California Appellate Court Rules That Purely Digital Retail Businesses Are Not Covered Under the Unruh Civil Rights Act

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

On August 1, 2022, the Court of Appeal of the State of California, in Martinez v. Cot’n Wash, Inc., resolved two outstanding issues in the website accessibility field in a way that limits the reach of the Unruh Civil Rights Act (Unruh Act) as part of a growing resistance in the judiciary to an onslaught of website accessibility claims.

First, the court held that when a court considers whether a party has violated section 51(f) of the Unruh Act, which provides that a violation of the Americans with Disabilities Act (ADA) constitutes a violation of the Unruh Act, websites of a purely digital business with no physical “place” open to the public are not covered.

Second, the court held that the plaintiff had failed to allege the “intentional discrimination” required for claims under section 51(b) of the Unruh Act solely by virtue of the failure to address barriers on the website alleged in a pre-litigation demand letter.

The decision upholds the lower court’s dismissal of the claims in the first amended complaint, which alleged that Cot’n Wash violated the Unruh Act because its website was inaccessible to blind or visually impaired persons and that Cot’n Wash failed to take adequate action to make the website accessible after being notified by the plaintiff’s demand letter of the alleged barriers on the website.

In a unanimous decision of a three-judge panel, the court sided with the majority of federal appellate courts that have reviewed the issue, holding that Cot’n Wash—a purely digital retail business that does not offer goods or services at any physical location—and its website did not constitute a place of public accommodation under the ADA and thus could not support a section 51(f) Unruh Act claim based on incorporating a violation of the ADA as a violation of the Unruh Act. In so doing, the court rejected a minority view held by some federal district courts that a purely digital retail business is covered by the ADA in the same way that a bricks-and-mortar retailer would be.

The three-judge panel also unanimously held that a plaintiff alleging a claim under section 51(b) of the Unruh Act must establish that the defendant intentionally discriminated against the plaintiff because of his or her disability. The court rejected the plaintiff’s argument that Cot’n Wash had intentionally discriminated against him when it failed to take corrective action after receiving correspondence from his counsel documenting the alleged barriers on the website. The court further acknowledged that while “disparate impact” caused by an inaccessible website may be “probative” of intentional discrimination, such disparate impact, even when combined with a failure to take corrective action when notified, does not alone establish the requisite intent.

Key Takeaways

The court’s first holding should put an end to Section 51(f) Unruh Act claims that are leveled against purely online businesses. But this ruling will not prove helpful to the many businesses whose websites have some “nexus” or connection to physical locations open to the general public.

There are many “hybrid” businesses—with both physical, customer-facing locations and other nonpublic activities—for which this ruling may prove helpful. For example, the requirement of a nexus or connection to a physical location may protect businesses (or portions of businesses) whose websites have no connection to physical locations—such as publicly traded companies that have been inundated with claims of late that their websites’ investor pages are inaccessible to the blind. Because those websites, or the portions of the websites devoted to investor relations, have no connection to physical locations open to the public, this ruling may prove helpful in defeating those claims.

The court’s ruling on the “intentional discrimination” requirement for claims under section 51(b) of the Unruh Act may likewise be helpful, as it clarifies that a business’s inaction in response to a claim of alleged barriers to access, even when combined with disparate impact on a protected group, is not enough to establish intent. The court was careful to note, however, that such a failure to take action could nevertheless be “probative” of intentional discrimination, assuming a party could overcome this high pleading standard.

So, while this decision continues the trend of courts pushing back on website accessibility claims, businesses may want to consider whether making websites more accessible should be part of their business planning. As more web developers grow knowledgeable about how to make websites accessible to visually impaired individuals who use screen-reading software and to hearing-impaired users attempting to access audio files, it may make sense for businesses launching or relaunching websites to give consideration to making their websites accessible to persons with disabilities.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

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