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$10 billion racial discrimination suit against McDonald’s over ad spending dismissed

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A federal judge has dismissed a $10 billion racial discrimination lawsuit against McDonald’s filed by media companies owned by Byron Allen over the way the burger chain spends its advertising dollars.

The suit, filed in May by Entertainment Studios Networks and Weather Group, alleged Chicago-based McDonald’s refused to advertise on their networks despite taking out ads with similar white-owned networks.

It also alleged the company paid higher prices to advertise with general market media companies than it did Black-owned companies, which submit pitches to McDonald’s through a separate tier for content targeting African American audiences, according to the complaint.

Entertainment Studios Networks owns a series of lifestyle television networks such as Pets.TV and Comedy.TV, and was founded by Allen in 1993. Allen purchased the Weather Group, which runs the Weather Channel, in 2018 for $300 million, according to the complaint.

In dismissing the suit Tuesday, U.S. District Judge Fernando Olguin said the companies had failed to support the notion that McDonald’s intentionally discriminated based on race but gave them an opportunity to refile the complaint.

Skip Miller, an attorney for the plaintiffs, said Wednesday they would file an amended complaint with more detailed facts. “I fully expect this case to move forward with discovery and trial,” he said in an email.

Loretta Lynch, an attorney for McDonald’s, said the company would assess the new claims and move again to dismiss them “as we believe there is no evidence supporting this meritless case.”

“This case is about revenue, not race, and was dismissed because plaintiffs have provided absolutely no factual basis for their claims,” she said in a statement provided by the company.

The suit alleged that being excluded from McDonald’s general market budget caused Allen’s companies to lose out on critical advertising dollars. In 2019, McDonald’s spent $1.6 billion on television advertising in the U.S., with $5 million, or less than one-third of 1%, going toward Black-owned media, the lawsuit alleged.

The same day the lawsuit was filed, McDonald’s announced an initiative pledging to increase its advertising spending over four years with companies owned by people from diverse backgrounds, a group that includes African Americans, Hispanics, Asian Americans, Pacific Islanders, women and LGTBQ individuals.

The suit alleged McDonald’s violated federal and California state law prohibiting racial discrimination in contracting and sought actual and triple damages, along with attorney’s fees and costs, with the total estimated at more than $10 billion.

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