Serial litigators file lots of cases and that means lots of decisions, sometimes coming in batches. I’ve omitted a few decisions that say nothing more than the cases I have reviewed just to keep this blog manageable. If there is a theme, it is simply that despite very clear trends toward limiting serial litigation by paying more attention to standing, the outcome of any given case depends very much on the judge because there is still relatively little Circuit court guidance on some issues. Like Delacroix’s inspirational painting of Liberty Leading the People, celebrations of freedom from abusive ADA and FHA litigation may be premature. Before making any strategic decision you need to research the specific decisions of the judge who will hear your case because the ancien régime isn’t gone yet.
Ownership without more does not give rise to FHA design/build liability
In Fair Housing Rights Center v. SJ Lofts, LLC et al, 2021 WL 2823073 (E.D. Pa. July 7, 2021) the Court found that merely pleading ownership of entities liable under the FHA was not sufficient to establish personal liability, and that alter ego pleadings require more than conclusory statements. This should give some comfort to those concerned with eternal liability for owners of dissolved entities¹
DOJ regulations establish all the requirements for hotel website accessibility information
Arroyo v. IA Lodging Santa Clara, LLC, 2021 WL 2826707, at *5 (N.D. Cal. July 7, 2021), Arroyo v Huskies Owner LLC, 2021 WL 2711736 (N.D. Cal. July 1, 2021), Arroyo v Ashford Newark LP 2021 WL 2711732, (N.D. Cal. July 1, 2021) and Love v Royal Pacific Motel, 2021 WL 2711731 (N.D. Cal. July 1, 2021) are only the latest in a string of defeats for plaintiffs trying to expand the requirements of the ADA with respect to accessibility information on hotel websites. A near comprehensive list of earlier defeats appears in the opinions. But. . .
Maybe the DOJ regulations are not conclusive . . .
The plaintiff in Lindsay v. Shree Enterprise, LLC, 2021 WL 2711225 (E.D. Cal. July 1, 2021) seemed to have the same problem as the plaintiffs in the Arroyo and Love cases, but avoided dismissal because:
taking plaintiff’s allegations to be true and construing reasonable inferences in the light most favorable to plaintiff, the court finds that plaintiff plausibly alleges that The Greens Hotel website did not “describe accessible features…in enough detail to reasonably permit [her] to assess independently” whether the hotel rooms meet her accessibility needs. . .
This notwithstanding compliance with the DOJ regulations and guidance. At least part of the problem here might be the way the motion to dismiss was presented, but this judge seems willing to disagree with the judges in the Northern District of California who are more willing to dismiss these cases.
Avoiding the DOJ regulations entirely. . . .
“You don’t need a weatherman to know which way the wind blows” according Bob Dylan’s “Subterranean Homesick Blues” and the attorneys in Orlando Garcia v. Raj K. Bhakta & Urmila Bhakta, 2021 WL 2826433 (C.D. Cal. July 7, 2021) were presumably able to see that their claims under the ADA were going to be given short shrift in federal court. When the defendant removed their suit to federal court they dropped the ADA claims, thus setting themselves free of those pesky DOJ regulations, and got the case remanded back to state court. Whether their state law claims will hold up remains to be seen given the Unruh Act’s intent requirement for claims that don’t rest on the ADA, but that’s better than an almost certain loss.
Waiting for an authoritative answer on DOJ regulations
Little white lie, or just a forgotten fact?
In Shumway v Neil Hospitality, Inc. 2021 WL 2877910 (W.D. Tenn. July 8, 2021) the plaintiff sought leave to amend in order to allege a specific intention to visit the town in which the defendant’s hotel was located. Another serial filer of ADA hotel website claims, Deborah Laufer, has suffered a series of recent setbacks because she cannot allege an intent to actually use the information she seeks on hotel websites.² Shumway has filed only 7o or so cases in the Midwest. The limited geographic area makes an intent to visit allegation conceivably true despite the number of cases filed. That she overlooked this important fact in her original Complaint is puzzling and it remains to be seen whether her story stands up beyond the early stages of the lawsuit when the Court must assume her allegations are truthful.
Let’s not forget intent to return.
In Laufer v Buena Motel Corp. Ms. Laufer went so far as to allege an intention to actually visit the hotel whose website she found defective. This was enough to overcome the hurdle over which Shumway stumbled; alleging a concrete injury. She did not, however, say anything specific about whether she would ever return to the hotel or its website. Because the ADA only allows for injunctive relief, and an injunction only benefits those who intend to return, the Court denied a motion for default judgment. It should be noted that this Court, like some others, applies a four factor test for plausible allegations of intent to return that has been rejected in the Ninth Circuit.
Speaking of the Ninth Circuit, the plaintiff in Barajas v. Ashford TRS Walnut Creek LLC, 2021 WL 2711734 (N.D. Cal. July 1, 2021) relied on allegations of intent to return very similar to those in Laufer v Buena Motel Corp. Barajas’ case was not dismissed, the Court observing that “her allegations are nearly identical to those that the Ninth Circuit has approved when evaluating claims brought by ADA testers.” A similar result was reached in Johnson v. Dizdar, 2021 WL 2554069 (N.D. Cal. June 22, 2021). ADA jurisprudence remains a patchwork quilt of theories that vary from court to court.
The risks of default in hotel website cases.
Saim Sarwar, a serial ADA hotel website filer with about 270 lawsuits to his “credit” is having mixed luck with default judgments. In Sarwar v. Bipin-Seth Inc., 2021 WL 2850455 (D.N.J. July 8, 2021) the court denied a motion for default, finding that “tester” status was not sufficient for standing. In Sarwar v. Lake Placid Hotel Partners, LLC 2021 WL 2778574 (N.D.N.Y. July 2, 2021), Sarwar v. Town House Motor Inn, Inc. 2021 WL 2805638 (N.D.N.Y. July 6, 2021) and Sarwar v Southern Tier Hotel, LLC, 2021 WL 2873735 (N.D.N.Y. July 8, 2021) a default was granted with no discussion of standing. If there is a lesson here it is that allowing a default is a risky business – it seems likely these defendants would have done better if they had appeared and filed a motion to dismiss pointing out Sarwar’s standing problem.
It really is all about the money.
Young v. Shoe Palace Corp., 2021 WL 2783719, at *3 (S.D. Cal. July 2, 2021) was the second of two nationwide class actions alleging that the defendant’s website was inaccessible in violation of the ADA. Shoe Palace asked that the Young case be stayed pending the outcome of the earlier case filed in Colorado. The argument is simple: why have two courts simultaneously litigating the same issues? The plaintiff’s counter-argument demonstrates that what is really at stake is money, not accessibility. The Court explains:
Plaintiff disagrees arguing that she and the class will be prejudiced because a stay will jeopardize their UCRA claim which affords them monetary relief. She explains that in the event the ADA claim in this case becomes moot, the Court may decline to exercise supplemental jurisdiction of the remaining UCRA claim, and if so, Plaintiff will be required to file her remaining UCRA claim in state court which will require her prove intentional conduct an element not required if a violation of the ADA is shown.
In other words, losing in Colorado will make it harder for her to exploit the damage provision in the Unruh Act because she would have to prove a harder case. The goal is easy money, not accessibility.
A foolish battle and predictable defeat.
In Schutz v. Costco Wholesale Corporation, 2021 WL 2821140 (S.D. Cal. July 7, 2021) the plaintiff had a simple complaint based on an admitted fact – the membership counter at a local Costco store did not meet the ADA standard for height and could not be used easily by a person in a wheelchair. Instead of just lowering the counter at the cost of perhaps a thousand dollars Costco took the case to trial based on a defense that a disabled plaintiff could use a counter that was set up for merchandise returns, assuming of course that the employee at the membership desk knew this was allowed. Were these employees told it was allowed? No, they were just generally told to be helpful to those with disabilities. Costco lost and will pay its lawyers and the plaintiffs lawyers some large multiple of what it would have cost to lower the membership counter. I haven’t said it in a while, but your motto should be, First Fix, Then Fight. Doing it the other way around is expensive and futile.
Jeffrey Weisen, Pl., v. N. Tier Retail LLC doing business as Speedway, Def., 2021 WL 2661507 (D. Minn. June 29, 2021) and Jeffrey Weisen, Pl., v. N. Tier Retail LLC doing business as Speedway and Agree Bloomington MN, LLC, Defendants. 2021 WL 2661513 (D. Minn. June 29, 2021) are worth reading for their discussion of necessary expert testimony, limits on standing in the 8th Circuit, and the general scumminess of the serial litigation business. The plaintiff’s “expert,” an investigator directed by the plaintiff’s lawyers, was found to not be reliable because he didn’t know anything about the ADA. The plaintiff was proven to be a liar by video evidence from the date of his supposed visit to one store, and for those who want to understand the business of ADA serial litigation, here is what the plaintiff said about his relationship to the law firm: “Weisen learned that he could make money from ADA litigation. . .” Sounds like barratry to me, but Minnesota may not define this conduct as such. Unfortunately the defendants did not escape completely because their own expert’s report didn’t quite put the lie to one allegation concerning the width and depth of a landing. ADA and FHA accessibility cases are defended on the details, and they matter.³
The cost of default
Was about $20,000 in Macia v. Fasail et al, 2021 WL 2719297 (N.D. Cal. July 1, 2021). It appears the attorneys fees were high because of the difficulty in serving some of the defendants. The ADA violations that lead to this award?
(1) the ADA parking lines are faded in violation of 1991 Standards § 4.6.3; (2) the ADA access lines are faded in violation of 1991 Standards § 4.6.3; (3) the international symbol of accessibility is faded in violation of 1991 Standards § 4.6.4; (4) the Restaurant’s tow-away sign has no information in violation of California Building Code § 1129B.4; and (5) the Restaurant’s “no parking” sign on the surface of the ADA parking is faded in violation of California Building Code § 1129B.3.
That’s right – a hundred dollars worth of paint would have fixed all the problems this lawsuit alleged. A system that generates huge fees for tiny problems can be criticized, but it is hard to have much sympathy for a defendant that doesn’t engage in cheap basic maintenance for accessibility. Hire a painter now and avoid hiring a lawyer later.
At the other end of the spectrum in Machowski v. 333 N. Placentia Prop. LLC, , 2021 WL 2639923 (C.D. Cal. June 11, 2021) the Court declined to exercise supplemental jurisdiction over Unruh Act claims and awarded $1000 in attorneys’ fees plus injunctive relief. Default as a strategy depends very much on the particular judge and court. In Whitaker v Joe’s Jeans, Inc. 2021 WL 2590155, at *5 (N.D. Cal. June 24, 2021)the attorney’s fees were only about $1300, but the Court retained jurisdiction to award $4000 in damages under the Unruh Act.
More on supplemental jurisdiction
Gomez v. Fox Rent a Car, Inc., 2021 WL 2634677 (C.D. Cal. June 25, 2021) is in a supplemental jurisdiction limbo – the order merely requires the plaintiff to show cause why state law claims should not be dismissed. Different judges in California have different attitudes toward supplemental jurisdiction over Unruh Act claims and while the trend seems to be to decline supplemental jurisdiction you have to know your judge before making a strategic decision on defending a case in federal court.
¹ See, “Endless liability under the FHA” and the earlier blogs it cites.
² See, “Tester standing under the ADA” and the blogs it cites. Also see the Seyfarth Shaw blog “NY Federal Judge Puts the Kibosh on 17 Reservations Website Lawsuits Filed by Same Plaintiff”
³ See, The role of experts in Title III website litigation – what purpose can they serve?, Quick Hits – Memorial Day Edition, and Quick Hits – Vernal Equinox edition among other cases discussing the use of experts.