Byron Allen’s Allen Media Group filed a lawsuit May 4 against McDonald’s USA, LLC seeking damages in excess of $100 million for fraud/false promise, in violation of Cal. Civ. Code § 1711.
According to the lawsuit, McDonald’s made a commitment in 2021 to spend 2 percent of its billion-dollar advertising budget on Black-Owned Media in 2021, escalating to 5 percent by 2024.
Per the lawsuit, McDonald’s did not spend anywhere close to 2 percent on Black-Owned Media in 2021, and it is not remotely close to meeting its commitment today.
McDonald’s made this promise in an attempt to mislead the public about its commitment to spend with Black-Owned Media. In the wake of the George Floyd murder and the Black Lives Matter movement, the lawsuit alleges McDonald’s was an outlier among its peer corporations in that it failed to make a significant pledge to remedy racial and social justice issues.
After AMG notified McDonald’s of racial discrimination, McDonald’s rushed out a “plan” wherein it committed to more than double its advertising spend with Black-Owned Media.
Per the lawsuit, this “plan” was and is a lie. AMG is over 90 percent of the Black-Owned Media market. AMG is by far the largest African-American owned media company in the country. Given the paltry amounts McDonald’s was spending with AMG in 2021 when it made its pledge, there is no way McDonald’s was spending 2 percent of its advertising budget on Black Owned Media.
Today, McDonald’s is still spending de minimis amounts with AMG. Thus, McDonald’s is not anywhere close to meeting its commitment to the public and its shareholders. AMG seeks damages in excess of $100 million, along with punitive damages and a permanent injunction requiring McDonald’s to honor its commitment and spend at least 5 percent of its ad budget on Black-Owned Media with full transparency going forward as promised.
“During the Black Lives Matter movement, hundreds of corporations made pledges to Black America, and unfortunately, they have not lived up to them,” said Byron Allen, Founder/Chairman/CEO of Allen Media Group. “McDonald’s is one of those corporations that has lied and made false promises. We must hold each and every one these corporations, including McDonald’s CEO Chris Kempczinski, who was caught sending racist text messages, and its Board of Directors, fully accountable. The greatest trade deficit in America is the trade deficit between White corporate America and Black America, and we must close this trade deficit immediately.”
“This is a groundbreaking lawsuit based on a California law—Civil Code 1711—that holds corporations to their public promises and thereby redresses corporate fraud. That’s exactly this case,” said Skip Miller, partner in Miller Barondess, LLP and counsel for Allen Media Group. “Per the lawsuit, McDonald’s said one thing and did another. It promised to spend 5 percent of its billion-dollar a year ad budget on African American owned media—of which Allen Media is over 90 percent—and has not come close. Per our lawsuit, this is a fraud on our client and on the public. The lawsuit seeks to hold one of the largest corporations in the world responsible for its lies.”
Source: Press Release