Supreme Court Decides Comcast Corporation v. National Association of African American-Owned Media

Faegre Drinker Biddle & Reath LLP

Faegre Drinker Biddle & Reath LLP

On March 23, 2020, the U.S. Supreme Court decided Comcast Corporation v. National Association of African American-Owned Media, No. 18-1171, holding that the but-for causation standard applies to claims of racial discrimination raised under 42 U.S.C. § 1981.

Entertainment Studios Network (ESN), which operates seven television networks, is owned by an African American entrepreneur, Byron Allen. ESN entered into negotiations with Comcast, a large cable television conglomerate, but the negotiations failed. Comcast cited lack of demand for ESN’s programming, bandwidth constraints, and its preference for news and sports programming that ESN did not offer.

ESN sued, claiming Comcast systematically disfavored “100% African American-owned media companies.” ESN raised a claim under § 1981, which guarantees “[a]ll persons . . . the same right . . . to make and enforce contracts . . . as is enjoyed by white citizens.” Comcast moved to dismiss for failure to plausibly allege facts to support that “but for racial animus, Comcast would have contracted with ESN.” The district court allowed ESN to amend three times before denying further amendments as futile. The U.S. Court of Appeals for the Ninth Circuit reversed on the basis that the district court applied the wrong causation standard to ESN’s pleadings. The Ninth Circuit held that a plaintiff only needed to “plead facts plausibly showing that race played ‘some role’ in the defendant’s decisionmaking process.”

The Supreme Court unanimously reversed and held that the but-for causation standard governs § 1981 claims. The but-for causation standard, the Court noted, supplies the “default” or “background” rule for new causes of action. Against this backdrop, the plain language of the statute, giving each person the “same right . . . as is enjoyed by white citizens,” was “suggestive” of but-for causation because it invoked the question, “What would have happened if the plaintiff had been white?” The history of the Civil Rights Act of 1866 and the Court’s § 1981 precedent also supported the but-for causation standard’s application to § 1981 claims because precedent had repeatedly used “language — because of — often associated with but-for causation.” Finally, the Court emphasized that the but-for causation standard will apply at all stages of a case because the “essential legal elements of a claim” do not change during the life of a lawsuit.

The Court expressly declined to decide whether § 1981(a) guarantees only “the right to equivalent contractual outcomes (a contract with the same final terms)” or if it also guarantees “the right to an equivalent contracting process (no extra hurdles on the road to securing that contract),” as the scope of the right protected under § 1981(a) was not properly raised in the lower courts or in the petition for certiorari.

Because the Ninth Circuit had not evaluated ESN’s pleadings under the but-for causation standard, the Court vacated the judgment of the court of appeals and remanded the case for further proceedings.

Justice Gorsuch delivered the opinion of the Court, in which Chief Justice Roberts and Justices Thomas, Breyer, Alito, Sotomayor, Kagan, and Kavanaugh joined, and which Justice Ginsburg joined except for the footnote. Justice Ginsburg concurred in part and concurred in the judgment.

Download Opinion of the Court.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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