How to Deal with Shake-Down ADA Lawsuits in California
This guide contains only general information.
It is NOT LEGAL ADVICE.
Please note that each state may have different standards.
IB Law Firm is not responsible for the contents of the external links.
It is NOT LEGAL ADVICE.
Please note that each state may have different standards.
IB Law Firm is not responsible for the contents of the external links.
Americans with Disabilities Act ("ADA") was meant to protect persons with disabilities and their access to public places. In California, the Unruh Civil Rights Act provides similar protection, and the California Building Code provides disability accessibility standards such as ramps, doors, counter height, handles, mirrors and the like. However, there are many vexatious plaintiffs and law firms who misuse ADA to target vulnerable small businesses with boilerplate complaints. These lawsuits coerce cash settlements putting many small businesses in tough financial situations. It may cost more than $50,000 to defend against an ADA lawsuit. Small family-owned businesses usually cannot afford the defense and opt into settling even frivolous claims.
Small businesses should be mindful of ADA compliance. There are several methods to deal with ADA lawsuits.
Small businesses should be mindful of ADA compliance. There are several methods to deal with ADA lawsuits.
- PREVENT1
Check the virtual venue
If your business also uses a website or other virtual venues, check them for ADA compliance as well. Read more about virtual ADA-compliance here.
Train your personnel
Train your personnel to immediately accommodate customers with disabilities. If there was a complaint, employees must promptly notify the person in charge of the premises, so that he/she can address the issue and prevent further incidents. This can lower the amount of potential penalties.
Keep track of customers' visits
Some plaintiffs like to "stack" their visits to the non-compliant property to increase the number of potential penalties. To prevent this abusive practice, businesses should promptly remedy any non-compliance and keep a record of all customer complaints - or the lack thereof.
- DEFEND2
Respond to the demand letter
If you received a demand letter, you need to consult with an attorney to assess your potential defenses. It is better to respond to the demand letter and initiate a settlement discussion early. This serves the purpose of minimizing attorney fees on both sides (the non-compliant business may be liable for the plaintiff's attorney's fees).
Respond to the complaint
If the business is sued, it is important to timely respond to the complaint. Failure to do so may result in a default and a default judgment.
Check whether the plaintiff is a vexatious litigant without an attorney
If the ADA lawsuit was filed in a state court in California, check whether the plaintiff is a vexatious litigant without an attorney. The list of vexatious litigants can be found here. If the plaintiff is on the list and has no attorney, he should first obtain a pre-filing order before filing the ADA complaint. Otherwise, the ADA lawsuit can be dismissed.
Verify the allegations
Check all the facts alleged in the ADA complaint or the demand letter. If the filer is a serial filer, there is a chance that they are using a boilerplate complaint and some alleged ADA violations do not actually exist. In some cases, plaintiffs may not even have visited the premises. Such allegations may be sanctionable.
Check for all possible defenses
Check for any other possible defenses, including lack of standing, frivolous claims, and procedural defenses. The strength of your defenses will play a crucial role in the resolution of the ADA lawsuit. It is better to consult with an attorney regarding all potential defenses.
Negotiate the amount
If the alleged ADA violations are true, try to negotiate the settlement amount down and as quickly as possible. The reason to hurry is that the violating party is usually responsible for the plaintiff's attorney fees, and the longer the case goes, the more is exposure. When negotiating the settlement, keep in mind that though the ADA complaint may allege multiple violations and penalties under the Unruh Act, the plaintiff must mitigate his or her damages and not pile up the visits to the business in order to artificially increase the penalties.
Consider the "998 Offer"
California Code of Civil Procedures Sec. 998 provides an efficient tool for ADA lawsuits (If the case is in a federal court, there is a similar option of the Federal Rule of Civil Procedure, Rule 68 Offer). It offers financial incentives for parties to quickly settle a lawsuit. If the defendant makes an offer under this section and the plaintiff does not accept it within a certain time period, it may hinder the plaintiff's ability to recover its litigation costs, including attorney's fees. Please consult with an attorney regarding the timing, amount, and imlications and terms of the 998 Offer.
- RESOLVE3
Settlement agreement
If you reach a settlement with the ADA plaintiff, make sure the settlement agreement includes necessary protections, such as the scope of the release, the non-disparagement, confidentiality, and other protections. Consider including the plaintiff's attorney's fees in the settlement amount to avoid additional motions for the attorney's fees.
Dismissal
If you have a strong defense and the court has ruled to dismiss the case, congratulations!
If you reached a settlement agreement, make sure the plaintiff quickly dismisses the lawsuit. The dismissal should be "with prejudice", which means that the plaintiff cannot file this lawsuit again in the future.
If you reached a settlement agreement, make sure the plaintiff quickly dismisses the lawsuit. The dismissal should be "with prejudice", which means that the plaintiff cannot file this lawsuit again in the future.
Trial
If the case did not settle, then it usually goes to trial. It is better to retain an attorney to represent you at trial. When ADA violations are clear, the case will most likely settle before trial. You may also request a court-appointed mediation, neutral evaluation, or settlement conference to facilitate settlement.
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