For the last several years, consumers have increasingly turned to online shopping as an alternative to traditional "brick and mortar" stores. Some reports showed that "Cyber Monday" sales figures beat out those for "Black Friday" this year, and many retailers are doubling down on their eCommerce efforts in response. What many retailers might not be aware of is the growing risk of litigation under the Americans with Disabilities Act (ADA) and derivative state laws arising from websites or mobile apps that allegedly discriminate against disabled individuals.
Although there has been more than a decade of litigation on this issue, basic questions have remained muddled, including whether Title III of the ADA (which requires access to places of public accommodations to disabled individuals) applies to websites. Recent developments in case law, new proposed regulations by the Department of Justice (DOJ) slated for March 2015, and a noteworthy recent DOJ settlement with an online grocery service, all indicate that this will be an area to watch in 2015.
Title III and Private Employer Websites
Although there is no consensus among courts, some recent cases have held that Title III applies to websites, while several earlier cases held that it did not.
Even courts that have held that a website is not a "public accommodation" under Title III have recognized that an exception exists where there is a "nexus" between the website and a physical place of public accommodation, such as a brick and mortar store. For example, in National Federation of the Blind v. Target Corporation, the plaintiffs filed a class action lawsuit against Target, alleging that its website was inaccessible to blind individuals. Target argued that the website was not a place of public accommodation, and that plaintiffs had not alleged denial of access to the brick and mortar stores. The court rejected this argument, noting that "it is clear that the purpose of the statute is broader than mere physical access—seeking to bar actions or omissions which impair a disabled person's 'full enjoyment' of services or goods of a covered accommodation." Target.com's retail offerings were held to have a sufficient nexus with its brick and mortar stores such that the plaintiff's claims survived a motion to dismiss. Until recently, courts have generally held that Title III does not apply to web-only services (such as Facebook or YouTube) because they do not have a nexus with any physical location. But in June 2012, the U.S. District Court for the District of Massachusetts held in National Ass'n of the Deaf v. Netflix, that Netflix's "Watch Instantly" website was a public accommodation subject to the ADA even though Netflix has no physical place of public accommodation. The court concluded that "[t]he ADA covers the services 'of' a public accommodation, not services 'at' or 'in' a public accommodation". The court found "Congress did not intend to limit the ADA to the specific examples listed in each category of public accommodations" and that the Netflix website may fit within at least one (if not more) of the categories listed in the ADA.
In another case involving Netflix, in the U.S. District Court for the Northern District of California, Cullen v. Netflix, the court rejected the plaintiff's arguments, holding that it was bound by Ninth Circuit precedent requiring a nexus with an "an actual physical place" in order to trigger applicability of Title III. Additionally, a recent decision from the Central District of California indicates that, even where a defendant has physical locations, a "nexus" is not automatically created. In Jancik v. Redbox Automated Retail, the court said that there was not a nexus between Redbox retail kiosks and the "Redbox Instant" website, holding that the "mere fact that the services are sold together does not mean that they are 'heavily integrated' or that one is a 'gateway' to the other."
DOJ Set to Unveil Long-Awaited Regulations
Unlike Title II of the ADA, which applies to government entities, and provides detailed guidance as to what websites must do to comply with the ADA, there are currently no such regulations under Title III.
To provide clarity in this area, the DOJ plans to issues new regulations applicable to websites of private companies in March 2015. These regulations were originally planned to be released earlier—in fact, the DOJ has postponed the issuance of the regulations several times since July 26, 2010, when the DOJ issued its Advanced Notice of Proposed Rule Making (ANPRM). Although these delays have been met with frustration by some members of the plaintiffs' bar, the DOJ, through its recent enforcement efforts, has made clear its intention to extend regulation of private websites.
The DOJ's ANPRM takes the position that many websites are places of public accommodation under Title III, and states that the proposed regulations are needed to ensure access to these websites by disabled persons by providing clear guidance as to what the ADA requires of websites. From the abstract to the ANPRM:
Increasingly, private entities of all types are providing goods and services to the public through websites that operate as places of public accommodation under title III of the ADA. Many websites of public accommodations, however, render use by individuals with disabilities difficult or impossible due to barriers posed by websites designed without accessible features. […]
The ADA's promise to provide an equal opportunity for individuals with disabilities to participate in and benefit from all aspects of American civic and economic life will be achieved in today's technologically advanced society only if it is clear to businesses, educators, and other public accommodations, that their websites must be accessible. Consequently, the Department is proposing to amend its title III regulation to expressly address the obligations of public accommodations to make the websites they use to provide their goods and services to the public accessible to and usable by individuals with disabilities under the legal framework established by the ADA. The proposed regulation will propose the scope of the obligation to provide accessibility when persons with disabilities attempt to access websites of public accommodations, as well as propose the technical standards necessary to comply with the ADA.
The DOJ-Peapod.com Settlement
On November 17, 2014, the DOJ reached a settlement with Ahold U.S.A. Inc. and Peapod, LLC, the owner and operator of peapod.com, an online grocery retailer. This settlement shows that the DOJ is looking closely at the accessibility of websites and mobile apps and remains aggressive in its enforcement efforts.
Unlike past DOJ consent decrees, which involve websites and mobile apps that have a nexus to a physical place, the Peapod settlement agreement requires that a website and apps with arguably no nexus to a physical place be made accessible to the disabled. The Peapod settlement foreshadows what the DOJ's upcoming regulations may require. Three specific provisions of the settlement are particularly noteworthy:
First, the DOJ requires the companies to comply with WCAG 2.0 Level AA standards. There are three levels of conformance with WCAG guidelines: A (lowest), AA, and AAA (highest). This may signal that the DOJ views the AA guidelines as the appropriate regulatory standard.
Second, the settlement gives the companies until March 31, 2015, to make mobile applications accessible and until September 30, 2015 for the website. It remains to be seen what will happen with DOJ enforcement and case law treatment of mobile apps (which are increasingly becoming the preferred method of accessing online content). Notably, there is virtually no mention of smartphone apps and mobile devices in the proposed rulemaking.
Third, the settlement requires the companies to take certain steps to ensure that third-party content providers comply with the proposed accessibility standards—but it also excuses noncompliance if requiring a third-party to comply with the standards would create an "undue burden."
Other Accessibility Issues to Watch in 2015
In addition to website accessibility, businesses should be aware of other accessibility issues with newer technologies they adopt. As one example, there was a wave of lawsuits earlier this year filed against various retailers – including Bath & Body Works, Build-A-Bear Workshop, Express, Office Depot, and American Eagle Outfitters—alleging that updated point of sale card-reading devices do not comply with the ADA. Specifically, the lawsuits are based on the theory that the devices' flat touch screens force blind customers to reveal their PIN numbers to cashiers (as opposed to textured keys). As new technologies continue to enter businesses and the workplace, companies should consider the implications of any new technology from an ADA compliance standpoint.
As we await more concrete guidance from the DOJ next March, all retailers should carefully evaluate their websites' compliance with the ADA. And—if the DOJ's recent settlement is any indication of its future enforcement priorities and the potential scope of the forthcoming regulations— even online-only businesses should take a close look at website ADA compliance.
 452 F.Supp.2d 946.
 Id. at 954, citing 42 U.S.C. § 12182(a).
 National Federation of the Blind v. Target Corporation, 452 F. Supp. 2d 946 (N.D. Cal. 2006).
 Young v. Facebook, Inc., 790 F. Supp. 2d 1110, 1113 (N.D. Cal. 2011) (granting Facebook's motion to dismiss Title III claim because Facebook "operates only in cyberspace" and does not have a nexus with a place of public accommodation); Ouellette v. Viacom, 2011 WL 1882780 (D. Mont. 2011), adopted by 2011 WL 1883190 (D. Mont. 2011) (allegations under the ADA "must establish a nexus between the use of the Web site and an actual, physical place" and the sites in question [including YouTube and MySpace] had no connection to a physical location).
 869 F. Supp. 2d 196, 201 (D. Mass. 2012).
 Cullen v. Netflix, Inc., 880 F. Supp. 2d 1017 (N.D. Cal. 2012) (citing Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104, 1114, (9th Cir. 2000)).
 2014 U.S. Dist. LEXIS 67223 (C.D. Cal. May 14, 2014) at *23.
 Section 508 of the Rehabilitation Act (29 U.S.C. 794d) provides detailed standards for public websites based on access guidelines developed by the Web Accessibility Initiative of the World Wide Web Consortium. There is also an ADA checklist available to determine compliance with Title II: http://www.ada.gov/pcatoolkit/chap5chklist.htm.
 75 FR 43460
 More Delay for DOJ Web Regs – Does it Matter? (June 2, 2014) (available at http://lflegal.com/2014/06/doj-delay/).
 The ANPRM and abstract are available here: http://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201404&RIN=1190-AA61.
 The settlement is available here: http://www.ada.gov/peapod_sa.htm.
 "WCAG" stands for Web Content Accessibility Guidelines, a widely-recognized set of web accessibility standards.