Byron Allen Loses $100 Million Lawsuit Against McDonald's: What Was The Case?
Byron Allen has lost the $100 million lawsuit against the global fast food chain McDonald’s. In the lawsuit, Allen’s company accused the fast-food giant of lying when it pledged to increase national ad spend with Black-owned outlets by the end of 2024. On Sunday, a Los Angeles Superior Court judge dismissed the lawsuit finding that McDonald’s will likely win the case if it’s allowed to proceed since the company still has more time to live up to its vow, The New York Post reported.
What Was the Case Against McDonald's?
Amid racial discrimination allegations, McDonald's in 2021 announced a self-described “four-year plan” to increase its national media spending with Black-owned media companies.
At the time, McDonald’s press release said that the allocation of ad spends in diverse-owned partners including Black, Hispanic, Asian Pacific American, Women, and LGBTQ-owned platforms will increase from 4% to 10% of its national ad spend between 2021 and 2024. The release specifically stated that McDonald’s spending with Black-owned media companies will increase from 2% to 5% in the period.
McDonald’s U.S. announced today that it will increase the portion of its advertising spend that goes to diverse-owned creators by more than double over the next four years. https://t.co/l4RL2L08Ya— ADWEEK (@Adweek) May 20, 2021
However, assessing the fast-food chain’s plan, Allen’s Weather Group, LLC which operates under the Allen Media Group (AMG) and Plaintiff Entertainment Studios Networks, concluded that McDonald’s had done nothing to stand up to its promise and its press release was a publicity stunt to make business gains.
In a declaration to the court, AMG chief revenue officer Darren Galatt stated that they submitted a proposal for $30 million in ad spend to McDonald’s, which was rejected by the company. In turn, the company offered to spend only a fraction of that amount. He further attested that McDonald’s needs to spend roughly $25 million with Black-owned media by this year to stand true to its commitment.
Therefore, the suit which looked for upwards of $100 million alleged that the company committed to promote sales and avoid a mass boycott of its business at the time.
McDonald’s is being sued by media mogul Byron Allen’s company over racial discrimination. https://t.co/a2Wro7Ef7H— Ad Age (@adage) May 20, 2021
Moving for dismissal of the suit, McDonald’s argued that the suit brought on by Allen’s media company was intended to restrict its free speech rights as it is based on a press release, which was part of a national dialogue about racial inequality and systemic racism.
Late last week, Superior Court Judge Mel Red Recana decided McDonald’s motion to strike the initial complaint under the Golden State’s anti-SLAPP statute was applicable and dismissed the suit.
The judge noted that the company did not engage in a “false promise,” as the plaintiffs claim, and emphasized that the lawsuit was premature as the deadline had not passed.
“Defendant still has about 11 months remaining in this year to perform on its promise and commit to spending the necessary amount with Black Owned Media. It is purely speculative to conclude Defendant will not perform on its promise even if Defendant has not yet committed the amount needed in spending,” the judge noted, according to a Deadline report.
⬇️⬇️⬇️— TheWrap (@TheWrap) February 7, 2024
Byron Allen’s $100 Million McDonald’s Lawsuit Dismissed by Judge as ‘Purely Speculative’
The media mogul had accused the fast food giant of not honoring a pledge to increase ad-spending with Black-owned media.https://t.co/go51D8PcJC
Further, on the allegation of the plaintiff that McDonald's made the claims to promote the sale of goods or services, the judge stressed that the company never touted its food products in the release.
What's Next For McDonald's And AMG?
Following the dismissal of the case, McDonald’s said in a statement that the court’s dismissal proves that “this was just another frivolous lawsuit brought by Byron Allen as part of his smear campaign against” the company.
However, in a report from The Hollywood Reporter, Louis Miller, a lawyer representing the Allen Media Group, said the ruling will be appealed as the California law bars “companies from making false statements to the public.”
Further, there is a parallel suit running against McDonald’s from AMG in federal court. The suit alleged that the company engages in racial stereotyping through a tiered advertising structure that discriminates based on race. “That lawsuit against McDonald’s is alive and well — and is headed for trial,” Miller said in a statement as per the report.
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