Once known as the entrepreneur who debuted as a stand-up comedian on The Tonight Show as a teenager, Allen, 58, sued cable operators and satellite distributors after they refused to license his small channels devoted to topics including criminal justice, cars and pets. He hired an attorney who defended the city of Los Angeles in the Rodney King beating case and demanded tens of billions of dollars via allegations of a racial bias conspiracy against Comcast, DirecTV, Charter and others.
Just how out there was Allen’s lawsuit? The NAACP and Al Sharpton were originally co-defendants in the case for allegedly taking actions to “whitewash” Comcast’s discriminatory business practices. As the story was told in the suit, when Comcast sought regulatory approval for its 2010 bid to acquire NBCUniversal, it looked to gather support. To calm any fears that the merger would have a detrimental impact on diversity, Comcast made voluntary commitments and came to memoranda of understanding with various civil rights groups like the NAACP, National Urban League and Sharpton’s National Action Network. But Allen took issue with those so-called “sham” agreements, questioning the monetary donations that Comcast had made to these groups and further challenging how Comcast was spending $25 billion annually on channel licensing, but less than $3 million on what he characterized as “100% African American-owned media.”
On the day the suit was filed, Sharpton called me and strenuously took issue with the claim that his reported $750,000 salary for hosting an MSNBC show was essentially a disguised payment for having supported Comcast’s acquisition of NBCUniversal. Sharpton promised he’d retaliate against Allen with a defamation suit. (That never happened, and he and other civil rights groups were dismissed from the case.)
A lot has changed in the four years since the case was first filed. For starters, Allen has proved himself to be one of the most ambitious moguls in entertainment. In 2018, he spent $300 million to buy The Weather Channel. Then he teamed with Sinclair Broadcast Group to buy Fox’s sports assets that were divested as part of the Disney merger. And on Oct. 1, he unveiled a $290 million deal to acquire 11 local TV stations affiliated with CBS, NBC and ABC. Now Allen’s Comcast suit will be heard by the Supreme Court during the term that began Monday.
Allen’s suit was rejected three times by a district court judge who saw no plausible case that discrimination caused Comcast to not license Allen’s channels.
In reviving the case and giving Allen the green light, the 9th Circuit Court of Appeals concluded that Allen needed only to plausibly allege that discriminatory intent was a factor in — not the “but-for” cause of — Comcast’s refusal to license his channels. And the appeals court saw enough to meet this standard from the allegation that Comcast was carrying about 500 networks that Verizon, AT&T U-verse and DirecTV were carrying, but unlike its rivals, it did not carry Allen’s. In addition, Comcast was offering carriage to “lesser-known, white-owned networks” like Fit TV, Current TV and Baby First Americas. Comcast may have had legitimate reasons (e.g., no interest in spending millions for Allen’s channel about pets), but the appeals court felt that should be weighed at a latter portion of the case.
That the Supreme Court accepted review may be partly attributable to how the business community has locked onto Allen’s dispute with Comcast as an exemplar of tort nuisance. A supporting brief from the U.S. Chamber of Commerce urged the high court to take it up and argued that choices made in the workplace can be “inherently subjective,” and that by making Comcast prove a negative from the get-go — that discrimination isn’t any factor in decision-making — such a standard will impose unwarranted litigation costs and reputational harm on companies throughout the country.
In recent years, the Supreme Court’s growing contingent of conservative justices has acted as a miserly gatekeeper on civil litigation by heightening pleading standards in other contexts, spelling out the requisite injury to maintain a lawsuit and broadly enforcing arbitration agreements. As such, Allen probably goes into the Supreme Court battle, set to be argued Nov. 13, as an overwhelming underdog. The Trump administration is supporting Comcast, led by CEO Brian Roberts, telling the high court there may be repercussions for other federal anti-discrimination laws, too. U.S. Solicitor General Noel Francisco has requested the opportunity to participate in the oral hearings. (read more)