Correction: An earlier version of this story incorrectly reported that the case had been decided. In fact, the case has not yet been argued, and the ruling by the Ninth Circuit decided a procedural question that will allow the lawsuit to continue.
A racial bias lawsuit involving one of the nation’s largest cable companies will be allowed to proceed after a black-owned provider of television programming alleged it had been discriminated against, a federal appeals court has ruled.
Not only did racial animus pose a plausible factor when Charter Communications repeatedly rejected negotiations with Entertainment Studios, the TV programmer, but the First Amendment cannot be used to throw out the suit, according to the U.S. Court of Appeals for the Ninth Circuit.
The three-judge panel’s decision on the free speech issue holds particularly sweeping implications, some legal experts say, because it could undercut a rising trend of companies citing the First Amendment to defend business practices or to attack regulation.
The opinion on Charter’s motion to dismiss also marks a victory for the 25-year-old programming firm founded by comedian Byron Allen, which bought the Weather Channel in March and accused Charter executives in court of hurling racist insults at Allen and other black Americans in numerous encounters.
In one alleged instance, Charter chief executive Tom Rutledge called Allen, who is black, “boy” at an industry conference and advised him to change his behavior, according to court documents. In another alleged example, the court said, Charter’s senior executive in charge of programming, Allan Singer, approached a group of black protesters outside Charter’s offices to tell them to “get off of welfare."
Charter told the court that its decision not to carry Entertainment Studios was not related to race but rather other factors, such as that the company lacked operational resources.
The court sided with Entertainment Studios, citing arguments that Charter had negotiated or struck lucrative agreements with white-owned companies even as the black-owned company was denied the same opportunities.
“Corporate red tape, inconsistent decision-making among network leadership, and even boorish executives are not themselves necessarily indicative of discrimination,” the court said. But Charter had not done enough to prove that racial bias played no role in its decision-making — only that it was not the most important factor, the court said. For Charter to win the motion to dismiss, the judges said, the company’s explanation would have had to render Entertainment Studios’ allegations implausible.
Without addressing the substance of the dueling claims, the court said, Entertainment Studios received the benefit of the doubt.
Charter’s next steps in the legal battle are unclear. But in a statement on the decision, the company vowed to continue fighting, calling Entertainment Studios' lawsuit “a desperate tactic that this programmer has used before” and promising to “vigorously defend ourselves against these claims.”
“These decisions are hugely important in terms of opening the courts to African American-owned media,” said Skip Miller, an attorney for Entertainment Studios.
As part of its defense, Charter had told the court that by choosing which channels to carry, the company was engaging in a form of editorial discretion protected by the First Amendment. Therefore, it said, the court would have to use a stricter standard to evaluate Entertainment Studios’ claim of a legal violation — a standard that might result in the claim being rejected.
The Ninth Circuit said otherwise, saying that just because Charter engages in corporate speech when it selects which channels to carry does not “automatically” require the court to use the tougher standard.
Consumer groups hailed the court’s move, saying it is a necessary check on industries that have cited corporate speech as a reason to eliminate regulation.
“In a time when the First Amendment is often ‘weaponized’ to serve the business interests of large corporations instead of furthering free expression, this is a welcome decision,” said the advocacy organization Public Knowledge, which noted that telecom and cable groups have supported a lawsuit that argued the federal government had infringed on Internet providers' free speech rights when it approved tough net neutrality rules in 2015.