Byron Allen sues McDonald's for allegedly lying about its commitment to black media

By Jonathan Stempel

(Reuters) – Media entrepreneur Byron Allen has filed a second lawsuit against McDonald's Corp over the fast food chain's alleged refusal to advertise to black-owned media outlets.

In a lawsuit filed last week in Los Angeles, Allen's Entertainment Studios Networks Inc and Weather Group LLC said McDonald's “lied” when it committed in May 2021 to increase national advertising spending with owned media outlets. Blacks from 2% to 5% by 2024.

Allen said he would know if McDonald's honored that commitment because his Allen Media Group represents more than 90 percent of Black-owned media outlets. He said he relied on McDonald's commitment when seeking new business from the company but was rebuffed.

The lawsuit seeks $100 million plus punitive damages for McDonald's alleged violation of a California anti-fraud law prohibiting false promises.

Allen's case adds to his $10 billion federal lawsuit claiming McDonald's advertising practices constitute “racial stereotyping” that violate federal and California civil rights laws.

In a statement, McDonald's said it is proud of its record of investing in diverse communities and partners.

“Byron Allen is filing baseless lawsuits as part of a public smear campaign against our company in an attempt to line his pockets,” he said. “We will not be constrained by these 'in terrorem' tactics and we will defend ourselves vigorously.”

Allen said in his own statement: “During the Black Lives Matter movement, hundreds of companies made commitments to Black America…McDonald's is one of those companies that lied and made false promises.”

In a court filing April 21, McDonald's lawyers said mediation to settle Allen's $10 billion lawsuit had failed and accused Allen of trying to “harass and harangue McDonald's to achieve to an undeserved resolve.

McDonald's cited an open letter Allen published in the Chicago Tribune on April 19, a day before the scheduled negotiations, attacking his alleged “horrific systemic racism against black people.”

The letter also called for the replacement of Chief Executive Officer Chris Kempczinski and the McDonald's board of directors.

Skip Miller, an attorney for Allen, declined in an interview to discuss mediation but called McDonald's filing “totally inappropriate. The whole point of mediation is for it to remain confidential.”

The cases are: Weather Group LLC et al v. McDonald's USA LLC, Superior Court of California, County of Los Angeles, No. 23STCV10045; and Entertainment Studios Networks Inc et al v. McDonald's Corp, United States District Court, Central District of California, No. 21-04972.

(Reporting by Jonathan Stempel in New York; editing by Aurora Ellis)