Judge Mel Red Recana, Case Number: 22STCV10045, Date: 2024-02-22 Tentative Ruling

All rulings shown here are TENTATIVE ONLY, and thus oral argument WILL be heard. All Counsel are still required to attend.

Superior Court of California

County of Los Angeles

Moving Party: Plaintiffs Weather Group, LLC and Entertainment Studios Networks, Inc.

The Court considered the moving papers, opposition papers, and reply papers. After review, Plaintiffs’ Motion for Sanctions pursuant to CCP § 128.7(h) is DENIED.

Weather Group, LLC and Entertainment Studios Networks, Inc. (collectively, Plaintiffs) filed a Complaint on May 4, 2023 against McDonald’s USA, LLC, (Defendant) alleging a single cause of action for Fraud — False Promise (Civ. Code § 1711).

The Complaint alleges the following: Prominent American corporations promised to take an active role in remedying racial injustice after George Floyd’s murder ignited nationwide protests. (Complaint, ¶ 1.) Defendant only pledged $1 million despite being one of the largest public corporations in America. (Id. at ¶ 2.) Plaintiffs are part of a conglomerate of related media companies (“Allen Media Group” or “AMG), all owned by Byron Allen, an African American entrepreneur. (Id. at ¶ 4.) AMG is by far the largest African American-owned media company in the country, with Plaintiffs representing over 90 percent of that category. (Id. at ¶ 8.) Allen created the Black Owned Media Matters movement after the George Floyd murder to address racial discrimination and systemic racism in the media. (Id. at ¶ 5.)

AMG informed Defendant in March 2021 that AMG had been victims of racial discrimination in contracting in violation of 42 U.S.C. § 1981. (Id. at ¶ 6.) Plaintiffs allege that Defendant announced its “Four-Year Plan” in May 2021 to deflect from these serious allegations. (Id. at ¶ 7.) Plaintiffs further allege that Defendant’s plan included a commitment to increase its spending with Black Owned Media from two to five percent by 2024. (Id.)

Plaintiffs allege that in reliance on Defendant’s commitment, Plaintiffs spent considerable time and effort to put together a proposal for Defendant to advertise across their portfolio. (Id. at ¶ 9.) Defendant rebuffed Plaintiffs and proposed to spend only a tiny fraction of its advertising budget on Plaintiffs’ properties. (Id. at ¶ 10.) Defendant’s allocation left it well short of its public commitment. (Id.) In 2021 and afterwards, Defendant was not spending anywhere close to two percent of its national advertising budget on Black Owned Media under any definition. (Id. at 12.) Plaintiffs then filed suit.

Now there are three motions before the Court, only one of which will be addressed here. Plaintiffs filed a Motion for Sanctions under CCP 128.7(h) (Motion) on January 25, 2024. Defendant opposed, and Plaintiffs filed a reply.

“A motion for sanctions brought by a party or a party's attorney primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation, shall itself be subject to a motion for sanctions. It is the intent of the Legislature that courts shall vigorously use its sanctions authority to deter that improper conduct or comparable conduct by others similarly situated.” (CCP § 128.7(h).)

Plaintiffs file this Motion arguing that Defendant abused the sanctions rules, specifically CCP § 128.7(h). The Court disagrees and denies Plaintiffs’ Motion.

Plaintiffs have failed to show that Defendant’s Motion for Sanctions was filed in bad faith. Plaintiffs argue that no reasonable attorney would have brought sanctions motions on this record where there had been no discovery, no opportunity for Plaintiffs to prove their claims, and no opportunity for Plaintiffs to cross-examine witnesses. However, as noted in the Court’s Minute Order Dated February 2, 2024, Plaintiffs failed to make a prima facie showing of Defendant’s nonperformance, failed to identify a particular act that sought inducement, and failed to show reasonable reliance for their claim of fraud. (See Minute Order, pgs.16, 19, and 20.) The Complaint did not survive Defendant’s Special Motion to Strike. Here, a reasonable attorney could find grounds to file a Motion for Sanctions, regardless of the outcome. Moreover, Plaintiffs cite no frivolous conduct by Defendant. Without a showing of improper purpose, Plaintiffs’ Motion must be denied.

Accordingly, Plaintiffs’ Motion for Sanctions pursuant to CCP § 128.7(h) is DENIED.

Superior Court of
California

County
of Los Angeles

Moving Party:
Plaintiffs Weather Group, LLC and Entertainment Studios Networks, Inc.

The
Court considered the moving papers, opposition papers, and reply papers. After
review, Plaintiffs’ Motion for
Sanctions pursuant to CCP § 128.7(h) is DENIED.

Weather Group, LLC and Entertainment
Studios Networks, Inc. (collectively, Plaintiffs) filed a Complaint on May 4,
2023 against McDonald’s USA, LLC, (Defendant) alleging a single cause of action
for Fraud — False Promise (Civ. Code § 1711).

The Complaint alleges the following:
Prominent American corporations promised to take an active role in remedying
racial injustice after George Floyd’s murder ignited nationwide protests. (Complaint,
¶ 1.) Defendant only pledged $1 million despite being one of the largest public
corporations in America. (Id. at ¶ 2.) Plaintiffs are part of a
conglomerate of related media companies (“Allen Media Group” or “AMG), all
owned by Byron Allen, an African American entrepreneur. (Id. at ¶ 4.) AMG
is by far the largest African American-owned media company in the country, with
Plaintiffs representing over 90 percent of that category. (Id. at ¶ 8.) Allen
created the Black Owned Media Matters movement after the George Floyd murder to
address racial discrimination and systemic racism in the media. (Id. at ¶
5.)

AMG informed Defendant in March 2021
that AMG had been victims of racial discrimination in contracting in violation
of 42 U.S.C. § 1981. (Id. at ¶ 6.) Plaintiffs allege that Defendant
announced its “Four-Year Plan” in May 2021 to deflect from these serious
allegations. (Id. at ¶ 7.) Plaintiffs further allege that Defendant’s
plan included a commitment to increase its spending with Black Owned Media from
two to five percent by 2024. (Id.)

Plaintiffs allege that in reliance
on Defendant’s commitment, Plaintiffs spent considerable time and effort to put
together a proposal for Defendant to advertise across their portfolio. (Id.
at ¶ 9.) Defendant rebuffed Plaintiffs and proposed to spend only a tiny
fraction of its advertising budget on Plaintiffs’ properties. (Id. at ¶
10.) Defendant’s allocation left it well short of its public commitment. (Id.)
In 2021 and afterwards, Defendant was
not spending anywhere close to two percent of its national advertising budget
on Black Owned Media under any definition. (Id. at 12.) Plaintiffs then
filed suit.

Now there are three motions before
the Court, only one of which will be addressed here. Plaintiffs filed a Motion
for Sanctions under CCP 128.7(h) (Motion) on January 25, 2024. Defendant
opposed, and Plaintiffs filed a reply.

“A motion for sanctions brought by a
party or a party's attorney primarily for an improper purpose, such as to
harass or to cause unnecessary delay or needless increase in the cost of
litigation, shall itself be subject to a motion for sanctions. It is the intent
of the Legislature that courts shall vigorously use its sanctions authority to
deter that improper conduct or comparable conduct by others similarly situated.”
(CCP § 128.7(h).)

Plaintiffs file this Motion arguing
that Defendant abused the sanctions rules, specifically CCP § 128.7(h). The
Court disagrees and denies Plaintiffs’ Motion.

Plaintiffs have failed to show that
Defendant’s Motion for Sanctions was filed in bad faith. Plaintiffs argue that no
reasonable attorney would have brought sanctions motions on this record where
there had been no discovery, no opportunity for Plaintiffs to prove their
claims, and no opportunity for Plaintiffs to cross-examine witnesses. However,
as noted in the Court’s Minute Order
Dated February 2, 2024, Plaintiffs failed to make a prima facie showing of
Defendant’s nonperformance, failed to identify a particular act that sought
inducement, and failed to show reasonable reliance for their claim of fraud. (See
Minute Order, pgs.16, 19, and 20.) The Complaint did not survive Defendant’s Special
Motion to Strike. Here, a reasonable attorney could find grounds to file a
Motion for Sanctions, regardless of the outcome. Moreover, Plaintiffs cite no frivolous
conduct by Defendant. Without a showing of improper purpose, Plaintiffs’ Motion
must be denied.

Accordingly, Plaintiffs’ Motion for Sanctions pursuant to CCP §
128.7(h) is DENIED.

Superior Court of California

County of Los Angeles

Case No.: 23STCV10045

Superior Court of
California

County
of Los Angeles

Case No.:
23STCV10045