A federal judge in California has ruled that media mogul Byron Allen's $10 billion racial discrimination lawsuit against McDonald's can proceed to trial.
U.S. District Judge Fernando M. Holguin called it a “close call,” and jurors ruled that Mr. Allen's claim that the fast-food chain was playing into “racial stereotyping” by not advertising in black-owned media. The court decided that it was best to deal with it. .
“At a minimum, this “allows a trial court, in its discretion, to deny even a well-supported motion for summary judgment if it believes the case would benefit from a full trial. ' type of lawsuit,'' Holguin said. It was ruled in a 25-page order.
The complaint alleges that McDonald's violated federal law and California civil rights law by deeming Allen's network ineligible for a “substantial portion” of advertising dollars.
Allen said McDonald's has demoted Entertainment Studio Networks, Inc., and Weather Group LLC, which owns the Weather Channel, to the “African-American” category and created a separate ad agency that focuses on blacks. , accused it of slashing its advertising budget and depriving it of tens of millions of dollars in revenue. How many dollars of annual income?
The lawsuit alleges that Allen and his company had applied to be clients of McDonald's major advertising division, but were relegated to a smaller black-only agency because Allen was black. Entertainment Studios called this “blatant and egregious discrimination.”
About 40% of McDonald's customers are Black, but the company spent less than $5 million of its $1.6 billion advertising budget on Black-owned media in 2019, according to the complaint.
“McDonald's, like many large American corporations these days, publicly touts its commitment to diversity and inclusion, but this is nothing more than empty rhetoric,” the complaint says.
The lawsuit comes after McDonald's announced in 2021 that it would increase its national advertising spending in Black-owned media from 2% to 5% by 2024, and would also increase spending on Hispanics, Asian Americans, women and LGBTQ people. Woke up on the same day. -Owned platform.
Allen welcomed Holguin's decision. Statement to the Griot.
“We have overwhelming evidence against McDonald's, which has been accused of racial discrimination by Black executives, Black franchisees, and its global security chief,” Allen said. “McDonald's Board of Directors, shareholders, and civil rights organizations across the United States are calling for the resignation of CEO Chris Kempczinski, who was arrested for sending racist text messages about Black and Hispanic people. The time has come to ask.”
McDonald's Corporation said in a statement that the judge's decision simply means that neither party meets the high standard for termination at this stage in the proceedings.
“We are prepared to show that this lawsuit is completely without merit. McDonald's invests in media assets that are consistent with its business strategy and, like any reasonable company, “We refused to invest in media that failed to reach the company's target audience.”
Reuters contributed to this report
