February 26, 2020

Comcast Corp. v. National Association of African American-Owned Media

CIVIL RIGHTS

Can a Plaintiff State a Claim Under 42 U.S.C. § 1981 by Alleging that Racial Discrimination Was a Motivating Factor, or Must the Plaintiff Allege that Race Was the But-for Cause, in the Defendant’s Refusal to Contract?

CASE AT A GLANCE

Entertainment Studios Networks, Inc., a media company owned solely by an African American entrepreneur, sought to obtain carriage for its television channels on Comcast Corporation’s cable distribution platform. Comcast declined, offering shifting explanations for its refusal, but finally stating that it lacked sufficient bandwidth to carry Entertainment Studios’ channels. Entertainment Studios sued, arguing that racial discrimination motivated Comcast’s refusal in violation of federal law.

Docket No. 18-1171
Argument Date: November 13, 2019
From: The Ninth Circuit
by Steven D. Schwinn
University of Illinois Chicago John Marshall Law School, Chicago, IL

INTRODUCTION

Through 42 U.S.C. § 1981(a), all individuals within the United States shall have the same right…to make and enforce contracts…as is enjoyed by white citizens….” All parties agree that the provision bans racial discrimination in contracting. But the Court has never said whether a plaintiff must allege that a defendant would not have denied a contract but for the plaintiff’s race, or merely that racial discrimination was a motivating factor behind the defendant’s actions.

ISSUE

Must a plaintiff allege that a defendant would not have denied a contract but for the plaintiff’s race in order to state a claim under 42 U.S.C. § 1981?

FACTS

Entertainment Studios Networks, Inc., is a media company that produces television series, owns and operates multiple television channels, and operates a full-service movie production and distribution company. It is wholly owned by Byron Allen, an African American entrepreneur and entertainer.

As relevant here, Entertainment Studios owns seven channels (JusticeCentral.TV, Cars.TV, ES.TV, MyDestination.TV, Pets.TV, Comedy.TV, and Recipe.TV) that are carried by major multichannel video programming producers, including Verizon FIOS, AT&T U-verse, DirecTV, Suddenlink, RCN, CenturyLink, and others.

Starting in 2008, Entertainment Studios sought to obtain carriage for these channels on Comcast’s cable distribution platform. In response, Comcast offered encouragement—saying, for example, that Entertainment Studios’ channels were “good enough” and that they were on the “short list” for imminent carriage—but all the while shifting descriptions of its approval process and changing instructions for Entertainment Studios. Finally, Comcast declined to carry the channels, stating that it lacked sufficient bandwidth to carry them.

Entertainment Studios saw this explanation as pretextual. It noted that Comcast was “the largest cable distributor with an advanced, state-of-the-art platform,” that had plenty of bandwidth to carry the channels. Moreover, Entertainment Studios noted that “[o]f the more than 500 channels carried by Comcast’s major competitors—Verizon FIOS, AT&T U-verse, and DirecTV— Comcast carries every single one of those channels, except the Entertainment Studios Channels.” Entertainment Studios also maintained that Comcast offered carriage contracts to “lesser-known, white-owned” networks “at the same time that it informed Entertainment Studios that it had no bandwidth or carriage capacity.” Finally, Entertainment Studios noted that one Comcast executive told Entertainment Studios, “We’re not trying to create any more Bob Johnsons”—the African American founder of Black Entertainment Television.

Entertainment Studios sued Comcast under 42 U.S.C. § 1981. After Entertainment Studios filed two amended complaints, the district court dismissed the case. The United States Court of Appeals for the Ninth Circuit reversed. The Ninth Circuit held that Entertainment Studios plausibly alleged that racial discrimination was one motivating factor in Comcast’s denial, even if Comcast had other, race-neutral reasons for its decision. (Remember, the case is only at the pleading stage, so the Ninth Circuit’s ruling only allowed the case to move forward to discovery. It is not a final ruling in favor of Entertainment Studios.) This appeal followed.

CASE ANALYSIS

Originally enacted as part of the Civil Rights Act of 1866, 42 U.S.C. § 1981(a) provides that “[a]ll persons within the jurisdiction of the United States shall have the same right…to make and enforce contracts…as is enjoyed by white citizens….” All parties agree that the provision bans racial discrimination in contracting. But the Court has never said whether a plaintiff must allege that a defendant would not have denied a contract but for the plaintiff’s race, or merely that racial discrimination was a motivating factor behind the defendant’s actions. The but-for standard is much higher; it requires a plaintiff to allege and prove that race was the determinative factor driving the defendant’s actions. In sharp contrast, the motivating-factor standard simply requires the plaintiff to allege and prove that race was one motivating factor, perhaps among several, and not necessarily the determinative motivating factor.

Here’s how the plaintiff illustrates the difference:

Suppose that Comcast sent a letter to Entertainment Studios at the conclusion of contract negotiations. In that letter, Comcast listed three reasons why it refused to contract: (1) Entertainment Studios is owned by an African American and Comcast does not want to contract with an African American; (2) Entertainment Studios’ channels are not sufficiently distributed on Comcast’s competitors’ platforms to warrant carriage; and (3) Comcast believes that its viewers would prefer other programming.

Under the but-for standard, Comcast would prevail, unless the plaintiff could allege facts that plausibly refute the race-neutral reasons for declining to contract. This would be very difficult to do, given that the plaintiff must make the allegations in the complaint, before discovery, in order to survive a motion to dismiss (as here). In contrast, under the motivating-factor standard, the plaintiff could prevail, because race was one factor that led to the decision, even if it wasn’t the dominant factor.

This case comes to the Court on a motion to dismiss. That means that the precise issue is which standard the plaintiff must plead or allege in the complaint in order to prevail on a motion to dismiss.

Comcast argues that the text, history, and structure of 42 U.S.C. § 1981 all confirm that a plaintiff must plausibly plead that a defendant would not have made a decision but for the plaintiff’s race. As to text, Comcast says that “[w]here a Section 1981 plaintiff would have been denied a contract even if he were white, he plainly has not been denied the ‘same right’ to contract as white citizens.” As to history, it claims that Congress originally enacted Section 1981 at a time when “but-for causation was an indispensable element of common-law torts.” Comcast maintains that the motivating-factor standard only worked its way into civil rights law more than a century later, in the Civil Rights Act of 1991, and that Congress only applied the motivating-factor standard to other particular antidiscrimination provisions. Moreover, it notes that Congress indeed made changes to Section 1981 in the Civil Rights Act of 1991, but in different respects (not adding a motivating-factor standard), further underscoring congressional intent to leave the but-for standard in place. Comcast says that Court precedents verify its reading. Finally, as to structure, Comcast asserts that the lack of the phrase “because of race” in Section 1981 does not mean that it does not require but-for causation. Comcast claims that courts have read but-for causation into Section 1981 actions, and, in any event, the default rule for antidiscrimination claims is but-for causation.

Comcast argues next that Entertainment Studios failed to plausibly allege that race was a but-for cause of its decision not to carry Entertainment Studios’ networks. Comcast claims that Entertainment Studios failed to rebut the race-neutral reasons for its decision. It also points out that it entered into carriage agreements with other African American-owned networks during the same period when it declined to carry Entertainment Studios’ channels, and that it has carried, and continues to carry, other networks owned wholly by African Americans. Comcast contends that Entertainment Studios did not plausibly allege any lesser-known, white-owned networks that Comcast carried were similarly situated to Entertainment Studios.

(The government, weighing in to support Comcast, makes similar arguments. The government emphasizes that using a burden-shifting approach, as Entertainment Studios advocates, described below, is inappropriate in this case.)

Entertainment Studios counters that Court precedent compels the Court to apply the motivating-factor standard. It claims that the Court held in Patterson v. McLean Credit Union, 491 U.S. 164 (1989), that the burden-shifting framework under Title VII applies to Section 1981 claims and that this framework incorporates the motivating-factor standard at the pleading stage. (The Title VII burden-shifting framework requires a plaintiff to first submit evidence that merely raises an inference of discrimination, or that race was a motivating factor. The defendant then may produce evidence of a race-neutral reason for discrimination.) Entertainment Studios contends that Congress abrogated a different portion of Patterson in the Civil Rights Act of 1991, but did not alter this holding. Under the burden-shifting framework, Entertainment Studios says that “[t]he defendant, of course, would have an opportunity to present evidence at summary judgment or trial that it had race-neutral reasons for its conduct.”

Entertainment Studios argues next that the plain language of Section 1981 requires a plaintiff to plead only that race was a motivating factor. It says that when a defendant uses race as a motivating factor in its decision, it is necessarily denying an African American plaintiff the “same” right to contract as a white person. “African Americans and whites are not treated identically if race is a motivating factor in the denial of a contract to an African American individual.” Moreover, Entertainment Studios maintains that Section 1981 does not contain the phrases “because of” or “based on,” or any other phrase that courts have used to connote but-for causation.

Entertainment Studios also argues that the history of Section 1981 supports its reading. It claims that Congress originally enacted the provision as part of the larger Civil Rights Act of 1866 that was designed to reject the common law at the time where it was “deficient” in furnishing “suitable remedies.” In any event, it contends that the common law required only but-for causation for negligence cases, not intentional torts like Section 1981. It asserts that at the time of Section 1981’s enactment, “causation was not an issue” for intentional torts.

Finally, Entertainment Studios argues that the purpose of Section 1981 supports its reading. It claims that the Civil Rights Act of 1866 was designed as a “comprehensive statute forbidding all racial discrimination affecting the basic civil rights enumerated in the Act.”

SIGNIFICANCE

This case is important because it tests the pleading standard for a key civil rights law. If the Court rules for Comcast and sets the standard at but-for causation, as Entertainment Studios points out, this would make it very difficult for civil rights plaintiffs to enforce Section 1981. Indeed, such a ruling could effectively cut off many of those cases before they even get going. That’s because a plaintiff, in order to survive a motion to dismiss (as here), would have to plausibly plead that race was the determinant factor in a defendant’s decision. In a mixed-motive case, involving both race-based and race-neutral factors, a plaintiff at the pleading stage would not ordinarily have access to evidence that could demonstrate that race predominated, or that a defendant’s putative race-neutral reasons were pretextual, because such evidence would be in the hands of the defendant. A defendant could prevail on a motion to dismiss simply by writing a letter like the one that the plaintiff conceived, above.

On the other hand, if the Court rules for Entertainment Studios and sets the standard at motivating factor, this would allow more Section 1981 cases to move forward to discovery and even trial. As the Chamber of Commerce argued as amicus in support of certiorari, this could “impose substantial burdens and costs on businesses.” In particular, according to the Chamber, the lower standard “will punish and deter legitimate employment actions, disrupt workplaces, and impose unwarranted costs and reputational harms on businesses.”

Still, Entertainment Studios seems to have an answer for that, at least if the Court uses a burden-shifting approach: “The defendant, of course, would have an opportunity to present evidence at summary judgment

Steven D. Schwinn is a professor of law at the University of Illinois Chicago John Marshall Law School and coeditor of the Constitutional Law Prof Blog. He specializes in constitutional law and human rights. He can be reached at sschwinn@jmls.edu or 312.386.2865.

PREVIEW of United States Supreme Court Cases 47, no. 2 (November 4, 2019): 35–37. © 2019 American Bar Association

ATTORNEYS FOR THE PARTIES

  • For Petitioner Comcast Corporation (Miguel A. Estrada, 202.955.8257)
  • For Respondent National Association of African American-Owned Media (Erwin Chemerinsky, 510.642.6483)

AMICUS BRIEFS

In Support of Petitioner Comcast Corporation

  • Center for Workplace Compliance (Rae Thiesfield Vann, 202.629.5600)
  • Chamber of Commerce of the United States of America (Gregory George Garre, 202.637.2207)
  • United States (Noel J. Francisco, Solicitor General, 202.514.2217)
  • Washington Legal Foundation (Richard A. Samp, 202.588.0302)

In Support of Respondent National Association of African American-Owned Media

  • Employment Law Professors (Sandra F. Sperino, 513.556.0193)
  • Issues4Life Foundation (Catherine Wynne Short, 707.224.6675)
  • Law & History Professors (Eugene Roy Fidell, 202.256.8675)
  • Lawyers' Committee for Civil Rights Under Law (Dariely Rodriguez, 202.662.8600)
  • Members of Congress (Brianne Jenna Gorod, 202.296.6889)
  • NAACP Legal Defense & Educational Fund, Inc. (Kristen Adrina Johnson, 212.965.2200)
  • Professor W. Burlette Carter (Willieta Burlette Carter, 202.994.5155)
  • Torts Scholars (Paul Lindsey Hoffman, 310.717.7373)