McDonald’s motion to dismiss $10 billion Lawsuit Denied by U.S. District Court Judge
LOS ANGELES, September 20, 2022 /PRNewswire/ — Byron Allen Allen Media Group (AMG) divisions Entertainment Studios Networks, Inc. (“Entertainment Studios”) and Weather Group, LLC (“Weather Group”) won a major legal victory in federal court on Friday, September 16, 2022. The AMG Complaint originally filed on May 20, 2021 versus McDonald’s Corporation (“McDonalds”) look for $10 billion in damages for racial discrimination. According to the lawsuit, McDonald’s intentionally discriminated against AMG divisions entertainment studios and weather group by a pattern of racial stereotyping and refusal to contract in violation of the Civil Rights Act of 1866, 42 USC § 1981, and the California Aruh Civil Rights Act, Cal. Civil Code § 51.5. On Friday, September 16, 2022McDonald’s defendant denied motion to dismiss by judge Fernando M. Olguin of United States District Court of the Central District of California. The case will now go to trial before a jury at May 2023.
McDonald’s is the world’s leading foodservice retailer with over 39,000 locations that generate more than $100 billion in annual income. African Americans make up about 40 percent of McDonald’s sales in the United States, with McDonald’s taking billions of dollars every year from African American consumers. By the trial, its about $1.6 billion annual advertising budget, McDonald’s spend less than about $5 million annually on African-American-owned media, and he refused to advertise on entertainment studios networks or The weather channel since Allen acquired the network in 2018. According to the lawsuit, the McDonald’s President and CEO Chris Kempczinski made about $11 million per year, more than double what McDonald’s spends per year on ALL black-owned media combined.
The lawsuit (case number 2:21-cv-04972-FMO-MAA Entertainment Studios Networks, Inc. et al v. McDonald’s UNITED STATESLLC) alleges that McDonald’s refusal to contract is the result of racial stereotyping across McDonald’s tiered advertising structure that differentiates on the basis of race. The main advertising level for McDonald’s is called “general market” and it constitutes the vast majority of McDonald’s advertising budget. McDonald’showever, created a separate “African American” tier with a much smaller budget and less favorable prices and other conditions. McDonald’s contracts with a separate advertising agency, Burrell Communicationsfor that African-American level, creating separate and unequal avenues for black-owned media companies to earn ad revenue. McDonald’s has created a discriminatory environment that is separate but not equal.
According to the lawsuit, McDonald’s relegated entertainment studios at the least favorable African-American level, even though the companies own and operate television networks that have general market appeal and do not specifically target African-American audiences. McDonald’s does so because the companies are owned by Allen, an African American. Through this stereotype, McDonald’s stop entertainment studios and weather group to access McDonald’s general market advertising budget and deprived companies of advertising revenue that would otherwise have been paid if McDonald’s treated businesses the same as white-owned and similarly situated businesses.
Many key points of the court decision (see attached PDF) favorable to the AMG/Entertainment Studios/Weather Group The position includes, on page 11 of its opinion, the court recognized that racist comments by senior executives – even if not directed at the plaintiff – can prove racial bias in support of a claim for racial discrimination under section 1981. The lawsuit alleges that senior McDonald’s executives, including its current CEO, made racially derogatory comments that reflect a culture of racial hostility within the company.
“It’s about the economic inclusion of African-American-owned businesses in the American economy. McDonald’s takes billions from African-American consumers and gives next to nothing in return. The biggest trade deficit in America is the trade deficit between white corporate America and black America, and McDonald’s is guilty of perpetuating this disparity. Economic exclusion must end immediately,” said Byron Allen, Founder/Chairman/CEO of Allen Media Group. “The CEO of McDonald’s Chris Kempczinski was caught sending racist text messages and McDonald’s was sued by black franchisees, black executives, black employees, black salespeople and 52% of McDonald’s shareholders recently voted to hire a third-party company to investigate McDonald’s for civil rights violations. It’s historic!!! The overt and systemic racism at McDonald’s is undeniable and indefensible. McDonald’s CEO Chris KempczinskiMcDonald’s Marketing Director Morgan Flatleyand the board should be fired.”
“As alleged in our complaint, McDonald’s engaged in pernicious racial discrimination in violation of federal and state law,” said the attorney for Mr. Allen and his companies, David Schecher and Skip Millerpartners of barond miller, LLP. “We are confident that the jury will recognize the injustice that has occurred here and award significant damages. We look forward to our day in court.”
About Allen Media Group
President and CEO Byron Allen based Allen Media Group/Entertainment Studios in 1993. Based in Los Angelesit has offices at New York, Chicago, Atlantaand Charleston, South Carolina. Allen Media Group owns 27 ABC-NBC-CBS-FOX Network-affiliated television stations in 21 U.S. markets and twelve 24-hour HD television networks serving nearly 220 million subscribers: THE WEATHER CHANNEL, THE WEATHER CHANNEL IN ESPAÑOL, PETS.TV, COMEDY.TV, RECIPE.TV, CARS.TV, ES.TV, MADESTINATION.TV, JUSTICE CENTRAL.TV, THEGRIO, THIS TVand PATTERN. Allen Media Group also owns the streaming platforms HBCU GO, SPORTS.TV, THEGRIO, THE WEATHER CHANNEL STREAMING APP and LOCAL NOW–the free AVOD streaming service powered by THE WEATHER CHANNEL and content partners, who deliver real-time, hyper-local news, weather, traffic, sports and lifestyle information. Allen Media Group also produces, distributes and sells advertising for 68 television programs, making it one of the largest independent producers/distributors of first-run syndicated television programming for television stations. With a library of over 5,000 hours of content held across multiple genres, Allen Media Group delivers video content to broadcast television stations, cable television networks, mobile devices and digital media. Our mission is to provide great programming to our viewers, online users and fortune 500 advertising partners.
Entertainment Studios Motion Pictures is a full-service motion picture distribution company specializing in wide-release commercial content. ESMP released the highest-grossing independent film of 2017, the shark thriller 47 METERS DOWNwhich brought in more than $44.3 million. In 2018, ESMP also released Western to commercial and critical acclaim. HOSTILEShistorical mystery thriller CHAPPAQUIDDICK and the sequel to 47 METERS DOWN, 47 METERS BELOW: NO CAGE. The digital distribution unit of Entertainment Studios Motion Pictures, Freestyle Digital Media, is a leading multi-platform distributor with direct partnerships across all major cable, digital and streaming platforms. Capitalizing on a robust infrastructure, proven track record and experienced sales team, Freestyle Digital Media is a veritable home for independent films.
In 2016, Allen Media Group bought The Grioa highly rated digital video-centric news community platform dedicated to providing African Americans with compelling stories and perspectives currently underrepresented in existing national news outlets. The Grio offers aggregated and original video packages, news articles and opinion pieces on topics including breaking news, politics, health, business and entertainment. Initially launched in 2009, the platform was later acquired by BNC News in 2010. The digital platform remains focused on curating exciting digital content and currently has over 100 million annual visitors. For more information visit: www.entertainmentstudios.com
SOURCEAllen Media Group