Decision of Note: Race Discrimination Claims Against Charter Cable Can Proceed

Charter's lawyers at Kirkland & Ellis argued on appeal that the trial judge, U.S. District George Wu in Los Angeles, had erred by allowing the suit to move past the motion-to-dismiss stage. Charter argued the plaintiffs had failed to plead that racial animus was the “but-for” cause of the company's actions.

But in a 26-page opinion penned by Circuit Judge Milan D. Smith Jr., the Ninth Circuit noted that “rather than adopting [Civil Rights Act] Title VII's motivating factor standard in this case, we must instead look to the text of §1981 to determine whether it permits a departure from the but-for causation standard, adding that 42 U.S.C. §1981 guarantees African-American-owned businesses 'the same right' to contract 'as is enjoyed by white citizens.'”

“If discriminatory intent plays any role in a defendant's decision not to contract with a plaintiff, even if it is merely one factor and not the sole cause of the decision, then that plaintiff has not enjoyed the same right as a white citizen,” Circuit Judge Smith wrote. “Even if racial animus was not the but-for cause of a defendant's refusal to contract, a plaintiff can still prevail if she demonstrates that discriminatory intent was a factor in that decision such that she was denied the same right as a white citizen.”

Charter Communications also argued that the First Amendment barred a §1981 race discrimination claim based on a cable operator's editorial discretion in programming decisions. But the appeals court found that Charter's alleged actions weren't protected by the First Amendment. “Section 1981 prohibits Charter from discriminating against networks on the basis of race,” Judge Smith wrote. “This prohibition has no connection to the viewpoint or content of any channel that Charter chooses or declines to carry.”

The plaintiffs, represented on appeal by Dean Erwin Chemerinsky of the University of California, Berkeley School of Law and lawyers at Miller Barondess in Los Angeles, claim Charter negotiated with other, white-owned networks during the same period that Charter executives continuously canceled and put off meetings with officials at Entertainment Studios. Charter executives purportedly said they didn't have faith in Entertainment Studios' “tracking model,” even though the company was alleged to have contracted with white-owned networks that used the same model. Charter also claimed to have “bandwidth” issues in taking on additional networks although it added white-owned networks in major markets, including RFD-TV, a network focused on rural and Western lifestyles, and the horror channel CHILLER.

The plaintiffs further allege that the Charter executive in charge of programming decisions approached an African-American protest group outside the company's headquarters and told them “to get off of welfare” and accused them of seeking a “handout.” The plaintiffs also claim Charter's CEO referred to Allen as “boy” and suggested the latter needed to change his behavior when Allen approached him at an industry event.

Louis “Skip” Miller of Miller Barondess said in an email statement that he and his clients were looking forward to taking discovery and preparing for trial. “The claim for racial discrimination based on Charter refusing to carry our client's television channels is of national importance,” he said.

Patrick Philbin, a former Kirkland & Ellis partner who has moved to a position in the White House counsel office while the case has been pending, argued at the Ninth Circuit for Charter. Kirkland partners Devin Anderson and Jeffrey Powell, who were also on the briefs alongside partners Paul Clement and Mark Holscher, didn't respond to messages seeking comment for this article.

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Ross Todd is bureau chief of The Recorder, a San Francisco-based ALM sibling of Entertainment Law & Finance.