McDonald’s Must File Byron Allen’s $10 Billion Lawsuit

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THE BHARAT EXPRESS NEWS INSURANCE NEWS
THE BHARAT EXPRESS NEWS INSURANCE NEWS

McDonald’s Corp. has been ordered by a US judge to defend a $10 billion lawsuit from media entrepreneur Byron Allen accusing the fast food chain of “racial stereotyping” by failing to advertise with black media.

In a ruling Friday, U.S. District Judge Fernando Olguin in Los Angeles said Allen could try to prove McDonald’s violated federal and California civil rights laws by denying its networks the “vast majority” of its advertising dollars.

Allen accused McDonald’s of downgrading its Entertainment Studios Networks Inc and Weather Group LLC, which owns the Weather Channel, to an “African American level” with a separate advertising agency and a much smaller advertising budget, costing them tens of millions of dollars in annual revenues. income has been deprived.

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While not commenting on the merits, Olguin cited allegations that Entertainment Studios had tried repeatedly and unsuccessfully since its inception in 2009 to get a contract from McDonald’s, whose “racist” corporate culture harmed Allen.

“All things considered and interpreted in the light most favorable to plaintiffs, plaintiffs have presented sufficient facts to support an inference of intentional discrimination,” Olguin wrote.

In a statement on Tuesday, McDonald’s attorney Loretta Lynch insisted the Chicago-based company saw the lawsuit “about income, not race” and believed the evidence would show there was no discrimination.

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“The plaintiffs’ baseless allegations ignore both McDonald’s legitimate business reasons for not investing in their channels anymore and the company’s longstanding business relationships with many other diverse partners,” she said.

Allen said in a statement that the case was “about the economic inclusion of African-American-owned companies in the U.S. economy. McDonald’s takes billions from African American consumers and gives almost nothing in return.”

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

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

Olguin dismissed an earlier draft of Allen’s lawsuit last November and found no evidence of intentional and purposeful 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.

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