3RD UPDATE, 7:29 PM: Some lawsuits just won’t go away– much to Comcast’s dismay, we’re sure. A federal judge today reopened the $20 billion racial-discrimination lawsuit against Comcast, Time Warner Cable, Al Sharpton and others that seemed dead only 12 days ago. In his order today (read it here), U.S. District Judge Terry Hatter Jr. gave the plaintiffs — the Byron Allen-founded Entertainment Studios Network and the National Association of African-American Owned Media — until September 21 to file an amended complaint. The huge-damages case initially was filed February 23, and Hatter said August 7 that he had thrown it out. That’s obviously not the case now. No word yet from Comcast about the latest turn in the back-and-forth case. Details of the lawsuit are below. As for its potential next phase, tune in next month.
One Year Later, Doubts Grow Comcast Will End Up With Time Warner Cable
2ND UPDATE, 11:15 AM: Comcast, Time Warner Cable, Al Sharpton and others can breathe a little easier today. U.S. District Judge Terry Hatter Jr. has thrown out the $20 billion racial-discrimination lawsuit in which they were fingered as defendants. The Byron Allen-founded Entertainment Studios Network and the National Association of African-American Owned Media alleged “discriminatory business practices” by the cable giants, the NAACP, MSNBC’s Sharpton and his National Action Network, among others. The federal judge saw it differently. “Accepting all of the factual allegations in the complaint as true, the plaintiffs have failed to allege any plausible claim for relief,” Judge Hatter wrote in a short and sharp order (read it here) granting the media giants’ motion to dismiss. Even though the now merged DirecTV is trying to get out of it, Allen and NAAAOM’s similar case against AT&T continues – as 50 Cent noted last month.
UPDATED, 9:58 AM, February 23: Comcast has come out swinging against the harsh claims against the company in a $20 billion racial discrimination lawsuit. “We will defend vigorously against the scurrilous allegations in this complaint and fully expect that the court will dismiss them,” said the cable giant today in a statement responding to the recent “frivolous” legal action filed against it, Time Warner Cable, Al Sharpton and his National Action Network, the NAACP and others. “We do not generally comment on pending litigation, but this complaint represents nothing more than a string of inflammatory, inaccurate, and unsupported allegations.” Read the full statement from Comcast below.
The Sharpton-founded National Action Network weren’t taking the big bucks lawsuit quietly either. “National Action Network has not been served with any papers and considers this claim frivolous,” the NAA’s EVP and General Counsel Michael A. Hardy said Monday in a statement. “If in fact we were to be served, we would gladly defend our relationship with any company as well as to state on the record why we found these discriminatory accusations made by said party to be less than credible and beneath the standards that we engage in.”
PREVIOUS, 8:48 AM, February 23: The FCC hasn’t said yay or nay to the proposed $45 billion Comcast merger with Time Warner Cable, but the National Association of African-American Owned Media has certainly weighed in with a potentially damning lawsuit. In a sprawling $20 billion racial discrimination complaint, the group and the Byron Allen-founded Entertainment Studios Network alleges “discriminatory business practices” by the mega cable companies, the NAACP, MSNBC host Al Sharpton and his National Action Network, and others.
“Defendants intentionally agreed and conspired with each other to discriminate on the basis of race against 100% African American–owned media in connection with contracting,” says the complaint filed Friday in federal court in California (read it here). “Defendants NAACP, National Urban League, Al Sharpton, National Action Network and
Meredith Attwell Baker acted as co-conspirators by accepting cash payments, jobs and other favors from Comcast in exchange for their public support and approval of Comcast’s racist policies and practices in contracting for channel carriage,” adds the 30-page filing, which seeks a jury trial.
“In exchange for these payouts and other favors, Defendants NAACP, National Urban League, Al Sharpton and his National Action Network agreed to enter into sham ‘diversity agreements’—MOUs—for the purpose of facilitating Comcast’s racial discrimination in contracting.” Sharpton’s NAA allegedly got $3.8 million in donations and the Reverend got his annual take home pay of around $750,000 as host of MSNBC’s PoliticsNation, that debuted in 2011.
With slaps at Time Warner Cable throughout also, the far reaching complaint says that these millions and support from Rev. Sharpton and the others greased concerns over the Comcast NBC-Universal merger of 2009 and have allowed Comcast to now broadcast only a single totally African-American owned channel. That is the Africa Channel, an outlet the lawsuit says is “owned by Paula Madison, the former Executive Vice President and Chief Diversity Officer of Comcast/NBC-Universal, who was directly involved in putting together the sham MOUs and obtaining government approval for the Comcast acquisition of NBC Universal, thus creating a serious conflict of interest.” Otherwise, the suit says, seemingly African-American channels on Comcast service are mere “window dressing” and actually “fronts” for white-owned companies.
Similar to the $10 billion suit the NAAAOM and Entertainment Studios filed against AT&T and DirecTV last year, this latest legal action claims Comcast deliberately doesn’t currently work with or carry “100 % African American–owned media” despite promises to do so. It also alleges that the cable giant uses a “Jim Crow” process in allowing African-American channels on its service. “Comcast has reserved a few spaces for 100% African American–owned media in the ‘back of the bus’ while the rest of the bus is occupied by white-owned media companies,” the compliant that Louis Miller, Amnon Siegel and Lauren Wright of LA firm Miller Bardondess LLP filed last week. “This is the epitome of racial discrimination in contracting.”
In what could be yet another blow to the Comcast and Time Warner Cable desire to merge, the lawsuit has some hard numbers as well. “Of the approximately $11 billion in channel carriage fees that Comcast pays to license television channels each year, less than $3 million is paid to 100% African American–owned media,” says the complaint. “Nor does 100% African American–owned media see much, if any, of the additional, approximate $4 billion Comcast spends each year on advertising.”
The case has been assigned to District Judge Percy Anderson and Magistrate Judge Margaret Nagle.
Here’s the statement from Comcast:
We do not generally comment on pending litigation, but this complaint represents nothing more than a string of inflammatory, inaccurate, and unsupported allegations. We are proud of our outstanding record supporting and fostering diverse programming, including programming from African American owned and controlled cable channels. We currently carry more than 100 networks geared toward diverse audiences, including multiple networks owned or controlled by minorities.
Diversity organizations from across the country, including numerous diverse programmers, have supported our transaction with Time Warner Cable. That deal will extend our industry-leading commitment to diverse programming to even more homes across America, one of the reasons so many groups in the African American community have supported it.
Comcast has engaged in good faith negotiations with this programmer for many years. It is disappointing that they have decided to file a frivolous lawsuit. We will defend vigorously against the scurrilous allegations in this complaint and fully expect that the court will dismiss them.
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