McDonald’s ordered to settle Byron Allen’s  billion discrimination lawsuit

McDonald’s ordered to settle Byron Allen’s $10 billion discrimination lawsuit

By Jonathan Stampel

(Reuters) – A U.S. judge has ordered McDonald’s Corp to defend against media entrepreneur Byron Allen’s $10 billion lawsuit accusing the fast-food chain of “racial stereotyping” by not advertising in owned media Black.

In Friday’s decision, US District Judge Fernando Olguin in Los Angeles said Allen could try to prove McDonald’s violated federal and California civil rights laws by deeming its networks ineligible for the “vast majority” of its dollars. advertising.

Allen accused McDonald’s of relegating his Entertainment Studios Networks Inc and Weather Group LLC, which owns the Weather Channel, to an “African American league” with a separate ad agency and a much smaller advertising budget, leaving They have thousands of dollars of annual income. .

While not ruling on the merits, Olguin cited allegations that Entertainment Studios since its 2009 founding has repeatedly tried and failed to secure a contract from McDonald’s, whose “racist” corporate culture harmed Allen.

“Taken together, and construed in the light most favorable to plaintiffs, plaintiffs have alleged sufficient facts to support an inference of intentional discrimination,” Olguin wrote.

In a statement Tuesday, McDonald’s lawyer Loretta Lynch argued that the Chicago-based company viewed the law as “income, not race,” and believed the evidence would show there was no discrimination.

“Plaintiffs’ baseless allegations ignore McDonald’s legitimate business reasons for not investing more in their channels and the company’s longstanding business relationships with many other diversely owned partners,” she said.

Allen, in a statement, said the case “was about the economic inclusion of African-American-owned businesses in the US economy. McDonald’s takes billions from African-American consumers and gives almost nothing back.”

The lawsuit said Blacks make up 40% of fast-food customers, but McDonald’s spent only 0.3% of its US$1.6 billion advertising budget in 2019 on Black-owned media.

In May 2021, McDonald’s pledged to increase national advertising spending with Black-owned media to 5% from 2% by 2024.

Olguin dismissed an earlier version of Allen’s lawsuits last November, finding no evidence of deliberate and intentional discrimination against his companies.

The case is Entertainment Studios Networks Inc et al v McDonald’s Corp, US District Court, Central District of California, No. 21-04972.

(Reporting by Jonathan Stempel and Hilary Russ in New York; Editing by Bill Berkrot)

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