed to this report
