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

A federal judge has ruled that a lawsuit filed by Allen Media Group (AMG) that alleges discrimination by the McDonald’s Corporation may proceed.

“The court finds that plaintiffs plausibly allege that defendant intentionally discriminated against them in refusing to contract,” Fernando M. Olguin, the District Judge for the United States District Court, Central District of California, wrote in his Sept. 16 order.

Byron Allen, founder, chairman and CEO of AMG — the parent company of theGrio — hailed the decision.

“This is about economic inclusion of African American-owned businesses in the U.S. economy. McDonald’s takes billions from African American consumers and gives almost nothing back. 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. The economic exclusion must stop immediately,” said Byron Allen, Founder/Chairman/CEO of Allen Media Group. “McDonald’s CEO Chris Kempczinski got caught sending racist text messages and McDonald’s has been sued by the Black franchisees, the Black executives, the Black employees, the Black vendors, and 52 percent of the McDonald’s stockholders recently voted to hire a third-party firm to investigate McDonald’s for civil rights violations. This is historic!!! The overt and systemic racism at McDonald’s is undeniable and indefensible. McDonald’s CEO Chris Kempczinski, McDonald’s Chief Marketing Officer Morgan Flatley, and the Board of Directors must be fired.”

The lawsuit seeks “actual and treble damages in addition to attorneys’ fees and costs, which altogether are estimated to exceed $10 billion.”

Paul, Weiss, Rifkind, Wharton & Garrison, one of the two law firms representing McDonald’s, did not respond to two phones or emails for comment by the end of the business day. A representative for  Riley Safer Holmes & Cancila, which also represents McDonald’s, did not respond to two phone calls.

Entertainment Studios Network, Inc., and The Weather Channel — two AMG subsidiaries — sued McDonald’s on May 20, 2021, alleging racial discrimination in contracting and violation of California’s Unruh Civil Rights Act, which provides protections from racial discrimination.

“McDonald’s has violated the Unruh Civil Rights Act by intentionally discriminating against Plaintiffs on the basis of race,” the lawsuit claims..

In December 2021, Olguin threw out the suit. But AMG amended the complaint and Olquin allowed it to proceed.

The lawsuit claims McDonald’s, in 2019, spent approximately $1.6 billion in television advertising in the United States but less than $5 million with African American-owned media companies.

The lawsuit also claims that McDonald’s places Black-owned businesses in a different advertising “tier” that pays lower rates and also offers unfavorable contract terms. But McDonald’s treated Entertainment Studios — which offers content that appeals to a general audience — as a Black-owned business simply because of Allen’s race.

The lawsuit alleges that McDonald’s also shut out The Weather Channel from its general market advertising budget. The lawsuit claims McDonald’s is guilty of “intentional racism” that has harmed Entertainment Studios and The Weather Channel. 

“As alleged in our complaint, McDonald’s has engaged in pernicious racial discrimination in violation of federal and state law,” said counsel for Allen and his companies, David Schecter and Skip Miller, partners in Miller Barondess, LLP.  “We are confident the jury will recognize the injustice that has occurred here and will award significant damages. We are looking forward to our day in court.”

McDonald’s has until Sept. 26 to respond to the judge’s order.  

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