The horns of a dilemma – landlords, tenants and emotional support animals under the FHA

July 9, 2020 By Richard Hunt in FHA, FHA Emotional Support Animals, FHA Guidance, FHA Regulation Tags: allergies, Cohen v Clark, Emotional Support Animal, FHA Defense, Iowa Supreme Court

ancient minoan painting of a man holding the horns of a bull This blog and the next were prompted by two recent efforts by state officials to deal with the problem of emotional support animals. One was a decision from the Iowa Supreme Court that puts a state law overlay on how to deal with conflicts between disabled and non-disabled tenants. You can find the details in William Goren’s blog.¹ The other was a recent legislative effort in Florida, the passage of Senate Bill 1084, which adds specific anti-discrimination provisions for emotional support animals.² These are far from the first efforts at the state level to do something about animals and disabilities,³ but they illustrate the problems these laws create for landlords trying to deal with fake emotional support animal requests.(4)

The Iowa Supreme Court’s decision in Cohen v. Clark is, to be blunt, completely wrong. This is because it suggests landlords can be liable to non-disabled tenants if they offer a disabled tenant the wrong accommodation. The case offers a “balancing test” for deciding whether the landlord did the right thing, but the test still requires landlords who receive an accommodation request to choose between the risk of a state court lawsuit for breach of lease and a HUD investigation or federal court lawsuit for failure to accommodate.

The plaintiff was a tenant with allergies who chose a no pets apartment for that very reason. When the landlord permitted another tenant to keep an emotional support animal as a reasonable accommodation under the Iowa Civil Rights Act, the first tenant sued. He claimed he had been forced out of his apartment because the animal aggravated his allergies despite efforts by the landlord to mitigate the effect of having the animal in the same building. Like any landlord-tenant dispute the case went through the Iowa state court system, and because it involved advice from a state agency the discussion centered on provisions in the Iowa Civil Rights Act rather than the Fair Housing Act. However, the Iowa Supreme Court observed that:

The ICRA’s housing provision is nearly identical to the Federal Fair Housing Act (FHA), compare Iowa Code section 216.8A(3)(c)(2), with 42 U.S.C. § 3604(f)(3)(B) (2018), so cases interpreting the FHA may be instructive in our interpretation of the Iowa Act.

In other words, the choice of state or federal law didn’t really matter, and in fact the Court relied mostly on federal FHA precedents because there are almost no Iowa Civil Rights Act cases.

The Court ruled for the plaintiff. The state law aspects of the decision were straightforward. The plaintiff had a lease that included at least an implied obligation to keep the apartments pet free and the landlord breached that lease by allowing pets. It rejected the landlord’s first line of defense, which was that it acted on informal advice from the Iowa Civil Rights Commission to the effect that the landlord had no choice but to permit the emotional support animal. The Court found a landlord could not rely on that kind of informal advice. The Court then engaged in its own analysis of whether the landlord was excused from complying with the lease by its reasonable accommodation obligation. It applied a balancing test that weighed the interests of the parties to decide which tenant would have to give in some respect. It found in this case the landlord should have denied the disabled tenant’s ESA request because there were other equal accommodations possible that would not have interfered with the plaintiff’s rights. Having made the wrong choice, the landlord was liable to the non-disabled tenant for breach of lease.

The Court manages to reach this conclusion without considering that its decision puts the landlord squarely on the horns of a dilemma. Granting the accommodation exposes the landlord to state law liability for breach of lease while denying the request exposes the landlord to state and federal law liability for refusal to accommodate. As guidance the landlord has nothing but a nebulous “balancing test” that is admittedly fact specific, meaning that earlier court decisions are unlikely to be helpful as guidance on what to do.

It is clear that the FHA preempts state law when they are in conflict. In Astralis Condo. Ass’n v. Sec., U.S. Dept. of Hous. and Urb. Dev., 620 F.3d 62 (1st Cir. 2010), for example, the First Circuit refused to recognize a defense to an accommodation claim based on a conflicting local statute. It held that: “Astralis must regulate the use of common elements in compliance with the FHAA’s anti-discrimination policies, regardless of local law.” A step beyond relying on state law as a defense to an FHA claim is the use of state law to claim affirmative relief for damages arising out of compliance with the FHA. In S & R Dev. Estates, LLC v. Town of Greenburgh, New York, 336 F. Supp. 3d 300 (S.D.N.Y. 2018) a property owner whose deed restrictions violated the anti-discrimination provisions in the FHA sought compensation under a state law for the loss of value the elimination of those restrictions would cause. The Court rejected the claim, holding that: “Enforcing a state statute that compensates an FHA violator would undermine Congress’s purpose in achieving the result of the availability of fair housing.”

Although they do not apply to claims by a third-party these cases and cases applying federal preemption more generally suggest that the FHA preempts any state law permitting non-disabled tenants to sue for a breach of lease that arises from the landlord’s granting a reasonable accommodation. It should not matter whether the landlord was right or wrong in granting the accommodation because any liability imposed on a landlord for the consequences of an accommodation to third-parties is bound to interfere with the landlord’s consideration of the accommodation request and to make it less likely the request will be granted. The decision in Cohen v. Clark and its balancing test are interesting, but there is no doubt the result is wrong. A tenant should never be permitted to sue a landlord based on the landlord’s granting of an accommodation request because allowing such suits undermines the purpose of the FHA.

¹ ESA in Iowa? Not under Iowa Law if in Residential Complexes or Dormitories

² The bill can be found at https://www.flsenate.gov/Session/Bill/2020/1084

³ A list of state laws dealing with service dogs in an ADA setting can be found at https://www.animallaw.info/topic/table-state-assistance-animal-laws. Information on laws concerning assistance animals in housing can be found at https://www.animallaw.info/content/fraudulent-service-dogs

4 HUD has tried to help as well, not with great success. See HUD’s new Guidance on assistance animals

Quick Hits – Now is the summer of our discontent edition

June 22, 2020 By Richard Hunt in Accessibility Litigation Trends, ADA - Hotels, ADA - serial litigation, ADA Litigation Procedure, ADA Mootness Tags: ADA defense, Braille gift cards, COVID-19, mootness, negligence and ADA, Readily Achievable, Service Counters, Strojnik, Voting Rights Alabama

Here’s a very unhappy looking King Richard III contemplating the murder of his nephews and possible rivals for the throne, or perhaps the latest headlines. While the latest cases on accessibility law don’t usually look like light reading, right now they are a cheery diversion from the rest of world events. Here we go:

Voting Rights and the ADA

People First of Alabama v. Merrill, 2020 WL 3207824 (N.D. Ala. June 15, 2020) deserves its own blog, but illustrates how the reach of the ADA is sufficient to touch every aspect of public life. In People First the plaintiffs were elderly and disabled, suffering as a result from an enhanced risk of significant illness or death from Covid-19. They claimed that Alabama’s restrictive absentee voting laws violated Title II of the ADA by depriving them of access to voting, which is for ADA purposes a state program for which the ADA requires equality of access. The Court agreed in most respects and entered a preliminary injunction requiring the state to make absentee voting easier in several respects. The case is on appeal, so the outcome remains uncertain, but it illustrates how the provisions of Title II of the ADA can affect every state and local government program, including those usually thought of as purely political.

Mootness done right, eventually

Johnson v. Montpelier One LLC, 2020 WL 3268613 (N.D. Cal. June 17, 2020) appears to be on the way to dismissal for mootness, but only after a false start with an affidavit that did not state in sufficient detail how the alleged architectural barriers had been remediated. Mootness is the best defense to a physical access case under the ADA, but cutting corners with a conclusory affidavit won’t get you there.

Accessible counters – a Ninth Circuit victory for common sense.

Kong v. Mana Inv. Co., LLC, 2020 WL 3265179 (9th Cir. June 17, 2020), Johnson v. Starbucks Corp., 2020 WL 3265063, at *1 (9th Cir. June 17, 2020) and Lindsay v. Starbucks Corp., 19-55738, 2020 WL 3265180, at *2 (9th Cir. June 17, 2020). Are a trio of Ninth Circuit rulings on an issue that has been litigated frequently: Does the counter length requirement in the ADA require that the counter be free of clutter? The answer is a definitive no, at least in the 9th Circuit. *

Braille gift cards and the ADA – the answer is no.

Dominguez v. Taco Bell Corp., 2020 WL 3263258 (S.D.N.Y. June 17, 2020), Mendez v. BG Retail LLC et al 2020 WL 3318293 (S.D.N.Y. June 18, 2020) and Delacruz v. Jamba Juice Co., 2020 WL 3250392, at *1 (S.D.N.Y. June 16, 2020) are among a growing number of cases (at least 10 decisions this week alone) holding that the ADA does not require braille gift cards because it does not require modification of products. This is now a predictable result, but it is bothersome that dozens of lawsuits making a patently absurd claim were filed in the first place, that who knows how much money and judicial resources have been wasted on attorneys’ fees defending them, and that it appears the lawyers for the plaintiffs who filed the lawsuits will suffer no consequences.

Another federal court declines supplemental jurisdiction over Unruh Act claims

In Schutza v. Enniss Family Realty LLC et al 2020 WL 3316969 (S.D. Cal. June 18, 2020) another federal judge in California declined to exercise supplemental jurisdiction over an Unruh Act claim, depriving the plaintiff of the damage remedy that drivers higher settlements in California. The decision is not unique* but other courts disagree with the arguments for declining supplemental jurisdiction. Until the 9th Circuit rules on this issue the rule will be to know your judge because these decisions are being made on a court by court level.

Negligence and the ADA

Strojnik v. Braemar Partn., 2020 WL 3250184 (S.D. Cal. June 16, 2020) adopts the majority view that the ADA is not a safety statute and that ADA accessibility violations do not automatically give rise to a claim for negligence. I’ve blogged about this before, as has William Goren. See,Personal injury and the ADA – is every violation per se negligence? ADA and FHA Quick Hits – is it safe to come out yet edition. and Goren’s blog at Negligence/negligence per se and title III of the ADA: Opportunity for personal injury attorneys to expand their practice. As is often the case in ADA matters, you need to know your court and state law to know whether the ADA plays a role in negligence claims.

Strojnik again – and perhaps in real trouble.

Peter Strojnik is a prolific litigator who does not always lose, but may have pushed his luck too far. In Strojnik v. Village 1017 Coronado, Inc., 2020 WL 3250608 (S.D. Cal. June 16, 2020) his claims were dismissed for lack of standing because he never visited the defendant hotel, but in its discussion the Court noted that in another case:

the Court has an evidentiary hearing scheduled for July 24, 2020 on the issue of whether Plaintiff should be declared a vexatious litigant in part for misrepresenting his disability status in that complaint.

Strojnik has already been declared a vexatious litigant by another Federal Court in California and was disbarred in his home state of Arizona. See, Strojnik v. IA Lodging Napa First LLC, 2020 WL 2838814 (N.D. Cal. June 1, 2020). He remains unrepentant and undeterred because there are few effective remedies against those who abuse the legal system and even fewer judges willing to take strong action against lawyers and non-lawyers who use the system to wreck legal and economic havoc on the lives of innocent business owners.

Pleading the “readily achievable” standard.

Girotto v. LXC, Inc. et al, 2020 WL 3318275 (S.D.N.Y. June 18, 2020) includes a number of little lessons. For example, it is not basis for early dismissal to call the plaintiff a liar because the Court assumes the allegations in the complaint are true. It does touch on an issue on which not all courts agree; that is, whether the plaintiff must plead that removal of architectural barriers is readily achievable. This Court says no; the plaintiff must prove the remediation is readily achievable at trial, but does not need to plead it. Other courts have disagreed**, so know your court and judge is, as usual, the rule.

The danger of being the enforcer

The plaintiff in Sullivan v. Storer Transit Sys., 2020 WL 3254400 (N.D. Cal. June 16, 2020) has a physical disability that is not apparent. When she tried to sit in the rows of a casino bus reserved for the disabled she was (she claims) yelled at by the driver and told to sit elsewhere. After a failed original complaint the beefed up allegations in her amended complaints were sufficient to state a cause of action. Sometimes it is necessary to make sure that those without disabilities don’t take advantage of disabled seating or parking, but businesses that choose to judge need to have policies to prevent hasty action. Legitimate resentment against those who abuse the disability rights laws has to be tempered with the understanding that not all disabilities are obvious.

Advocacy or idiocy? A blogger prevails

Straw v. Dentons US LLP, 2020 WL 3182775 (S.D.N.Y. June 11, 2020) is only tangentially an ADA case although an ADA claim was made. The Plaintiff, who was suspended from the practice of law in Indiana, sued a blogger and a legal publisher for reporting on his difficulties. The Court had little trouble finding the claims should be dismissed, but did make an argument that seems likely to be wrong. Based on a 2nd Circuit decision in an employment case the Court held that the ADA anti-retaliation provision does not give rise to individual liability and dismissed the claims against the blogger sued by Mr. Straw. It makes sense in an employment context to hold only the employer, not individual agents of the employer, liable for retaliation against a disabled person. In this case, however, it appears that the blogger was acting as an individual rather than merely as an agent of his employer. To say that no individual can be liable for retaliating against a person advocating for the disabled doesn’t really make sense. A more pertinent problem with the plaintiff’s claim here is that the ADA’s anti-retaliation provision prohibits “discrimination,” which implies disparate treatment of some kind. Those who criticize the ADA plaintiffs’ bar² are not discriminating against them in any meaningful sense of the word.

* I have blogged about this trend several times, most recently in Blogathon – not so quick hits on the ADA and FHA.

** See, “Readily Achievable” – It’s as easy as pie – maybe.

¹ See, for example, Quick Hits – Halloween Candy edition. Quick Hits – Tax Day Edition and Counter clutter – Is it a barrier or a bad policy under the ADA?

² I should say I have a personal interest in this, having been threatened many times with suits for defamation based on my blogs. So far no one has had the nerve to follow through on those threats, but there is clearly a segment of the ADA plaintiffs’ bar that doesn’t like those who tell the truth about their business.

Injury without recourse – a primer on ADA standing from the 7th Circuit

June 18, 2020 By Richard Hunt in ADA, ADA - Standing Tags: Access Living of Chicago, ADA defense, ADA standing, organizational standing

One of the problem disability rights organizations face when they try to create sweeping change through litigation is that laws like the ADA protect individuals and redress individual injuries. The Supreme Court has recognized something called “organizational standing” that recognizes the harm an organization may suffer from illegal discrimination, but the Seventh Circuit’s recent decision in Access Living of Metro. Chicago v. Uber Techs., Inc., 958 F.3d 604 (7th Cir. 2020) illustrates how this court created doctrine will always end up limited by the actual words of the statute.

“Standing” comes from the provision in the U.S. Constitution that says Federal Courts can hear cases and controversies. The Supreme Court has long said that for there to be a “case or controversy” you need a plaintiff that has been harmed in a way the court can fix. Without both there is no case or controversy and the court doesn’t have the power to consider the matter. This is a basic constitutional requirement, but it isn’t the end of the story. When the harm comes from some violation of a federal law that law will say just who has the right to file a lawsuit That is where Access Living found it had a problem.

Access Living claimed that it was harmed by Uber’s failure to provide services available to the disabled equal to the services offered others. Access Living claimed that when it paid for transportation for its disabled staff members and others it had to pay too much because it couldn’t always use Uber, which was often the least expensive way to travel. The Seventh Circuit agreed that this was an injury – Uber’s supposed discrimination against the disabled cost Access Living money.* It was also an injury the court could in theory do something about. The ADA would permit an order that required Uber to provide equal service so that Access Living wouldn’t have to spend to much in the future. Thus, Access Living met the requirements of Article III of the Constitution – it had “standing” to bring a lawsuit.

For Access Defense the problem was the next step. Did the ADA give Access Defense the right to file a lawsuit? The ADA forbids discrimination against those with disabilities and with those who are associated with someone who is disabled.** This is common in civil rights statutes, and prevents attacks on organizations and people who might try to assist the disabled. However, Access Defense was not claiming that Uber discriminated against it – the discrimination was against its disabled staff who were not given equal Uber service. According to the Seventh Circuit merely being harmed by discrimination against someone else was not enough for Access Living to have a right to sue under Title III of the ADA. The provision in Title III that says who can sue to enforce Title III gives that right to anyone “being subjected to discrimination.”† The Seventh Circuit read this to mean that only a direct victim of discrimination has the right to sue. Someone who has indirectly suffered from discrimination cannot.‡ The staff members who couldn’t ride an Uber were subjected to direct discrimination; Access Living was only indirectly harmed. Thus Access Living could be a victim of discrimination without having the right to sue.

It is worth noting that this ruling only applies to Title III of the ADA. Other civil rights statutes under which disability rights groups often sue are not as limited as Title III of the ADA. The Fair Housing Act, for example, gives the right to sue to any “aggrieved person,” which is defined to mean any one injured by discrimination. The FHA allows individuals and entities who are indirectly harmed by discrimination against others to sue because it only requires an injury, not a direct injury. At the other end of the spectrum are laws like the Air Carrier Access Act which contains no provision for a private lawsuit. Even a direct victim of disability discrimination in violation of the ACAA cannot sue. According to the Seventh Circuit even Title II of the ADA would have granted Access Defense the right to sue because a Title II case can be brought by anyone “alleging discrimination on the basis of disability” even if they were not the direct subject of the discrimination. Courts have treated Title VII of the Civil Rights Act of 1964 just like Title III of the ADA, holding that the statute only allows suits by “employees or applicants for employment,” not organizations of employees. See, Cook v. Billington, 541 F. Supp. 2d 358, 363 (D.D.C. 2008).

It also has to be noted that while this is a good case for defendants, it isn’t going to stop organizations from suing under Title III of the ADA. Under many circumstances an organization can file suit as a representative of its members who were subjected to discrimination even if it suffered no harm itself.‡ There is a more general lesson though; when considering who has a right to sue for a violation of civil rights, including the rights of the disabled, merely invoking “organizational standing” or even standing under Article III of the Constitution isn’t enough. Who was harmed, how they were harmed, and the precise words of the statute all matter.

* The appeal came from an early dismissal of the claims by Access Living when the Court was only considering what Access Living said happened, not whether it was actually true. The first requirement in any lawsuit is that you make a claim that can be recognized if your allegations are true. If you can’t do that, whether they are true or not doesn’t matter.

** The prohibition against associational discrimination is found in § 12182(b)(1)(E), which says it is discriminatory to deny equal services to “to an individual or entity because of the known disability of an individual with whom the individual or entity is known to have a relationship or association.”† Section 12188(a)(1).

‡ The difference between direct and indirect harm isn’t always clear, but in this case could be illustrated by what lawyers love; a hypothetical. Suppose Access Living tried to open a corporate Uber account and was told that it could not do so because disability rights organizations are not allowed to open such accounts. In that case Access Level would be a direct victim of discrimination that came from its association with disabled individuals.

‡ See, for example, Equal Rights Ctr. v. Abercrombie & Fitch Co., 767 F. Supp. 2d 510, 525 (D. Md. 2010), on reconsideration in part (Jan. 31, 2011). Like Access Living, the plaintiff in Equal Rights Center was not able to show a right to sue for the injuries it supposedly suffered as a result of discrimination against its members, but it was able to show it had a right to sue as a representative of its members.

The “Disabled Access Credit Expansion Act” – a nearly useless effort from every perspective.

June 2, 2020 By Richard Hunt in Accessibility Litigation Trends, ADA, ADA - serial litigation, ADA FHA Legislation, ADA Policies Tags: ADA defense, ADA Education and Reform Act, ADA Legislation, Disabled Access Credit Expansion Act, Joe Biden

First Continental congress Readers of my blog will recall that Republican efforts in the last few years to reform the ADA not only failed to pass, but also failed to address the real problems in enforcement of Title III.¹ An effort by Democrats is now part of the “Biden Plan for Full Participation and Equality for People with Disabilities.” The “Disabled Access Credit Expansion Act,” was introduced in 2019 bill by a group of Democratic Senators. The proposed legislation will make some very modest improvements in the ADA, but like its Republican counterpart mostly serves to point out deficiencies in the ADA that require far more aggressive action on behalf of small businesses and those with disabilities who continue to suffer from a lack of access to those businesses.

We can start with the centerpiece of the Act, which increases the tax credit for ADA expenditures with an adjustment for inflatoin and expands the definition of small business to include businesses with up to $2,500,000 in gross receipts. This sounds nice, but ignores the fact that the tax credit is becoming increasingly irrelevant with the passage of time. Under Section 44 of the Internal Revenue Code the tax credit applies only to facilities first placed in service before November 5, 1990. In other words, only to buildings at least 29 years old. There are plenty of such buildings, but the tax credit is useless to the owners or tenants of buildings that were built after November 4, 1990 but don’t meet ADA standards; that is, most buildings. The guilty parties – the original owners and developers – usually no longer own the buildings and are effectively exempt from liability. After all no one, including the Department of Justice, is going to track down the original owner of a strip shopping center built 20 years ago and flipped three times before landing in the hands of the current owner. It is the current owner and tenants who will have to spend money to make the property ADA compliant because although it isn’t their fault they have barrier removal liability. These innocent subsequent owners and tenants get nothing in the way of tax credits under the existing law or the amended law. If the Senators sponsoring S 2290 wanted to help small businesses and those with disabilities they would continue the existing tax credit for pre-1990 buildings and extend the tax credit to every owner or tenant except the original owner/developer for buildings constructed after 1990. Right now the tax credit has so little application it is effectively useless as a policy tool, and it becomes more useless with every passing year.

The Act next addresses the very real problem of funding for ADA mediation. As the Act points out, money to fund mediation of ADA disputes dribbles out at the end of the tiny pittance ($4,500,000 in 2019) allocated for all alternative dispute resolution at DOJ. That is one ten thousandth of DOJ’s budget, giving a very clear picture of just how little DOJ values ADR. The Act authorizes various mediation expenditures for ADA disputes and then guarantees $1,000,000 for that purpose. That is still less than four one-hundred thousandths (.00003571 to be exact) of the 2019 DOJ budget. It also amounts to less than $100 per private ADA lawsuit brought under Title III and even less if Title II lawsuits are included. That amount is supposed to fund administration, training, and paying the mediators. This is at best a symbolic gesture, and what it symbolizes is that Congress and the DOJ really don’t care about alternative dispute resolution of ADA complaints.

The last part of the Act requires the collection of data about just who is calling the ADA Information Line. The goal is to inform efforts by DOJ to make the information line more useful, but it isn’t clear how the data will be used or even if it will be used. Beefing up the ADA Information Line isn’t going to do any good if DOJ continues its current education plan, which is essentially to throw some stuff up on the web that you won’t find unless you already know you need to look for it. One start might be, instead of collecting data, to make the line available for at least all of every business day. Right now calls are not taken before 9:30 a.m. or after 5:30 p.m. Eastern Time on Monday, Tuesday, Wednesday and Friday, with a three hour break from noon to 3 during which the line is down. On Thursdays the line is only open from 2:30 to 5:30 Eastern Time. There is no service on weekends at all. For businesses on the West Coast this means the service is only available during the working day for three and half hours a day. Even during the current pandemic my local pizza parlor answered the phone and delivered pizza for more hours than DOJ answers the Information Line.

If members of Congress from either party want to do something effective to improve access for the disabled and reduce litigation what we need is clear:

Small businesses should be informed of their ADA obligations directly.² This could be through the IRS, which already contacts every small business once a year, through the Small Business Administration, whose programs are in direct contact with small businesses, or through the states, who are in a position to send ADA compliance information to every entity that is created. At the very least there should be an aggressive social media outreach that is specifically funded in order to overcome DOJ’s clear prejudice against eduction. DOJ’s current plan, which lets private lawyers educate businesses by suing them, is hugely wasteful as well as the slowest way imaginable to get the word out.
As noted above, the existing tax credit should be expanded to include all but the original owners of post 1991 facilities if they meet the definition of small business, making it possible for small businesses to pay for the remediation they probably need.
Mediation should be funded at an appropriate level; that is, a level that is sufficient to mediate every ADA dispute under Titles II and III, and early mediation should be required for every lawsuit brought under Titles II and III as a means to reduce the attorneys’ fee overhead that makes ADA litigation such an extraordinarily inefficient way to achieve accessibility.

The number of ADA physical accessibility lawsuits has remained constant or increased slightly for many years³ even though a larger and larger percentage of the public spaces covered by the ADA were built after 1991. I can drive through Dallas and its suburbs and see ADA violations from the street without going more than a few blocks, and the situation is the same in every city or town I’ve visited. We can point to the success of the ADA in shiny new malls or theaters built by the largest and most sophisticated developers, but for strip shopping centers, small restaurants, and older facilities the ADA has failed and will continue to fail until Congress decides it is worth spending more than pennies on accessibility education and remediation. The “Disabled Access Credit Expansion Act” has a good name, but like the Republican “ADA Education and Reform Act” it would fail, even if passed, to do any real good for either those with disabilities or the small businesses that serve them.

¹ See, for example, Here we go again – ADA legislation to discourage serial litigation

² I’ve pointed out before that just because the ADA is now 30 years old does not mean it is well known. Thousands of new small businesses are opened every year, and for them the world of regulation, including ADA regulation, is brand new.

³ Even disregarding the surge in ADA website lawsuits that DOJ has encouraged by refusing to publish regulations on website accessibility.

A quick hit – arbitration could tame the ADA website litigation monster update

June 1, 2020 By Richard Hunt in Accessibility Litigation Trends, ADA, ADA - serial litigation, ADA Internet, ADA Internet Web, ADA Web Access, ADA Website Accessibility Tags: ADA defense, ADA Website Litigation, Browsewrap, Clickwrap, Miracle-Pond, Shutterfly, website arbitration

Ancient Greek Vase with image of Hydra I’ve written before about the possibility that a properly written clickwrap or browsewrap arbitration agreement could help tame the ADA litigation monster, which like the Hydra seems to grow two new heads for each one that is cut off. A new decision from the United States District Court in Illinois, Miracle-Pond, et al. v. Shutterfly, Inc., No. 19-CV-4722, 2020 WL 2513099 (N.D. Ill. May 15, 2020) confirms that except in cases involving California consumers* a clickwrap or browsewrap type agreement can indeed force a lawsuit to arbitration provided it is properly written and presented to the user.

In Miracle-Pond the plaintiff opened a Shutterfly account when the Terms and Conditions included a class-action waiver and a provision permitting unilateral amendments to those Terms. Later an arbitration provision was added. That provision remained in place when the lawsuit – which claimed Shutterfly improperly used biometric information – was filed. Then, three months after the lawsuit was filed, Shutterfly sent all its account holders an email notice that listed a number of changes to the Terms and Conditions and included a reference to the arbitration provision. The email declared that leaving an account open would constitute assent to the new Terms and Conditions.

The Court first found that the agreement was a clickwrap rather than a browsewrap agreement because it required explicit consent. This distinction is important because browsewrap agreements are harder to enforce. They require actual or constructive knowledge of the terms and conditions. In Miracle-Pond the plaintiff was using a mobile app. that required a click to use the software, making it somewhat easier to show assent to the arbitration clause.** Since she clicked, her assent was clear. Website operators need to consider how to force users to acknowledge the existence of terms and conditions before they begin to use the website; something that should be easier as businesses adapt to consumer laws that require notice of how cookies are used.

The Court next found that based on Illinois state law¹ Shutterfly’s unilateral addition of an arbitration provision was enforceable. This was true even without the post-lawsuit email notice, which the Court discusses but does not rely on.

A typical ADA website lawsuit is not filed with the intent to prosecute the claims to trial, but rather to use the threat of litigation expense to make immediate settlement the only business-like response. That is why plaintiffs’ firms ask for amounts that are clearly absurd in terms of work performed but slightly less than the cost of any likely defense. The only way to eliminate this leverage is to move the lawsuit from federal court to arbitration, where a defense can be mounted at a reasonable cost and the plaintiff’s lawyers forced to go beyond mere allegations to actual proof – an expense many are not prepared to incur. Unlike a motion to dismiss based on a lack of standing or a claim concerning the ADA’s application to the internet that is almost certain to fail, a motion to compel arbitration has a reasonable chance of success if the arbitration provision is properly drafted and, most important, properly presented to the user. Miracle-Pond and similar cases confirm that click-wrap or browse-wrap agreements could tame the ADA litigation monster, and no website or mobile app operator should fail to act to take advantage of this fact.²

* California’s consumer protection laws limit class action waivers of any kind.

** Those interested in how to create an enforceable browsewrap arbitration agreement for ADA website lawsuits can refer to my earlier blog “Browsewrap could tame the ADA website litigation monster.” I advise all of my clients to include a properly formatted browsewrap arbitration agreement for website accessibility claims in their Terms and Conditions.

¹ Arbitration agreements and their enforcement are generally a matter of state law, even when federal claims are involved. Although most ADA website lawsuits are filed in California, New York and Florida, choice of law principles may require that the law of another state be followed, so website operators need to consider their own state’s laws in structuring these agreements.

² The good news doesn’t mean you can simply slap an arbitration agreement in your terms and conditions. Careful thought has to be given to the relevant choice of law principles as noted above. In addition local consumer protection laws need to be considered; it may be desirable to have a narrow arbitration provision in order to avoid triggering application of one of those laws. Most important, the terms and conditions must be properly presented to the user.

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