Aug. 11, 2018: Charter Communications logo displayed on a modern smartphone

A federal appellate court is allowing a group of African-American-owned television networks to pursue racial discrimination claims against Charter Communications Inc., the nation's third-largest cable provider.

The U.S. Court of Appeals for the Ninth Circuit on Monday upheld a lower court ruling denying Charter's bid to knock out discrimination claims brought by Entertainment Studios, a television and motion picture company owned by African-American comedian, actor and entrepreneur Byron Allen.

Allen claims that executives at Stamford, Connecticut-based Charter treated him and his network differently than white-owned companies, by repeatedly declining to meet with him from 2011 to 2016 about potentially picking up his seven networks as part of cable packages.

Charter's lawyers at Kirkland & Ellis argued on appeal that the trial judge, U.S. District George Wu in Los Angeles, had erred by allowing the suit to move past the motion to dismiss stage. Charter argued that the plaintiffs had failed to plead that racial animus was the “but-for” cause of the company's actions.

But in a 26-page opinion penned by Circuit Judge Milan D. Smith Jr., the Ninth Circuit held that Section 1981 guarantees African-American-owned businesses “the same right” to contract “as is enjoyed by white citizens.”

“If discriminatory intent plays any role in a defendant's decision not to contract with a plaintiff, even if it is merely one factor and not the sole cause of the decision, then that plaintiff has not enjoyed the same right as a white citizen,” Smith wrote. “Even if racial animus was not the but-for cause of a defendant's refusal to contract, a plaintiff can still prevail if she demonstrates that discriminatory intent was a factor in that decision such that she was denied the same right as a white citizen.”

The company had also argued that the First Amendment barred a Section 1981 race discrimination claim based on a cable operator's editorial discretion in programming decisions. But the court further found that Charter's alleged actions weren't protected by the First Amendment.

“Section 1981 prohibits Charter from discriminating against networks on the basis of race,” Smith wrote. “This prohibition has no connection to the viewpoint or content of any channel that Charter chooses or declines to carry.”

Byron Allen arrives at the ATAS Daytime Emmy Awards Nominees Reception at SLS Hotel at Beverly Hills on June 14, 2012, in Los Angeles.

Plaintiffs, represented on appeal by Dean Erwin Chemerinsky of the University of California, Berkeley School of Law and lawyers at Miller Barondess in Los Angeles, claim that Charter negotiated with other, white-owned networks during the same period that company executives continuously canceled and put off meetings with officials at Entertainment Studios. Charter executives purportedly said they didn't have faith in Entertainment Studios' “tracking model,” even though the company was alleged to have contracted with white-owned networks who used the same model. The company also claimed to have “bandwidth” issues in taking on additional networks although it added white-owned networks in major markets, including RFD-TV, a network focused on rural and Western lifestyles, and the horror channel CHILLER.

Plaintiffs further allege that the Charter executive in charge of programming decisions approached an African-American protest group outside the company's headquarters and told them “to get off of welfare” and accused them of seeking a “handout.” They also claim that Charter's CEO referred to Allen as “boy” when Allen approached him at an industry event and suggested that Allen needed to change his behavior.

Louis “Skip” Miller of Miller Barondess said in an email statement that he and his client were pleased with the decision and looking forward to taking discovery and preparing for trial. “The claim for racial discrimination based on Charter refusing to carry our client's television channels is of national importance,” he said.

Patrick Philbin, a former Kirkland & Ellis partner who has moved to a position in White House counsel office while the case has been pending, argued at the Ninth Circuit for Charter. Kirkland partners Devin Anderson and Jeffrey Powell, who were also on the briefs alongside partners Paul Clement and Mark Holscher, didn't respond to messages seeking comment Monday.

Charter Communications declined to comment.

Read the Opinion: