Gov. Brown Signs Highly Touted Disability Lawsuit Reform Bill but is it Overrated?

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.

About William Adams

Attorney at Norton, Moore, & Adams, LLP.
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