By Andrew Chung
(Reuters) - The U.S. Supreme Court on Monday ordered a lower court to reconsider its decision to let comedian-turned-media executive Byron Allen's $10 billion lawsuit accusing cable television operator Charter Communications Inc (NASDAQ:CHTR) of discriminating against black-owned channels move forward.
The justices sent the case back to the San Francisco-based 9th U.S. Circuit Court of Appeals to take a second look at it after the Supreme Court ruled on March 23 in a similar lawsuit by Allen against Comcast Corp (NASDAQ:CMCSA) that the appeals court assessed the claims of racial bias using the wrong test.
Comcast and Charter had refused to carry channels operated by Allen's Entertainment Studios Networks. Allen is black.
The cases centered on whether under the Civil Rights Act of 1866, a post-Civil War law that forbids racial discrimination in business contracts, lawsuits like Allen's must show early on in the litigation that a failed deal was solely the result of discrimination. The 9th Circuit ruled in 2018 that discriminatory intent could be merely one factor among others.
The justices in the Comcast case unanimously found that to prevail "a plaintiff must initially plead and ultimately prove that, but for race, it would not have suffered."
The cable operators said their business decisions were based on capacity constraints, not race, and that Allen's channels, including Justice Central.TV and Cars.TV, did not show sufficient promise or customer demand to merit distribution.
Entertainment Studios Networks, which sued Charter in Los Angeles federal court in 2016, attributed the rejections primarily to racial discrimination. Comcast and Charter called the lawsuits a "scam" and sought to have them dismissed.