There are a number of new pieces of legislation that have been introduced in the California Legislature to deal with ADA lawsuit abuse. I will be taking a look at each bill separately and giving my take from the eyes of lawyer that defends business owners from these predatory lawsuits. Here is the text of a letter that I sent to the author of the bill.
Unfortunately, AB 52 as currently drafted will not provide any meaningful relief to California business owners for the reasons that I state below. However, I hope that this legislation can improve as it winds it way through the legislative process in 2015.
Read on for more information on Assembly Bill 52.
The Honorable Adam Gray
Member, California State Assembly
State Capitol Room 6012
Sacramento, CA 95814
Re: Assembly Bill 52 (Gray) â€” OPPOSE
Dear Assembly Member Gray:
I am writing to oppose your Assembly Bill 52 as introduced on December 1, 2014. As an attorney in Sacramento that defends numerous small businesses against predatory ADA lawsuits, I would like to bring to your attention a serious practical issue with your legislation.
As you know, ADA lawsuits are a scourge of small business owners throughout California. I have clients up and down the Central Valley that must make difficult business decisions when faced with pending ADA litigation. Often times business owners must decide whether to: 1) make a quick settlement payment to secure a dismissal of the lawsuit; 2) spend a substantial amount of money to fight the lawsuit; or 3) close down their business. None are very good options.
Your AB 52, like other ADA-reform legislation before it, is intended to reduce the harm that predatory ADA plaintiffs are able to inflict. However, the bill misses the mark in terms of the reality â€œon the ground.â€ For the reasons listed below, AB 52 will have no practical effect on ADA lawsuits in California.
AB 52 would reduce the statutory damages from $4,000 per violation to $1,000 per violation if specified criteria are met. Prior legislation, including SB 1186 (Steinberg) from 2012 took a similar route. By all accounts, SB 1186 has been an absolute failure. Media reports state that the pace of ADA filings has only increased, not decreased. My experience as an attorney defending business owners comports with this analysis. I donâ€™t want to see AB 52 face a similar fate.
What might surprise you is that the real threat facing business owners is not necessarily the specific dollar amount of the statutory damages. Now that ADA plaintiffs are prohibited from demanding monetary settlements in pre-litigation demand letters, most ADA plaintiffs head directly to court and file numerous lawsuits without providing business owners any warning. Clients wishing to take advantage of the damage step-downs contained in SB 1186 or your AB 52 would have to make their argument before a judge or jury. It doesnâ€™t just happen automatically.
Herein lies the real problem: the costs of defending a federal civil rights lawsuit can be staggering. For a business owner to have their â€œday in court,â€ they can count on a process that could easily last two years and cost them more than $30,000 in defense costs. ADA plaintiffs know the math and are able to extract settlements anywhere from $5,000 - $15,000 â€” it is usually cheaper to settle than to put up a fight.
Most of my clients would prefer to have their day in court as opposed to making extortion payments to ADA plaintiffs. They qualify as a â€œsmall businessâ€ under SB 1186 and some even have existing CASp reports. However, as small business owners, they cannot stomach the defense costs associated with taking their case to a judge or jury to win or achieve a reduction in damages. Many of my clients have valid defenses and want to challenge what are essentially copy-and-paste lawsuits. But why spend tens of thousands of dollars in attorneyâ€™s fees to reduce damages from $4,000 to $1,000?
The bottom line is that reducing the statutory penalties from $4,000 to $1,000 will do nothing to stop ADA plaintiffs from continuing to file thousands of lawsuits. These lawsuits have nothing to do with the merits of the ADA. The lawsuits are tools that plaintiffâ€™s attorneys use to extract monetary settlement from business owners and landowners. ADA plaintiffs will continue to file lawsuits and extract settlements from business owners because the defense costs are what make these lawsuits so expensive â€” not the level of statutory penalties. It is this reality that AB 52 misses.
I recommend that the California Legislature pass legislation that mirrors federal ADA law. An aggrieved plaintiff may sue a non-compliant business owner or landowner for an injunction. No monetary damages would be allowed absent a showing of actual physical injury. This would mirror the intent (and letter) of the Federal ADA to provide plaintiffs a tool to force non-accessible business to comply with the law, without providing a financial incentive for ADA mills to sue thousands of businesses for financial gain. Simply put, these lawsuits will be reduced in number dramatically once the California Legislature cuts off the money.
As an ADA defense attorney (and former staffer for the late Senator Dave Cox), let me be a resource as you work to pass critically needed ADA reform legislation. While I cannot support your bill in its current form, I would welcome the opportunity to help craft a more effective approach to this serious issue.
If you have any questions regarding ADA lawsuits, please contact my office immediately. I can be reached at (916) 333-2222.