The US Supreme Court has agreed to hear a Comcast appeal in a case centering on whether the telecommunications giant discriminated against an African American-owned TV network operator by refusing to carry the company's channels on its cable service.
The case involves Byron Allen's Entertainment Studios Networks (ESN), which claimed that Comcast's refusal to carry ESN channels was racially motivated. Comcast tried to get the case thrown out of court before the central claim of racial bias could be ruled upon. But in November 2018, the US Court of Appeals for the 9th Circuit ruled that the case can move forward to a trial, saying that a US District Court improperly granted Comcast's motion to dismiss ESN's complaint.
Comcast subsequently petitioned the Supreme Court to take up the case. It told the court that ESN's claim is based on the purported existence of "an outlandish racist plot against '100% African American-owned media companies'—a contrived racial category gerrymandered to include Plaintiffs and virtually no one else."
The Supreme Court agreed to take up Comcast's appeal today. The court said it will consider one legal question raised in Comcast's petition: "Does a claim of race discrimination under 42 U.S.C. § 1981 fail in the absence of but-for causation?"
That's the discrimination law that ESN accused Comcast of violating. The 9th Circuit appeals court said that ESN's case could proceed because the plaintiffs "needed only to plausibly allege that discriminatory intent was a factor in Comcast's refusal to contract, and not necessarily the but-for cause of that decision." As the Legal Information Institute explains, a "but-for test" asks "but for the existence of X, would Y have occurred?"
The appeals court ruling that went against Comcast further said:
Here, Plaintiffs' [complaint] includes sufficient allegations from which we can plausibly infer that Entertainment Studios experienced disparate treatment due to race and was thus denied the same right to contract as a white-owned company, which violates § 1981. See 42 U.S.C. § 1981(a) ("All persons... shall have the same right in every State and Territory to make and enforce contracts... as is enjoyed by white citizens."). These allegations include: Comcast's expressions of interest followed by repeated refusals to contract; Comcast's practice of suggesting various methods of securing support for carriage only to reverse its position once Entertainment Studios had taken those steps; the fact that Comcast carried every network of the approximately 500 that were also carried by its main competitors (Verizon FIOS, AT&T U-verse, and DirecTV), except Entertainment Studios' channels; and, most importantly, Comcast's decisions to offer carriage contracts to "lesser-known, white-owned" networks (including Inspirational Network, Fit TV, Outdoor Channel, Current TV, and Baby First Americas) at the same time it informed Entertainment Studios that it had no bandwidth or carriage capacity.
ESN's eight networks are Cars.TV, Comedy.TV, ES.TV, JusticeCentral TV, MyDestination.TV, Pets.TV, Recipe.TV, and The Weather Channel. ESN and the National Association of African American Owned Media have been seeking a $20 billion judgment because of Comcast's refusal to pay for carriage of the channels. Comedian and media mogul Byron Allen founded ESN in 1993 and is the company's chairman and CEO.
Comcast: Court ignored other rulings
Comcast's petition to the Supreme Court said that five other US appeals courts have found that the but-for test is the "default rule" for this type of discrimination claim. "Nothing in the text of the statute purports to displace the common-law rule requiring but-for causation," Comcast told the Supreme Court. Comcast argued that the appeals court based its decision "not on any evidence that Congress intended to depart from the default rule of but-for causation, but instead because there was, in its view, a lack of evidence 'explicitly suggest[ing] but-for causation.'"
The Supreme Court declined to take up the other question raised in Comcast's petition, which asked, "Can a plaintiff state a plausible claim for relief if the complaint does not allege facts tending to exclude obvious alternative explanations for the challenged conduct and does not allege facts to support all elements of the claim?"
Comcast previously argued that the First Amendment prohibits ESN from suing to alter Comcast's selection of cable TV channels. Comcast argued that it has "editorial discretion regarding which networks to offer to its audience," just like a newspaper. But this argument was rejected by the appeals court, and Comcast didn't bother raising the First Amendment claim in its petition to the Supreme Court.
Allen predicted victory in the Supreme Court. "We have already prevailed in the US Court of Appeals for the 9th Circuit, and we are highly confident we will also prevail in the US Supreme Court," Allen said in a statement provided to Ars. "Comcast—one of the biggest lobbyists in Washington DC—will continue to lose this case, and the American people who stand against racial discrimination will win."
Comcast said it believes the 9th Circuit case "was incorrectly decided."
"At this stage, the case is about a technical point of law that was decided in a novel way by the 9th Circuit," Comcast said in a statement provided to Ars. "We hope the Supreme Court will reverse the 9th Circuit's unusual interpretation of the law and bring this case to an end."
Comcast also defended its record of "supporting and fostering diverse programming, including programming from African American-owned channels, two more of which we launched earlier this year."
"There has been no finding of discriminatory conduct by Comcast against this plaintiff because there has been none. We carry more than 100 networks geared toward diverse audiences," Comcast also said.
Allen's statement countered that "the networks Comcast refers to as 'African American-owned' are not wholly-owned by African Americans and did not get any carriage until I stood up and spoke out about this discrimination and economic exclusion."
Similar case against Charter still pending
ESN separately filed a similar lawsuit against Charter, the nation's second-biggest cable company after Comcast. The 9th Circuit appeals court ruled against both Charter and Comcast on the same day last November.
Charter also appealed to the Supreme Court, but the court hasn't said whether it will take up the Charter case. Either way, the Supreme Court's handling of the Comcast case could affect the outcome of ESN's battle against Charter.
Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.