This past week Governor Jerry Brown signed Senate Bill 269. The new law is the latest attempt to curb lawsuits brought under the Americans with Disabilities Act of 1990 (“ADA”) and related states laws which many businesses and governmental entities have called unfair and predatory. Others, have used more colorful descriptions.
The ADA Debate
At the heart of the debate is a small but growing number of ADA plaintiffs who regularly sue businesses and governmental entities alleging that their properties do not provide equal access to disabled individuals. These ADA plaintiffs and their attorneys, including other members of the disabled community, argue that these lawsuits improve access to places of public accommodation by disabled individuals, are permitted under the law, and that the businesses and government agencies they sue can’t be heard to complain since the ADA has been on the books for over twenty-five years.
Defendants, on the other hand, argue that serial ADA plaintiffs and their attorneys have hijacked the ADA and are using it in ways that the law was never intended. Specifically, they argue, these ADA plaintiffs and their attorneys are filing suit primarily for monetary gain, not to improve access for the disabled, and point to the following:
The ADA, which only provides a right to injunctive relief (although it also provides for the recovery of attorneys fees), when combined with the minimum statutory damages available under California’s Unruh Act and Disabled Persons Act, have created an economic incentive for serial ADA plaintiffs to sue businesses and governmental entities.
Many of those being sued are either small businesses who are unaware their property is required to comply with the federal ADA Accessibility Guidelines (ADAAG), businesses (including larger businesses with multiple locations) or governmental entities which lack the financial resources to make the changes necessary to comply with ADAAG, or involve claims that are either difficult to verify and dispute (e.g., path of travel blocked by mop on day of visit) or difficult to mitigate in advance (e.g., grade of parking exceeds acceptable slope requirements due to settling over time).
Aggravating to most defendants are stories and suspicions that some serial ADA plaintiffs have never even stepped foot onto the property (so called “drive-by” litigation), that others have not experienced any “actual” barriers to access let alone the discomfort, embarrassment, or humiliation they often allege in their complaints, and that many serial plaintiffs appear to be frequenting businesses for the sole purpose of filing suit.
And, finally, that serial ADA plaintiffs and their attorneys know that the economic calculation made by defendants when determining whether to fight or settle almost always favors settlement, because the cost of settling even a suspect complaint in the mid single digits to low to mid double digits, is often less costly and less risky when compared to the attorney’s fees and costs the defendant would incur in defending the case and possible judgment and award of attorney’s fees fees in favor of the plaintiff if the case went to trial. And if you leverage this business model by filing dozens or even hundreds of cases annually, you’re starting to talk serious money.
What SB 269 Changes
To understand the changes made by SB 269 it’s important to understand some the earlier legislative efforts to curb ADA disability access litigation in California.
Minimum Statutory Damages
Minimum statutory damages under the Unruh Civil Rights Act are $4,000 and under the Disabled Persons Act are $1,000. Several years ago, legislation was enacted to make clear that a plaintiff may not recover statutory damages under both the the Unruh Civil Rights Act as well as under the Disabled Persons Act. Effectively then, unless an ADA plaintiff can show actual damages in excess of $4,000, most rely on the minimum statutory damages under the Unruh Civil Rights Act.
Later, legislation was enacted to assist small businesses by reducing statutory minimum damages to $2,000 if the business could show that: (1) it corrected all construction-related violations that were the basis of the claim within 30 days of being served with the complaint; and (2) the business employed 25 or fewer employees on average over the past three years (or since its existence, if shorter than three years) and had annual gross receipts of less than $3.5 million for the past three years (or, again, since its existence, if shorter than three years).
SB 269 adds that an ADA plaintiff is not presumed to have experienced difficulty, discomfort or embarrassment for purposes of being awarded minimum statutory damages if the defendant is: (a) a small business (see above); (b) the small business has corrected all “technical violations” asserted in a complaint or written notice within 15 days of service or receipt of the complaint or written notice (note: the “written notice” is new and could be a trap for the unwary); and (c) the technical violation is based on one of the following:
Interior signs, other than directional signs or signs that identify the location of accessible elements, facilities, or features, when not all such elements, facilities, or features are accessible.
The lack of exterior signs, other than parking signs and directional signs, including signs that indicate the location of accessible pathways or entrance and exit doors when not all pathways, entrance and exit doors are accessible.
The order in which parking signs are placed or the exact location or wording of parking signs, provided that the parking signs are clearly visible and indicate the location of accessible parking and van-accessible parking.
The color of parking signs, provided that the color of the background contrasts with the color of the information on the sign.
The color of parking lot striping, provided that it exists and provides sufficient contrast with the surface upon which it is applied to be reasonably visible.
Faded, chipped, damaged, or deteriorated paint in otherwise fully compliant parking spaces and passenger access aisles in parking lots, provided that it indicates the required dimensions of a parking space or access aisle in a manner that is reasonably visible.
The presence or condition of detectable warning surfaces on ramps, except where a ramp is part of a pedestrian path of travel that intersects with a vehicular lane or other hazardous area.
CASp Inspected Properties
Legislation enacted several years ago established the Certified Access Specialist program (“CASp”). Under the CASp program a property could be inspected by a CASp-certified specialist to determine its compliance with ADA accessibility laws. Provided that a property was CASp certified, statutory minimum damages were reduced to $1,000 provided that the defendant corrected all construction-related violations that were the basis of the claim within 60 days of being served with the complaint.
SB 269 adds that certain smaller businesses (but not small businesses as defined above) are not subject to statutory minimum damages if:
The business has employed 50 or fewer employees on average over the past three years (or since its existence, if shorter than three years).
The property was CASp inspected prior to the filing of the complaint or written notice (note: again, a trap for the unwary).
The business has corrected all construction-related violations identified in the CASp report that are the basis of the claim within 120 days of service or receipt of the complaint or written notice.
A business may only claim the protection from liability for minimum statutory damages once for each structure or area inspected by a CASp.
When Does SB 269 Take Effect?
SB 269 applies to claims filed or or after the date SB 269 was signed into law or May 11, 2016.
I recognize this is compromise legislation but I question the extent to which it will actually help curb ADA accessibility abuses in California. As to the first part of SB 269, I think it may be too easy to plead around by a cunning plaintiff. Plus, the shifting of the presumption appears to go out the door if a plaintiff alleges even a single non-technical violation. As to the second part of SB 269, since it only applies to construction-related violations that are both alleged by an ADA plaintiff and identified in a previously prepared CASp report, much will depend on the clarity of the allegations and those of the CASp report, and I can see arguments arising as to whether they involve the same violations, and hence whether the requirements to meet the safe harbor has been met. Additionally, SB 269’s get-out-of-jail-free card may be of limited benefit since it can only be used once by a defendant, but at the same time, I wonder how this one-time use will be tracked without having search through court dockets.