While the Americans with Disabilities Act (ADA) and California’s similar disability discrimination laws have broad applicability, the vast majority of lawsuits allege “access barriers” in “public accommodations.” The reason these access lawsuits far outnumber other ADA lawsuits (e.g., employment or housing discrimination) is that they allow lawsuits by people having only minimal contact with the target of the lawsuit.
On September 19, 2012, California Governor Brown signed Senate Bill 1186 by Darrell Steinberg (D-Sacramento) and state Sen. Bob Dutton (R-Rancho Cucamonga), which was designed to deter abusive tactics in disabled access discrimination lawsuits. The bill has been touted as having the following highlights:
- Caps statutory damages at $1,000, instead of $4,000, for any defendant who corrects all violations within 60 days of service of the lawsuit for sites which were approved and constructed between 1/1/2008 and 1/1/2016 or which have been inspected by a Certified Access Specialist (CASp).
- For sites that don’t qualify for the damage reduction to $1,000 per offense, caps statutory damages at $2,000 per offense when the violations are corrected within 30 days of service of the lawsuit, for business defendants with fewer than 25 employees and have gross receipts less than specified (on avg) over a 3 year period.
- Allows a defendant to request an early evaulation period if a violation is corrected within a specified time period.
- Bans pre-litigation “demand for money” letters and creates rules for demand letters and complaints.
- For any property leased after January 1, 2013, requires a property owner and or lessor to notify the tenant if the property has undergone a CASp inspection. CASp inspections notify owners and tenants if buildings are in violation of ADA regulations.
- Requires the California Commission on Disability Access to promote and facilitate accessibility compliance.
- Requires cities and counties to inform business licensees of their responsibilities to comply with accessibility laws.
From this author’s perspective, the provision that prohibits prelitigation demands for money is misguided. Such demands may be viewed by the general public as “shake down letters.” However, the new law seems to assume that ADA plaintiff attorneys are hesitant to file lawsuits and that, in turn, this provision would deter some claims. In fact, the reason some plaintiff attorneys send letters prior to lawsuits may be to protect their right to an attorney fee award under Civil Code 55.55 (enacted in 2008 under prior reform amendment SB 1608) knowing that many defendants won’t respond to the letters. Civil Code 55.55 promotes early settlement efforts and deters attorney fee claim churning through a reduction of attorney fee awards for plaintiff’s who have not made early settlement efforts. Prior case law held that Plaintiffs needed not make pre-litigation settlement efforts. While no case had yet held that Civil Code 55.55 overruled such prior case law, at least the argument was there to be made. SB 1186 would seem to reaffirm prior case law and may provide plaintiff attorneys an excuse not to make such efforts prior to filing a lawsuit. It will make these claims more expensive for defendants to defend and settle. Why would defendants want such a provision after trying for years to get a pre-litigation notice requirement included in the law?
Additionally, many small businesses may not want to open up their finances to a public argument as to whether they qualify for the lower statutory damage amount. It provides no relief for larger business defendants that are sued for minor or technical non-compliance with architectural standards, many of which involve buildings constructed before such standards were enacted.
On January 14, 2010, the California Supreme Court issued its opinion in Chavez v. City of LA. While this was a Fair Employment and Housing Act case (FEHA), it could help to deter over-reaching by plaintiffs in California disabled access litigation. The Supreme Court unanimously held that under Code of Civil Procedure 1033, the court may deny attorney fees to an otherwise prevailing plaintiff in a civil rights case if the amount of damages recovered is less than the jurisdictional threshold (i.e. $25,000 for Unlimited Civil). Attorney fees and costs are excluded for this calculation (Steele v. Jensen, cited in Chavez). In other words, Unruh and Disabled Persons Act cases typically should be filed in Limited Civil. While some have argued that access cases are properly filed in Unlimited Civil because of the injunctive relief claims, the following would suggest otherwise:
1) Civil Code 52.2 give lower jurisdictional classifications jurisdiction of cases under Civ. Code 52 and 54.3, each of which expressly provide for injunctive relief;
2) Such an argument is similar to the plaintiff’s rejected argument in Chavez that the nature of FEHA cases was not suitable for Limited Civil courts; and
3) Under Steele v. Jensen, cited in Chavez, it is the recovery obtained, not the recovery pled, that determines the proper jurisdictional classification. Thus, if all code deviations are corrected prior to judgment, the injunctive relief claim will be moot, and cannot be a basis for filing in Unlimited Civil. This is especially true where, as in most access cases, there was no pre-litigation notice given. Moreover, a catalyst theory attorney fee award will be unavailable because under the Cal. Supreme opinion in Graham v. Daimler-Chrysler, pre-litigation notice must be given to qualify for catalyst fees.
Chavez v. City of LA was argued before the Cal. Supreme Court in San Francisco on Nov. 4, 2009. My source tells me that it appeared to go well for the City of LA. The issue in the case is whether Cal. Code of Civil Procedure sec. 1033 applies to Fair Employment and Housing Act (“FEHA”) lawsuits. Sec. 1033 allows a judge to deny or reduce an attorney fee award to a prevailing plaintiff who would otherwise be entitled to such an award under a contract or statute. The circumstance under which a judge would have such discretion is when the plaintiff recovers less (exclusive of the attorney fees) than the monetary threshold of the jurisdictional classification in which he or she sued. For example, if the plaintiff sued in Unlimited Civil (> $25,000) but received a damage award of only $10,000, he or she could be denied an attorney fee recovery. In Chavez, the plaintiff was awarded damages of $11,500 but was requesting fees of $880,000. Last year, the Court of Appeal reversed the trial court and held that 1033 did not apply to FEHA, thus facilitating the plaintiff’s attorney fee recovery. The Court essentially reasoned that the public policies behind FEHA trumped 1033. The City of LA petitioned the Supreme Court for review and the Court granted review. I believe this to be a “sleeper” case with deceptive importance. The Court of Appeal’s opinion would seem to apply to nearly all statutes providing prevailing plaintiff attorney fees. As many defendants know, the cost of litigation is often used more than the merits of a claim to coerce a monetary settlement. Therefore, small value cases are typically filed in the most expensive jurisdiction. As it is, the statute has been under-utilized by defendants. Sec. 1033 is one of the few tools left to defendants of abusive litigation. Therefore, I wrote a “friends of the Court” (“amicus”) brief on behalf of the Food & Beverage Association of San Diego County in Support of the City of LA. The Supreme Court will issue its decision within 90 days 0f November 4.