California Business Owners Gain New Ammunition Against Expensive Predatory Practices and Abusive Disability Access Lawsuits

Author: Melissa Burdorf, XpertHR Legal Editor

Effective September 19, 2012, a new California law hopes to accomplish two main goals:

  • End the rampant abuse of demand for money letters and frivolous disability access lawsuits filed in California; and
  • Improve access to California businesses for individuals with disabilities.

Demand for money letters are letters sent by attorneys to businesses informing a business that an individual with a disability tried to access the business and noticed that something (such as a railing was too high, or a doorway was too narrow) violated the ADA. The attorney then demands a sum of money or else threatens that his or her client will sue. Many times businesses pay the money thinking that this option is cheaper than a lawsuit.

Disability Access Suits are lawsuits filed against businesses claiming that a business failed to comply with the ADA because the business failed to provide individuals with disabilities equal access to the premises. Alarmingly, almost 40% of the nation's ADA suits are filed in California, yet only 12% of the population of individuals with disabilities lives in California.

While the ADA and California's Unruh Act still requires most businesses that serve the public to make all facilities (and services) equally accessible to individuals with disabilities, this new law intends to:

Snuff out demand for money letters by requiring:

  • NO money demands. Meaning, attorneys can still send letters telling a business of a possible ADA violation but the letter can no longer include a demand for money;
  • Any violation notice/letter must clearly identify the alleged violation so that a reasonable person could identify the basis for the claim;
  • Attorneys that send a violation notice/letter do so at least 30 days before filing a disability access lawsuit; and
  • Attorneys that send letters regarding potential ADA violations copy:
    • The California State Bar. The Bar will then examine the letter to make sure it meets the requirements of the new law; and
    • The California Commission on Disability Access (CCDA). The CCDA will compile a Top 10 list of violations which will get posted on its public website by July 1, 2013. The CCDA also will post a list of attorneys/law firms who are filing the majority of the lawsuits.

Provide a large monetary relief for business that are not intentionally violating the law and are willing to remediate the problem.

For example, CA businesses:

  • Built/completed after January 1, 2008 or that received a Certified Access Specialist (CASp) inspection will have 60 days from receipt of a complaint to fix a violation. If the business fixes the violation that business will see a reduction in the amount of potential legal damages from $4,000 per violation to $1,000 (75% reduction). and
  • With 25 or less employees that have not had a CASp inspection will have 30 days to fix a violation and, if remedied, will see their potential legal damages reduced from $4,000 to $2,000 (50% reduction).

Address the Misuse of California Law and Educate Business on ADA Access Issues.

This new law is aimed at:

  • The misuse of California's Unruh and Disabled Person's Act by individuals (plaintiffs) bringing multiple claims for the same violation on different occasions (stacking) in order to increase their potential of a larger monetary award. Courts are now required to look at the reasonableness of the individual's actions - such as the continuous return to the same business - in view of the individual's responsibility under the law to lessen his or her damages.
  • Incentivizing local businesses to comply with the ADA and helping educate businesses in expanding ADA access. To accomplish this goal business licenses and renewals will include $1 fee to support local cities and counties to expand the CASp program in the businesses' communities.

Overall the new law will offer small CA business owners:

  • Significant relief to the predatory practices of ADA lawyers;
  • Incentive to root out and correct ADA access violations quickly;
  • A break in potential legal damages that result from lawsuits filed on behalf of serial plaintiffs; and
  • Incentive to obtain a CASp inspection.

This law is effective immediately but it only applies to lawsuits filed after the law's effective date (September 19).

Additional Resources

Employee Management > Disabilities (ADA)

EEO - Discrimination: California