In a legal victory for McDonald’s, a California judge has ended a lawsuit against the fast food chain brought by media entrepreneur Byron Allen. The suit claimed McDonald’s was not on pace to meet a 2021 commitment to increase ad spending with diverse-owned media.
In May 2021, McDonald’s, a significant radio advertiser, announced plans to increase the share of national ad dollars it spends with Black-owned properties, from two percent to five percent by 2024.
In an order issued last Friday, Judge Mel Red Recana dismissed the lawsuit on free speech grounds. Moreover, the judge noted that 2024 is barely underway and the fast food chain still has time to make good on its self-imposed deadline.
“It is purely speculative to conclude (McDonald’s) will not perform on its promise, even if (it) has not yet committed the amount needed in spending,” Recana wrote in the order, as reported by Ad Age.
Louis R. "Skip" Miller, an attorney representing Allen, said in a statement that they disagree with the decision. “The California legislature enacted a law, Civil Code Section 1711, prohibiting companies from making false statements to the public. This lawsuit seeks to uphold that law,” Miller said in the statement. We’re going to appeal this decision.”
An attorney for McDonald’s called the decision “a very significant win” for the company and said there’s “no chance” the judge would overturn the decision on appeal because his order gave multiple bases for “throwing the case out.” Rather than dismissing the case on technical grounds, the judge said the arguments McDonald’s attorneys made in rebutting the suit “allowed the judge to pull the curtain aside and look at the merits or lack thereof.”
The impact of efforts to increase ad spending with minority-owned media by McDonald’s, General Motors, and Procter & Gamble has been felt by minority held radio companies, such as Urban One. “We built a brand on serving the African-American community,” CEO Alfred Liggins said during the company’s second quarter 2022 earnings call. “So, with advertisers actually waking up and saying, ‘I want to put more money against this demo,’ I think we're benefiting from 42 years of brand building, of being committed to this space.”