Could Black Billionaire’s $20 Billion Suit Against Comcast Signal End of the Media Giant?
The US Supreme Court will soon hear oral arguments in the $20 billion case against Comcast, America’s biggest cable provider. The suit is being brought by an African American TV mogul who has charged Comcast with racial discrimination because it refuses to carry any of his channels.
Specifically, the complaint alleges violations of a 153-year-old Civil Rights Act passed immediately following the Civil War (1866), and whose principal objective was to outlaw discrimination against the newly freed slaves (and their descendants) in the enforcement of contracts.
In its response, Comcast has asked the Supreme Court to determine whether Allen must show that his race was the principal reason why it has not broadcast any of his shows or channels — or whether race itself can or may be considered as just one among many motivating factors for such a decision.
Should the Supreme Court agree with Allen, he will be allowed to continue to sue Comcast in the lower courts, and in all likelihood, he will be awarded billions in damages should he prevail there.
This case is important for a number of reasons beyond the particular issues raised in Allen’s complaint.
“It’s a really important law in terms of making sure employers shouldn’t discriminate based on race,” says Deborah Widiss, a law professor at Indiana University. You may wonder why the The Civil Rights Act of 1964 does not apply in this matter. Well, according to Professor Widiss, that law only applies to companies with more than fifteen employees. Smaller companies, however, may only sue for racial discrimination under the 1866 law. Professor Widiss submitted an amicus curiae brief in support of Allen.
And, precisely because, “An awful lot of people in this country work for really small employers,” Widiss said, those small companies and employers are probably hoping that the Supreme Court will make it harder to bring such cases to court.
On the other hand, if the High Court rules in favor of Allen and against Comcast, then small business could be exposed to endless, harassing, frivolous, and merit-less litigation, according to Karen Harned, executive director of the National Federation of Independent Small Business Legal Center.
“It’s just going to make it so that it’s going to be easier for the bottom feeders of the trial bar to shake down small businesses,” charged Harned, whose organization filed an amicus brief in support of Comcast. She puts it even more bluntly: Such cases would mean that anyone or group within or without a company of virtually any size may simply tell a company, “‘We’re going to sue you unless you give us money.’”
Interestingly, this particular case did not originate in or on behalf of a small business. Byron Allen (58), and his company, Entertainment Studios, which has seven “lifestyle channels” including including Cars.TV, Comedy.TV, and Pets.TV, (and who has recently paid more than $300 million for “The Weather Channel”) claim in their Supreme Court brief that for eight years, Comcast gave Allen and his company the “run-around with false promises of carriage.” Comcast, on the other hand, said that it lacked “sufficient bandwidth” to carry the channels, the brief stated.
But Entertainment Studios counters that since 2010, Comcast has launched eighty networks including “lesser-known, white-owned” channels. A Comcast executive is on record actually admitting why it really refuses to carry Allen’s channels. According to Entertainment Studios, the executive allegedly said, referring to the founder of Black Entertainment Television (BET), and now a certified black billionaire, “We’re not trying to create any more Bob Johnsons.”
And so, in 2015, Entertainment Studios sued Comcast (and others, including Time Warner Cable, which was later voluntarily dismissed), alleging racial discrimination under the 1866 Civil Rights Act’s contract provision, specifically Section 1981 thereof.
Initially, a federal judge dismissed the case, but the US Court of Appeals for the 9th Circuit reversed and reinstated it, saying that Entertainment Studios was only required to to allege that race was “a” “motivating factor” under Section 1981, as opposed to “the” motivating factor, in order for the case to avoid dismissal at such an early stage in the litigation.
Let’s go deeper:
The appeals court specifically rejected the standard known as “but for” causation embedded in Section 1981. That standard requires that a plaintiff prove that it was his or her race alone which was the determining factor in Comcast’s refusal to use any of Allen’s channels. Section 1981, according to the 9th Circuit, therefore, allowed plaintiffs to use a lower standard — only having to show that race was just one motivating factor in its denial decision and therefore that plaintiff would survive a motion to dismiss.
Richard Samp, who also filed an amicus brief on behalf of Comcast via the Washington Legal Foundation, a public interest law firm that advocates for businesses, disagrees with the appellate court. He says that the 9th Circuit’s decision was “pretty radical,” because it contradicted other appeals court’s decisions wherein Section 1981 does require “but for” causation. However, “It was not at all surprising that the Supreme Court granted review,” he said.
Comcast has double-downed on that point, arguing that the 9th Circuit’s decision conflicted with previous rulings from the High Court itself and other, lower, courts of appeal. The Supreme Court should hear the case, Comcast also argued, because it had “legitimate” business reasons not to carry Entertainment Studios’ channels — including a preference for sports and news and, yes, as stated, limited bandwidth.
If Comcast’s interpretation of the law is accepted by the Court, it will be virtually impossible for plaintiffs to sue under Section 1981, according to a number of law professors who also filed amicus briefs in support of Allen.
“It’s incredibly hard for a plaintiff to win a race discrimination case and if you set the standard so high that you have to show ‘but for cause’ it’s just going to pull the rug out from underneath individuals who have to prove that,” said Michael Foreman, director of the civil rights clinic at Penn State Law.
That decision would allow all businesses to argue that they had many and varied motives for their actions, and, crucially, that their decisions were not entirely based on race, according to the law professors. Would this mean that some racial discrimination is “acceptable”?
“Presumably, a defendant can say, yeah, ‘Well maybe we said discriminatory things … But there was a mixed motive. We also had an economic motive. …The former slave owners had mixed motives, too,” allowed University of Hawaii at Manoa law school dean and professor Avi Soifer.
Here, again, the good professor was emphasizing the fact that Section 1981 was passed specifically to end discrimination against newly freed black slaves.
Erwin Chemerinsky, dean of Berkeley Law, represents Allen and his company before the Supreme Court. He calls this,
“…a very important civil rights case….“‘But for’ causation is a very difficult standard to meet. If ‘but for’ causation is required for [Section] 1981, then many meritorious race discrimination cases won’t be able to go forward,” said Chemerinsky.
He noted that most courts have not required “but for” causation.
Why is the “but for” causation standard so problematic and hard to meet? Because said Chermerinsky, “We live in a world where there are multiple causes for events.” That is, because human beings are, after all, human, rarely is there a single, solitary explanation or cause or reason or impetus for complex and even not-so-complex human behaviors.
Yet, those who argue for the “but for” causation standard for Section 1981 want us to know that they do not favor of racial discrimination. Rather, as Rae Vann, managing partner at the employment law firm NT Lakis and author of yet another amicus brief filed on behalf of Comcast, argues:
“There are practical reasons we believe why Section 1981 should be subject to ‘but for’ causation. We in no way, shape, or form mean to suggest that a little bit of discrimination is okay. That’s not what we’re saying,” Vann said.
Crucially, the more recent Civil Rights Act of 1964 has a cap on damages allowed while Section 1981does not. And, again, the Civil Rights Act does not apply to businesses with less than fifteen employees. Section 1981 recognizes no size limit on any business whatever.
“It seems apt in our view that Section 1981 would have a stricter proof burden given the breadth of potential damages provided under that law,” Vann noted. “Some employers depending on their size are faced with ‘bet the farm’ potential monetary liability.”
If smaller businesses find it easy to defeat motions to dismiss via Section 1981, then they may settle cases early simply as “nuisance” litigation and/or to avoid the prohibitively high costs associated with protracted litigation.
“We are fearful that defendants could never get a case like this dismissed and then, of course, once a case gets beyond the pleading stage it can become extremely expensive for the defendant,” noted Samp, who filed the amicus brief on behalf of Comcast.
Again, a Comcast spokesperson emphasized that its vigorous defense in this case is not an attempt to roll back civil rights laws. On the contrary, Comcast considers such laws as an “essential tool” for protecting, specifically, African Americans.
Still, Comcast sees itself as being victimized by this action:
“We have been forced to appeal this decision to defend against a meritless $20 billion claim, but have kept our argument narrowly focused. This case cannot detract from Comcast’s strong civil rights and diversity record or our outstanding record of supporting and fostering diverse programming from African-American owned channels,” a spokesperson stated. “There has been no finding of discriminatory conduct by Comcast against this plaintiff by any court, and there has been none.”
In a recent interview with Yahoo Finance’s Editor-in-Chief Andy Serwer, Allen said that this case is about much more than the $20 billion for which his company is suing Comcast. He says that he seeks “economic opportunity for all Americans.” In that regard, Allen has similar suits pending against other cable companies, including AT &T and Charter.
“I’m not a woman so I can’t sue on behalf of women,” explains Allen. “I can’t sue on behalf of Hispanic people. I can’t sue on behalf of gay people. If I could, I would. ”
Given the current conservative bent of the Supreme Court majority, it is unlikely that Allen will win there. The Civil Rights Act/Law of 1866 has been essentially a “dead letter” for many generations now. It is unlikely that a Trump-dominated High Court will revive it in favor of a flegling, upstart (start-up?) black billionaire.
On the other hand, win or lose, will Byron Allen’s bold and brash challenge to the world’s largest media company perhaps signal the first real and significant crack in its armor and lead to a much needed breakup?
Finally, despite Byron Allen’s invocation of a Civil War-era civil rights law designed for the specific purpose of helping black people, this is not a demand for reparations for slavery. Nor is Allen seeking any other type or sort of special government “hand-out” whatever. He is, however, demanding that the US government force Comcast and the entire cable industry to play by one set of rules — “colorblind” rules.
Indeed, this is a man, a black man no less, with a long and proven track record of successful, profitable businesses, and who is simply demanding equal treatment by the cable television industry. Everything he has touched has turned golden…yet, as he puts it in the videos above, he is “not allowed” to play in the “Big Leagues” — “but for” one very old, very obvious and very tiresome reason.