ADA Lawsuits Run Amok in California
The Americans with Disabilities Act was enacted in 1990 to ensure that persons with disabilities have access to places of “public accommodations”. Examples of places of public accommodations include: places of lodging, entertainment, recreation, restaurants, bars, theaters, stores, and health clubs. The ADA, while well-intended and efficiently designed, has given rise to a cottage industry of “drive-by” lawsuits in California.
This is thanks in large part to California law. Plaintiffs and their attorneys have been taking aim on technical-but-harmless violations of the ADA by suing under both the ADA and a state antidiscrimination law called the California Unruh Act, the latter of which provides a windfall for plaintiffs.
Under the ADA, a plaintiff can sue for an injunction to require a business to bring a public accommodation into compliance, but it cannot recover money from the defendant other than repayment of reasonable attorneys’ fees and costs. The California Unruh Act lets plaintiffs capitalize by recovering damages for the same violations. The damages under the Unruh Act are extra-compensatory: the statutory minimum is $4,000.00, and the statue allows plaintiffs to recover treble damages (an award three times the amount) plus attorneys’ fees and costs. The result: ADA lawsuits have become a profitable business tactic in California for the wrong reasons.
For the past several years, federal courts have been flushed with ADA lawsuits against California businesses over various alleged violations, including but not limited to: imperfect handicapped parking space painting, imperfect language or font size on handicapped parking signs, and counters or toilet grab bars that do not comply with the precise height and placement standards that are found in the statutes and regulations.
In California, plaintiffs and their lawyers sue over technical violations and evidence the lawsuits on allegations (however disingenuous or lacking in credibility they may seem) that the violations were harmful to the plaintiffs bringing the lawsuits. For example, in a typical California ADA / Unruh Act case, a plaintiff will allege that they wanted to enjoy the defendant’s public accommodation, but the technical violation prevented him or her from doing so. Evidence is often scant as to whether the plaintiff ever even patronized the business, much less if they had to leave the business unsatisfied due to such violations (which again, can be as trivial as having the wrong paint color or the wrong language on the sign used to mark a handicapped parking space).
In California, where the Unruh Act’s money damages provisions are combined with the ADA’s exacting requirements, Plaintiffs in these sorts of lawsuits can demand thousands of dollars over the slightest of technicalities based on the allegations set forth above. In many cases, where the cost of fixing the violation might well be much less than the damages alleged, and the premise that the plaintiff was truly impacted is questionable at best, businesses in California are left feeling extorted.
The cost of litigation adds to the problem. While average settlements can be as much as $14,000.00, according to various sources, the cost of litigating the ADA matters can easily cost businesses hundreds of thousands of dollars in legal fees. Thus, businesses unable bear the cost of defending against an ADA lawsuit settle out of court for far more than what it would cost to repair the violation.
According to the Orange County Register, the number of ADA lawsuits filed in federal court in 2018 hit a record high of 10,163 — up 34 percent from the 7,663 cases filed in 2017. California again led the nation in federal ADA cases in 2018 with 4,249 filings compared to the 2,751 from the prior year. This does not even include state court litigation.
It is safe to assume that this sharp rise in litigation is based on the practice of combining the ADA’s public accommodation standards with damages under the Unruh Act. California plaintiffs’ lawyers have sharpened their entrepreneurial acumen and leveraged Unruh in combination with ADA lawsuits to scare businesses into settling quickly and for more money than businesses facing ADA litigation in other states.
Repeat plaintiffs in ADA / Unruh actions are common. In one lawsuit filed against a client we represent, Plaintiff had filed approximately 96 prior ADA lawsuits in the United States District Court for the Central District of California, including approximately 60 in 2019 alone.
Websites as public accommodations: a new frontier?
ADA mills have also become more creative in recent years, targeting new forms of businesses including online retailers. According to the Los Angeles Times, over 1,000 ADA lawsuits had been filed in federal court for alleged website violations in the first six months of 2018. At the time of the article, the number of such lawsuits was on pace to increase 90% over the previous year. While websites were not likely foreseen as an area of regulation when the ADA was created, some courts have been receptive to expanding the definition of places of accommodations in ADA / Unruh Act lawsuits to include websites. This is problematic when no official standards for web compliance exist and technology continues to evolve evermore rapidly.
Legislative improvements to ADA/Unruh abuses:
While there have been efforts to curb ADA abuse, these efforts can only be best described as watered-down legislations. Governor Jerry Brown signed in to law Senate Bill 269 in 2016, creating a new category of businesses exempt from full minimum statutory damages.
To be exempt:
The business must employee 50 or fewer employees on average over the past 3 years;
The business was inspected by a CASp inspector before the commencement of the lawsuit or receipt of a demand letter;
The businesses corrected all construction-related violations noted by the CASp inspection within 120 days.
For businesses with fewer than 25 employees and $3.5 million in gross receipts annually over the past 3 years, SB 269 also allows for lower minimum statutory damages of $2,000.00 if minor construction-related violations are corrected within 15 days. Unfortunately, that 15-day timeframe is extremely short for many businesses to cure the issue.
Sanctions upon findings of unethical conduct:
With state and federal legislators failing to tackle ADA abuse, some judges have taken matters into their own hands have sanctioned unethical conduct in ADA cases when it has clearly occurred. For example, last year, a federal judge in the Southern District of Florida sanctioned an attorney based on a pattern of frivolous ADA litigation and based on the discovery of inflated billable hours and other misrepresentations over material facts made to the court in ADA litigation. The attorney in that case had filed hundreds of ADA suits and dozens of them were with the same plaintiff. The court found the existence of an illicit joint enterprise between the attorney and the same ADA plaintiff, who was essentially a hired gun (the attorney had paid the plaintiff more than $84,500.00 over a 3-year period to participate in various ADA lawsuits).
The 21-page Sanctions Order in that case imposed the following sanctions:
the disgorgement of all fees and costs obtained by the lawyer and the plaintiff in all related “gas pump” cases they had filed, totaling $59,900.00;
400 hours of community service for the plaintiff (as the plaintiff could not afford to pay the $59,900.00 penalty imposed by the Court);
a prohibition on future ADA litigation by the plaintiff and the lawyer;
reporting of the lawyer to the state disciplinary body; and
requiring the disclosure of the Sanctions Order in every court in which the attorney had filed a lawsuit in the past two years.
Every ADA case is different. In California, virtually all ADA / Unruh cases present efficiency problems for defendant businesses. However, businesses can mitigate risks of such litigation and it is best to speak to an attorney about ADA compliance proactively to the extent possible. For businesses who have been sued, each ADA case is different and an attorney can help your business respond to a lawsuit in the most effective way in light of the circumstances
The attorneys at Thakur Law Firm, APC are knowledgeable in the latest ADA law compliance issues, and they can assist your business in ensuring you do not run afoul of the ever-changing contours of ADA compliance law.