Byron Allen's $10 bln McDonald's discrimination lawsuit is thrown out

2 minute read

McDonald's logo is seen on the window of one of its restaurants in New York January 24, 2011. REUTERS/Shannon Stapleton

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Dec 1 (Reuters) - A U.S. judge has dismissed a $10 billion lawsuit against McDonald's Corp (MCD.N) by the media entrepreneur Byron Allen, who accused the fast-food chain of racial discrimination for not advertising with Black-owned media.

U.S. District Judge Fernando Olguin in Los Angeles wrote on Tuesday that two companies owned by Allen did not offer enough factual evidence to show that McDonald's "intentionally and purposefully discriminated against them."

According to Allen's complaint, McDonald's has refused to advertise with lifestyle channels owned by his Entertainment Studios Networks since their 2009 launch, or with The Weather Channel since Allen bought its parent Weather Group in 2018.

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Allen also said McDonald's spent just 0.3% of its $1.6 billion U.S. ad budget in 2019 with Black-owned media though Blacks represent 40% of fast food customers, an allocation that reflected "racial animus and racial stereotyping."

But the judge said Allen didn't show his companies pushed hard enough to contract with McDonald's only to be rebuffed, or that McDonald's treated comparable white-owned networks better.

Olguin said Allen can file an amended complaint.

"We will be adding more details to the complaint as directed by the court; and fully expect the case to go forward with discovery and trial," Louis "Skip" Miller, a lawyer for Allen, said in an email on Wednesday.

"This case is about revenue, not race," Loretta Lynch, a lawyer for McDonald's, said in a statement. "We believe there is no evidence supporting this meritless case."

McDonald's pledged in May to boost national ad spending with Black-owned media to 5% from 2% by 2024.

Last month, Allen called on McDonald's board of directors to fire Chief Executive Chris Kempczinski, saying the company's "horrible, racist culture is indefensible and unacceptable."

A former stand-up comic and co-host of the NBC reality TV show "Real People," Allen recently raised $10 billion of financing in a bid for regional TV station operator Tegna Inc (TGNA.N), people familiar with the matter said last month.

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

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Reporting by Jonathan Stempel in New York Editing by Chizu Nomiyama and Mark Potter

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