California business owners gained new protection against expensive, predatory lawsuits involving disability access laws last week as Gov. Jerry Brown signed into law Senate Bill 1186. It became effective September 19, 2012. The law is intended to cut down on shakedown demands and litigation, while at the same time increase disability access.

Demand Letters

Property and business owners should familiarize themselves with the new requirements regarding demand letters involving disability access law violations. The new law: 

• prohibits an attorney from sending property owners or tenants demand letters that request the payment of money or offer an agreement to accept money in lieu of filing a lawsuit; 
• requires that any demand letter or complaint identify the alleged violation in sufficient detail to allow a reasonable person to identify the basis for the alleged violation; 
• requires an attorney to provide a form written advisory with each demand letter or complaint (current law required the form only in connection with filing a complaint, not with a demand letter); and 
• requires attorneys to submit demand letters and complaints to the California Commission on Disability Access (CCDA) and to the California State Bar.

Reduction in Damages

The new law also provides some monetary relief for business that have unintentional violations that they are willing to correct. The law reduces from $4,000 to $2,000 the minimum statutory damages for each unintentional violation if the defendant is a small business (defined as having 25 or fewer employees and no more than $3.5 million in gross annual receipts) and has corrected the alleged violations within 30 days of being served with the complaint.

Additionally, the law reduces from $4,000 to $1,000 the minimum statutory damages for each unintentional violation if (1) the defendant corrects all violations within 60 days of being served with the complaint, and (2) and other circumstances apply including, among others i) the property was previously inspected by a Certified Access Specialist (CASp) prior to the date of the Plaintiff’s alleged encounter with the barrier to access, or ii) the alleged violation pertains to new construction at the site that was approved pursuant to a local building permit and inspection process between January 1, 2008, and January 1, 2016.

Request for Litigation Stay

Additional categories of defendants will now be able to request a stay of litigation and an early evaluation conference if: 

• their new construction was approved pursuant to a local building permit and inspection process between January 1, 2008, and January 1, 2016, 
• their new construction was approved by a local public building inspector who is a CASp, or 
• they are a small business as defined above.

Multiple Claims for Same Violation

In assessing liability in any action alleging multiple claims for the same violation on different occasions, courts are now required to consider the reasonableness of the plaintiff’s conduct in light of plaintiff’s obligation, if any, to mitigate damages. This is intended to deter plaintiffs from repeatedly attempting to access the same property and encountering the same barriers for the sole purpose of enhancing their claim for statutory damages and fees.

Lease Requirements

The new law also requires commercial property owners to state on all lease forms or rental agreements executed on or after July 1, 2013, whether the property being leased had undergone an inspection by a CASp.

Conclusions

Overall, the new law provides significant benefits to small business owners by promoting early identification and correction of violations and reducing the amount of statutory damages available to serial plaintiffs, and creating a mechanism for oversight of predatory practices by ADA practioners. The law also provides incentives for property owners to promptly remedy violations upon demand and to obtain a CASp inspection.

David C. Bolstad
Partner
Litigation | Real Estate
Los Angeles
(213) 955-5647
(213) 620-8816 (fax)
E-mail me

Michael J. Holmes
Partner
Litigation
San Diego
(619) 235-1552
(619) 233-1158 (fax)
E-mail me