Why Byron Allen’s $100 Million Fraud Lawsuit Against McDonald’s Was Dismissed

In May, Byron Allen‘s Allen Media Group filed a lawsuit against McDonald’s, claiming the firm failed to devote a larger share of its advertising budget to Black-owned platforms.

Allen claimed McDonald’s “lied” when it promised in May 2021 to increase national advertising spending with Black-owned media to 5% from 2% by 2024.

In court filings, the media entrepreneur stated that he would know if the food giant kept its pledge because his media empire owns more than 90% of Black-owned media. According to Reuters, he sought fresh business from McDonald’s but was turned down despite their pledge.

Furthermore, the case sought $100 million in punitive damages, claiming that McDonald’s violated a California anti-fraud statute prohibiting deceptive promises.

However, on Friday, February 2, a Los Angeles Superior Court judge rejected the case, stating that McDonald’s did not make a “false promise,” as the plaintiffs claimed. The judge noted that the food giant still has time to fulfill its pledge because 2024 has only just begun and has not passed.

“The court finds that Plaintiffs’ evidence fails to establish a prima facie case of Defendant’s nonperformance or intent not to perform at the time the claimed promise was made. According to the press release dated May 20, 2021, the defendant is “accelerating the allocation of advertising dollars to diverse-owned media companies, production houses, and content creators.”

McDonald’s will increase its investment in diverse-owned partners from 4% to 10% of national advertising spend by 2021-2024. Spending on Black-owned properties will rise from 2% to 5% of total national advertising spending over this time period.

“As the defendant points out, this action was filed before 2024, and the current year has only just begun and will not conclude. The judge stated that it is unclear how Plaintiffs may build a prima facie case of Defendant’s nonperformance when the deadline period has not yet gone.

Allen Media Group plans to appeal the ruling and pursue a $10 billion lawsuit against McDonald’s in federal court, alleging discriminatory advertising practices based on racial stereotyping and violations of civil rights.

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