Tender not accepted – court rejects copy-cat ADA gift card suits

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Eversheds Sutherland (US) LLPTender not accepted – court rejects copy-cat ADA gift card suits

Since late last year, hundreds of class actions have been filed against retailers and restaurant groups alleging violations of Title III of the Americans with Disabilities Act for their failure to offer Braille gift cards that are accessible to the blind and visually impaired. To date, over 240 cut-and-paste class actions have been filed affecting a host of businesses from restaurants to car manufacturers. In a series of recent rulings granting motions to dismiss filed by several retailers1 the first to address the merits of these suits, Judge Gregory H. Woods in the US District Court for the Southern District of New York, held that the ADA does not require businesses to offer gift cards in Braille. These decisions, though not binding authority, provide guidance to other courts grappling with these suits and will hopefully serve to stem the flood of copycat litigation plaguing businesses that offer gift cards to consumers.

ADA background

Title III of the ADA, enacted in 1990, prohibits discrimination against disabled individuals, which includes the blind and vision impaired, in places of public accommodation:

No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.

42 USC § 12182(a). Although Title III of the ADA does not provide civil penalties for violations of the Act, it does permit private rights of action and allows individuals to bring enforcement actions, seek injunctive relief, and recover costs and attorney’s fees. 42 USC § 12188.

The ADA does not provide specific metrics or standards for accessibility, but the Department of Justice (DOJ), the agency responsible for enforcement of the ADA, has issued regulations requiring that a public accommodation “furnish appropriate auxiliary aids and services where necessary to ensure effective communication with individuals with disabilities.”“[A]uxiliary aids and services” include “[b]railled materials and displays” or “other effective methods of making visually delivered materials available to individuals who are blind or have low vision.”3 The DOJ has clarified that these provisions require “effective communication.” 28 CFR § 36.303(c)(1).

Gift card class actions

Beginning in October 2019, a small group of plaintiff’s attorneys started flooding federal courts, principally in the Southern and Eastern Districts of New York, with carbon copy (or in today’s technological environment “cut and paste”) complaints naming as putative class action defendants, among others, McDonald’s, Banana Republic, Nordstrom, Hooters and other retailers alleging that the companies’ respective gift cards are inaccessible to the blind because they do not contain writing in Braille.

The suits alleged that the businesses violated the ADA and related state statutes for their “failure to sell store gift cards to consumers that contain writing in Braille” or otherwise in a format that would allow the cards to “be fully accessible to and independently usable by Plaintiff and other blind or visually-impaired people.”4 Although the ADA does not specifically address gift cards, or similar specific programs offered by places of public accommodation, the suits allege that the failure to make the cards independently accessible deprives blind and visually impaired customers of equal access to the goods and services of the establishments.

Recent rulings

In several recent rulings, the first of which was issued on April 23, 2020, Judge Woods granted Defendants’ motions to dismiss ADA gift card class actions against Banana Republic, Kohl’s and a number of other retailers.5 In each case, Judge Woods found, in language that was highly critical of plaintiffs’ claims (and the manner in which the cases were filed, calling them “copy and paste” jobs), that plaintiffs failed to adequately establish Article III standing, and that as a matter of law the ADA did not require businesses to provide gift cards with Braille, dooming plaintiffs’ claims.6

Standing

A plaintiff can establish standing in an ADA suit seeking injunctive relief “where (1) the plaintiff alleged past injury under the ADA; (2) it was reasonable to infer that the discriminatory treatment would continue; and (3) it was reasonable to infer, based on the past frequency of plaintiff’s visits and the proximity of defendants’ [services] to plaintiff’s home, that plaintiff intended to return to the subject location.” Dominguez, 2020 WL 1950496 (citing Kreisler v. Second Ave. Diner Corp., 731 F.3d 184, 187–88 (2d Cir. 2013)).

While Judge Woods found that plaintiffs sufficiently alleged past injury (unavailability of Braille gift cards) and an inference that discrimination would continue (no intention to offer Braille gift cards in the future), none of the plaintiffs, all of whom were represented by the same group of counsel, alleged any facts to establish an intention to return to the businesses in the future, necessary to confer standing. See Id. In fact, as Judge Woods noted in the Kohl's decision, not only was the address that plaintiff alleged to be that of a Kohl's store not a Kohl's, but that there are no Kohl's stores located in Manhattan. Kohl’s Department Stores, Inc., 2020 WL 1974261. The other plaintiffs’ allegations, which were basically identical other than the name of the respective defendant’s establishments, similarly failed to establish an intent to return to the respective businesses in the future.

Title III

As best articulated in Dominguez, plaintiffs presented three theories supporting the argument that the ADA requires gift cards to include Braille: (1) gift cards are goods that need to be accessible; (2) gifts cards are, like websites, places of public accommodation and therefore must be independently accessible; and (3) Plaintiff was denied access to Banana Republic’s services when Banana Republic denied him a Braille (or otherwise accessible) gift card. Dominguez, 2020 WL 1950496.

The court rejected each of these theories in turn:

  • First, the court found that the ADA “regulates access to places of public accommodation—not the type of merchandise a place of public accommodation sells.” Dominguez, 2020 WL 1950496, at *5-7. As the court noted, while a “bookstore could not prohibit a visually impaired person from entering its store … it need not ensure that the books it sells are available in both Braille and standard print.” Id. Simply put the court found that nothing in the plain text of the ADA or its implementing regulations, requires businesses to stock specialty goods, including gift cards, with Braille.
  • Second, the court rejected the argument that gift cards are themselves places of public accommodation because they cannot be “shoehorned” into any of the 12 categories of “public accommodations” enumerated in the ADA, and more logically because “plastic cards are not places.” Id. Although the court acknowledged that a place of public accommodation need not be a physical location, as websites have been found to constitute places of public accommodation, it must be “a space—figurative or not—that can provide the services of a public accommodation.” Id. The court also drew a distinction between websites and gift cards, noting “[i]t is also implausible that an inaccessible gift card could impede a blind person from enjoying all of the benefits of [the business’s] retail locations” such that gift cards should fall within the ambit of Title III. Id. at *9 n.5.
  • Third, and finally, while a business may be required to offer appropriate auxiliary aides to effectively communicate with disabled customers, there is no requirement that businesses provide the specific aide requested by customers, in this case Braille. Id. The court further noted that a business is not required to offer an auxiliary aid unless one is specifically requested. Plaintiff, however, never alleged that he requested an auxiliary aide and did not know what aides were available. Id.

Because the court found that the ADA does not require gift cards in Braille, plaintiffs’ ADA and corollary state and city claims failed as a matter of law, warranting dismissal of the complaints in each action.7

Conclusion

These recent decisions provide some much-needed good news for retailers and restaurants who have faced an onslaught of ADA gift card suits over the last several months. While Judge Woods’ holdings are not binding on other courts wrestling with these cases, they provide sound reasoning that will hopefully lead to similar outcomes. At a minimum these decisions, may give plaintiffs pause before filing similar suits in the future.

_____

1See Dominguez v. Banana Republic, LLC, --- F. Supp. 3d ---, No. 19-10171, 2020 WL 1950496 (S.D.N.Y. Apr. 23, 2020); Murphy v. Kohl’s Department Stores, Inc., No. 19-09921, 2020 WL 1974261 (S.D.N.Y. Apr. 24, 2020); Dominguez v. CKE Rests. Holdings, Inc., No. 19-10816, 2020 WL 1974148 (S.D.N.Y. Apr. 24, 2020); Calcano v. Swarovski N. Am. Ltd., No. 19-10536, 2020 WL 1974143 (S.D.N.Y. Apr. 24, 2020); Mendez v. AnnTaylor, Inc., No. 19-10625, 2020 WL 1974211 (S.D.N.Y. Apr. 24, 2020); Calcano v. Art of Shaving-FL, LLC, No. 19-10432 (S.D.N.Y. Apr. 27, 2020) (Dkt. No. 24).
228 CFR § 36.303(c)(1)
328 CFR § 36.303(b)(2)
4See e.g., Calcano v. McDonald’s Corporation, Case No. 19-cv-9836 (SDNY Oct. 24, 2019)
5See footnote 1, supra.
6For example, in a particularly pointed and amusing critique of plaintiffs’ copy and paste litigation strategy Judge Woods noted that plaintiff repeatedly referred to Banana Republic as a “food establishment,” but that “[a]lthough it features the fruit in its name, Banana Republic does not serve bananas.” Dominguez, No. 19-10171, 2020 WL 1950496.
7The court did not address the merits of plaintiffs’ claims under the New York State Humans Rights Law and New York City Humans Rights Law, but in denying plaintiffs’ federal claims under the ADA declined to exercise supplemental jurisdiction over the state law claims. The failure of the decisions to address the merits of these claims leaves open the possibility that plaintiffs could press forward with these claims in state court.

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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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