2006 Laugh Factory incident

During a performance on November 17, 2006, at the Laugh Factory in Hollywood, California, Richards launched into a racist rant in response to repeated heckling and interruptions from a small group of Black and Hispanic audience members. Richards was recorded shouting "He's a nigger!" several times and making references to lynching and the Jim Crow era.[6][17][18][19][20] Kyle Doss, a member of the group that Richards addressed, said the group had arrived in the middle of the performance and were "being a little loud". According to Doss:

[Richards] said, "Look at the stupid Mexicans and blacks being loud up there." That's the first thing he said. And then he kept on with his bit. And, then, after a while, I told him, "My friend doesn't think you're funny." And then when I told him that, that's when he flipped me off and said, "F-you N-word." And that's how it all started.

— Kyle Doss, Interview on The Situation Room[21]

Jerry Seinfeld issued a statement following the incident saying he felt "sick" over Richards' remarks and "felt terrible for all the people that have been hurt".[22] On November 20, Seinfeld invited Richards via satellite during a broadcast of the Late Show with David Letterman, where Richards was recorded saying: "For me to be at a comedy club and to flip out and say this crap, I'm deeply, deeply sorry. I'm not a racist, that's what's so insane about this."[23] Many studio audience members laughed as Richards began his unscripted explanation and apology, thinking it was a bit, leading Seinfeld to reprimand them, saying: "Stop laughing. It's not funny." Richards said he had been trying to defuse the heckling by being even more outrageous, but it had backfired. He later called civil rights leaders Al Sharpton and Jesse Jackson to apologize.[21][24] He also appeared as a guest on Jackson's syndicated radio show.[25] Doss stated that he did not accept Richards's apology, saying: "If he wanted to apologize, he could have contacted ... one of us out of the group. But, he didn't. He apologized on camera just because the tape got out."[24][26]

The incident was parodied on several TV shows, including Mad TV, Family Guy, South Park, Extras, and Monday Night Raw. In an episode of Curb Your Enthusiasm, Richards appeared as himself and poked fun at the incident. In 2008, rapper Wale referenced the incident and used recordings of the incident, as well as Richard's apology, in the song "The Kramer" on The Mixtape About Nothing album. In a 2012 episode of Seinfeld's web series Comedians in Cars Getting Coffee, Richards explained that the outburst still haunted him, and was a major reason for his retirement from stand-up.[27]

Comedian Paul Mooney also cited the incident as a key factor leading to his decision to remove the racial slur from his own live performances.[28]