Racial Discrimination

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7^th Circuit Court of Appeals

Case Name: Circle City Broadcasting I, LLC v. AT&T Services, Inc.

Case No.: 23-1787

Officials: Wood, Scudder, and Lee, Circuit Judges.

Focus: Racial Discrimination

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. 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.

The background of the case involves the complex dynamics of television broadcasting and retransmission agreements, where stations and networks negotiate fees with distributors like DISH and DirecTV to carry their channels. Historically, large networks like Nexstar, the previous owner of WISH and WNDY, could leverage their size to secure these fees. When McCoy’s Circle City acquired the stations, both DISH and DirecTV ended their fee-based retransmission agreements, citing a shift in market dynamics rather than the stations’ new ownership and McCoy’s race.

Circle City argued that DISH and DirecTV’s refusal to pay fees was discriminatory, impacting the financial valuation and operational capacity of its stations. However, the court found that the evidence did not support claims of racial discrimination but rather indicated that the decisions were influenced by the absence of bargaining power that Nexstar previously held, which Circle City lacked.

On appeal, the Seventh Circuit affirmed the district court’s decision, emphasizing that there was no evidence to suggest that DISH and DirecTV’s contract negotiations and decisions were racially motivated. The court pointed out that the change in ownership led to a new business context where DISH and DirecTV no longer saw the need to pay fees for WISH and WNDY, which could not command the same market influence as Nexstar. The court concluded that Circle City’s inability to demonstrate that racial discrimination was a factor in the contract disputes confirmed the legitimacy of the summary judgment in favor of the defendants.

Affirmed.

Decided 04/16/24

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