A federal appeals court has upheld a California District Court ruling that Byron Allen's Entertainment Studios Networks (ESN) was not barred from suing Charter over its allegation the cable operator's decision not to carry his programming was racially motivated.
A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit has rejected Charter's motion to dismiss the suit and remanded it back to the U.S. District Court for the Central District of California for further proceedings, which likely means a trial on its merits unless the parties settle.
The court did not conclude Charter's conduct was racially motivated, only that it plausibly could have been and that the First Amendment did not bar the suit. Charter has sought to have the suit dismissed. Charter argued that racial "animus"—the alleged racial statements by Charter execs and alleged refusal to meet with Byron Allen—was not a "but for" cause of its decision not to carry the networks, which means it was not the only explanation, and that in any event the First Amendment barred the claim based on Charter's editorial discretion to not carry networks it didn't want to.
The district court rejected Charter's motion to dismiss, saying Allen and co-plaintiff the National Association of African American-Owned Media only had to plead that racism was a motivating factor, a test the lower court said the plaintiffs had met.
"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," the appeals court concluded in agreeing with the lower court.
The complaint against Charter alleged racist comments were made by Allan Singer, Charter's former senior VP of programming and by Charter CEO Tom Rutledge.
“This lawsuit is a desperate tactic that this programmer has used before with other distributors," said Charter in a statement. "We are disappointed with today’s decision and will vigorously defend ourselves against these claims.” Allen filed suit against Comcast, though that was dismissed. He also teamed with NAAAOM on a multi-billion dollar suit against AT&T that was ultimately settled with ESN networks getting carriage on AT&T-owned DirecTV and U-Verse TV.
Charter could appeal the three-judge panel decision to the full court, or take its chances in the lower court suit.
Again, the appeals court did not rule on whether Charter did discriminate, only that if it did what Allen and company allege, that indeed could be found to be impermissible discrimination in contracting based on race. According to the law, racial discrimination cannot "block the creation of a contractual relationship."
"We conclude that these allegations, when accepted as true and viewed in the light most favorable to Plaintiffs, are sufficient to plausibly claim that Charter denied Entertainment Studios the same right to contract as white-owned companies," the Ninth Circuit said.
Charters argues that the court can't discount other reasons for its conduct, including limited bandwidth and other operational concerns. But the court was not weighing evidence, simply ruling on whether Allen and company had a plausible case to make before a lower court and should be allowed to make it unless Charter could have persuaded it by those alternative explanations were so convincing as to render Allen's racism claim implausible.
The court conceded that Charter's conduct could plausibly be attributed to those race-neutral considerations, but it said those are not compelling enough to suggest the racial explanation is implausible if the allegations of disparate treatment and disingenuous statements—Allen says Charter invoked bandwidth constraints while making room for white-owned nets—are true.
As to Charter's argument that the First Amendment means cable companies don't have to accept channels they don't want to carry, the court disagreed. It said the law against racial bias in contracting does not seek to regulate the content of Charter's conduct, only "the manner in which it reaches its editorial decisions which is to say, free of discriminatory intent."