Re: "people of color"
Seriously? It's used because it's the most appropriate term.
They can't just be 'people' because they're a defined group of people singled out for discriminatory treatment. There needs to be some way of highlighting why these people have been discriminated against.
POC usually covers everyone that isn't visibly white (pink) skinned, so an alternative term would be 'people that are not white'. That's a bit of a mouthful, anything non white is arguably 'colour', so POC is entirely appropriate.
In the same way you can't use 'humans' because women were also discriminated against.
Now, in this case you have a bit of a point because it doesn't cover everyone non white, the lawsuit explicitly defines their usage of POC as 'latino, african american, or american indian'. Whilst strictly speaking using POC in an article or press release about this case is inaccurate, it's less of a mouthful than LAAAI, and more widely understood.