Seventh Circuit Upholds McCoy Discrimination Case Dismissal

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A renewed racial discrimination fight against the nation’s two direct broadcast satellite (DBS) providers will not proceed for DuJuan McCoy and his Circle City Broadcasting, thanks to a federal appeals court decision delivered Tuesday (4/16) that upholds a lower court’s dismissal of the case.


 

 

As RBR+TVBR first reported in January, McCoy sought reconsideration of a pair of lawsuits brought against Dish and DirecTV in 2020 by the U.S. Court of Appeals for the Seventh Circuit in Chicago.

With Andrew McNeil of Bose McKinney & Evans LLP as his legal counsel, McCoy’s arguments that racial discrimination charges against both DirecTV and Dish be reinstated were presented to the three-judge appellate court. In his view, McCoy believes Circle City Broadcasting is the victim of race preferences, as both DirecTV and Dish refused to negotiate retransmission consent agreements for both WISH-8 and WNDY-20 in Indianapolis.

In the first case, McNeil argued that AT&T and DirecTV negotiated under a pretext of potentially offering compensation to air its stations before eventually revealing the company would not agree to monetary payments.

It was also argued that DirecTV “redlined” the Black-owned television broadcasting company through what McCoy calls “an unprecedented move” that blocked it from receiving the same payments made to WISH-8’s previous owner, Nexstar Media Group.

At issue is a “reset” of retransmission consent fees, and for McCoy he sought to establish a race-based argument. That argument did not pass muster with Judge Tanya Walton Pratt, the Chief Judge for the U.S. District Court for the Southern District of Indiana. In seeking the appeal, McNeil disputed her decision to remove the racial discrimination claim.

The Seventh Circuit could not be swayed.

“When DISH and DirecTV Network declined to pay broadcast fees to Circle City Broadcasting for rights to carry the company’s two Indianapolis-based television stations, the dispute entered federal court,” circuit judge Michael Scudder explained in the court’s ruling. “Circle City alleged that the decisions reflected discrimination against its majority owner, DuJuan McCoy, a Black man, and thus discrimination against the company itself. The district court entered summary judgment for DISH and DirecTV, concluding that Circle City failed to identify evidence permitting a jury to find that the decisions not to pay the broadcast fees reflected anything other than lawful business choices responsive to dynamics of the television broadcast market. We affirm.”

Noting that “this case is all about decisions by DISH and DirecTV to stop paying fees for the right to broadcast two television stations operating in Indianapolis,” the court explained how Nexstar Media Group sold WNDY-TV and WISH-TV. And, when that transpired, their negotiating power and leverage of being the No. 1 owner of broadcast TV station in the U.S. evaporated. That Circle City doesn’t have the same sway in getting similar retransmission fees from the two DBS providers is core to the case.

And, this provided the lower court and the appeals court with the basis for its judgment.

“Circle City failed to point to any facts that would allow a jury to find that DISH’s conduct during the contractual negotiations reflected racial discrimination,” Scudder said. “To the contrary, the district court saw the evidence as permitting only one conclusion: DISH declined to pay fees for rights to broadcast WISH and WNDY because Circle City—unlike Nexstar—as the new owner of both stations lacked the market power to demand
the fees.”

Further, “Circle City’s negotiations with DirecTV traveled a similar course,” the appeals court declared. “Circle City devotes major portions of its briefs to trying to persuade us that DISH and DirecTV did not offer perfectly consistent explanations for declining to pay retransmission fees. And from there Circle City insists that the true explanation must be discrimination. But therein lies the flawed reasoning—no evidence supports the link between the company’s contention and its conclusion. To survive summary judgment, Circle City needed to produce evidence permitting a finding that any pretextual explanations masked racial discrimination. The district court could hardly have been more careful and thorough in its review of the evidence, and, on this point, it saw nothing pretextual about DISH and DirecTV’s decisions. Nor do we.”

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