Judge Grants in Part, Denies in Part Dismissal of Racial-Animus Suit vs. AT&T

A U.S. District judge for Northern Texas granted in part and denied in part AT&T’s motion to dismiss the Civil Rights Act Section 1981 complaint in which Legacy Equity Advisors alleged AT&T deprived it of bidding on Cricket Wireless, DirecTV, AT&T’s Puerto Rican wireless division and other divested assets because it’s Black-owned (see 2305040065). Judge Sidney Fitzwater in Dallas granted Legacy leave to file a first amended complaint, said his signed memorandum opinion and order Friday (docket 3:23-cv-00979).

Because the statute of limitations is two years, the Cricket Wireless basis for Legacy’s Section 1981 claim “must be dismissed as time-barred,” as is Legacy’s Puerto Rico division claim, said Fitzwater. “As for the other exclusion-from-bidding claims, Legacy alleges insufficient facts about the timing of the events in question for the court to determine that the claims are untimely,” said the judge.

Legacy also alleges AT&T entered into contract negotiations on one occasion with Legacy for the sale of 88 AT&T retail stores, but AT&T imposed unfavorable terms “due to racial animus,” said the order. As pleaded, this basis for Legacy’s Section 1981 claim “is not time-barred,” the order said.

Legacy alleges it first realized it was injured as to the 88 retail stores in March 2022, when it learned AT&T sold the stores to Blue Link Wireless, a white-owned firm operated by former AT&T CEO Randall Stephenson, said the order. AT&T’s SEC filings don’t “clearly address this sale,” so the court can’t take “judicial notice of any earlier date on which Legacy would have had notice of its claim,” it said. Legacy “plausibly pleads” it neither knew nor should have known it had a Section 1981 claim at the time of a senior AT&T executive’s “racially discriminatory comments,” it said.

The judge said even if Legacy’s exclusion-from-bidding claims aren't time-barred, “they must be dismissed, because Legacy has failed to plausibly plead a prima facie case of race discrimination” under Section 1981, said the order. “Legacy alleges insufficient facts for the court to draw the reasonable inference that AT&T intended to discriminate based on race when it excluded Legacy from any bidding process for these assets,” it said.

The complaint’s allegation that AT&T sold these assets to white-owned firms on more favorable terms doesn’t remedy its “pleading defect,” said the order. Absent an allegation that terms of sale for these assets were ever discussed, with Legacy, “there are no terms to compare with deals involving AT&T and white-owned firms,” it said. The complaint also doesn’t allege AT&T executives “made racially discriminatory remarks in the context of the potential contracting process for these assets, nor does it plead any other facts that would enable the court to draw circumstantially the reasonable inference of discrimination,” it said.

As to Legacy’s allegation that Blue Link acquired 88 AT&T retail stores originally allocated to Legacy, the court declined to dismiss the claim because Legacy alleges facts “that allow the court to draw a reasonable inference of intentional race discrimination,” said the order. The “court sets to one side as insufficient” Legacy’s allegations of “differential treatment” between Legacy and Blue Link, it said.