Labor & Employment Law Daily African-American-owned TV network advances plausible Section 1981 claim against Charter Communications
Tuesday, November 27, 2018

African-American-owned TV network advances plausible Section 1981 claim against Charter Communications

By Harold S. Berman J.D.

An African-American-owned television network operator stated a plausible § 1981 race discrimination claim against a cable company that refused to enter into a contract, the Ninth Circuit ruled. Affirming the district court’s refusal to dismiss, the appeals court found that under U.S. Supreme Court precedent, the network operator needed to show only that discriminatory intent was a motivating factor in denying the contract. The network operator stated a plausible discrimination claim, pointing to white-owned companies that the cable company treated more favorably. The network operator’s § 1981 claim survived First Amendment scrutiny because the statute only prevented discrimination and did not seek to regulate the cable company’s content (National Association of African American-Owned Media v. Charter Communications, Inc., November 19, 2018, Smith, M.).

No contract. The African American-owned television network operator tried to secure a carriage contract with Charter Communications, a national cable television company. Despite trying for five years, and securing contracts with over 50 other companies, the network operator was unable to secure a contract with Charter.

Refusal to even meet. Specifically, Charter’s senior vice president of programming refused to meet with the network operator’s representatives for several years. Although the vice president claimed the company was not considering new opportunities, it negotiated with several white-owned networks during that time. Charter claimed it lacked faith in the network operator’s “tracking model,” but nevertheless contracted with white-owned companies that used the same tracking model. When the network operator finally obtained a meeting with the vice president, he made clear that the network operator would not enter into a contract. The vice president offered allegedly insincere explanations for his decision, such as wanting first to see what AT&T would do, even though AT&T already carried the network operator’s programming.

Racial remarks. The network operator also alleged that Charter evidenced racial bias, with the vice president telling an African-American group protesting outside the cable company’s headquarters “to get off of welfare,” and accusing them of looking for a “handout.” At a subsequent event, Charter’s CEO allegedly refused to converse with the network operator’s owner, calling him “boy.”

Lawsuit. The network operator, along with the National Association of African American-Owned Media, sued Charter in federal district court, alleging racial discrimination in contracting in violation of 42 U.S.C. § 1981. Charter moved to dismiss, contending that the network operator failed to plead that racial animus was the but-for cause of the cable company’s conduct and that the First Amendment barred a § 1981 claim. The district court denied the motion to dismiss, determining that the network operator was required only to plead that racism was a motivating factor in Charter’s decision, and that programming activity was not subject to a strict scrutiny standard under the First Amendment. The cable company appealed.

Causation standard. The Ninth Circuit rejected Charter’s argument that two U.S. Supreme Court decisions required the court to apply a but-for causation standard. In Metoyer v. Chassman, the appeals court had held that § 1981 claims were determined under the same principles applied to Title VII disparate treatment claims, and consequently, a defendant could be held liable if racial discrimination was a motivating factor in its decision, even if it would have made the same decision absent discriminatory intent.

Motivating factor standard. But the Supreme Court applied a but-for causation standard to ADEA claims in Gross v. FBL Fin. Servs., Inc., and to Title VII retaliation claims in Univ. of Tex. Sw. Med. Ctr. v. Nassar, determining that the texts of those statutes necessitated applying a but-for standard. Although Metoyer’s thematic application of Title VII principles to § 1981 claims was incompatible with Gross’ focus on the specific text of each statute to determine the correct causation standard, the appeals court’s textual analysis of § 1981 under Gross nevertheless caused it to conclude that the network operator’s § 1981 claim required the application of a motivating factor rather than a but-for causation standard.

Although the ADEA and Title VII retaliation language analyzed under Gross and Nassar explicitly suggested a but-for causation standard, the statutory language of § 1981 suggested a motivating factor standard. The statute’s language, guaranteeing “the same right” to contract as white citizens, suggested that if discriminatory intent played any role in the decision not to contract, even if not the sole factor, then the plaintiff did not enjoy “the same right” as a white citizen.

Plausible claim. The Ninth Circuit next found that the network operator stated a plausible claim under § 1981. The complaint alleged numerous instances of contradictory, disingenuous, and disrespectful behavior by the cable company and its executives. These allegations, along with the network operator’s claims that white-owned companies were not treated similarly, were sufficient under § 1981 to plausibly claim that Charter denied the network operator the same right to contract as white-owned companies. Although Charter presented race-neutral explanations for its conduct, at the motion to dismiss stage, the appeals court was not permitted determine the persuasiveness of the cable company’s evidence.

First Amendment. The Court of Appeals also rejected Charter’s argument that the network operator’s § 1981 claim was barred by the First Amendment. The U.S. Supreme Court had ruled that cable operators were entitled to freedom of speech and press under the First Amendment. Although there was some ambiguity whether § 1981, which regulated conduct rather than speech, was subject to rational basis review or to heightened scrutiny where expressive conduct was involved, the network operator’s claim survived even heightened scrutiny.

Because § 1981 was content-neutral, it was subject at most to intermediate rather than strict scrutiny. § 1981 did not regulate the content of Charter’s programming, but rather required only that it reached its editorial decisions without discriminatory intent. That the statute prohibited the company from discriminating on the basis of race had no connection to the content of any channel Charter did or did not carry.

Additionally, the statute was narrowly tailored to serve the important government interest of preventing racial discrimination. Even expressive content, if it discriminated on the basis of race, was not entitled to First Amendment protection.

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