Have you ever wondered just why certain kinds of ADA lawsuits recur so often, while others are rare? Or how a business owner can be proactive in avoiding ADA and FHA Litigation? On Thursday, March 13, at 1:00 Eastern Time I’ll be presenting a webinar for the TASA Group on “Understanding, Avoiding and Defending Accessibility Lawsuits.” You can register at http://www.tasanet.com/forAttorneys.aspx.
The attorney’s fee provision in the ADA, 42 U.S.C. §12205, is perfectly even handed. It simply allows the court to award attorneys fees in its discretion. Nonetheless, courts consistently hold that ADA lawsuits should be treated like civil rights cases under Title VII, in which a prevailing plaintiff always recovers fees, but a prevailing defendant can only recover fees if the plaintiff’s claims were groundless or without foundation. See, Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1203 (10th Cir. 2000), applying the rule in Christiansburg Garment Co. v. Equal Employment Opportunity, 434 U.S. 412, 98 S.Ct. 694 (1978). This asymetry gives plaintiffs a powerful advantage in any ADA lawsuit and is one factor that drives most cases to early settlement because plaintiffs have nothing to lose and everything to gain while defendants have everything to lose and nothing to gain. Although the train has long since left the station on this interpretation of 42 U.S.C. §12205, it is time for the courts to carefully analyze just how to apply the existing standards in the context of modern Title III ADA litigation.
Courts should start with their analysis of a defense claim for attorney’s fees with the fact that the violations most likely to give rise to an ADA are objectively verifiable. A reasonable investigation of a claimed barrier to access must include measuring slopes, widths, heights and other critical dimensions, because those measurements define the existence of most violations. Almost any violation that a plaintiff pleads and that the Court later finds does not exist represents a violation of Rule 11, because the existence of the violation is almost never subject to reasonable dispute. Peters v. Winco Foods, Inc., 320 F. Supp. 2d 1035, 1040 (E.D. Cal. 2004) aff’d, 151 F. App’x 549 (9th Cir. 2005) is a good example of a Court getting it right. The plaintiff’s sweeping allegations included only one that was sustainable, and since the others were clearly without foundation defense attorney’s fees were appropriate.
It is also clear that because the only relief available under the ADA is injunctive, the remediation of any violation makes further pursuit of claims based on that violation groundless. The Court’s observations in Kallen v. J.R. Eight, Inc., 775 F. Supp. 2d 1374, 1381 (S.D. Fla. 2011) should serve as a model for other courts faced with lawsuits that continue after remediation:
Because of this failure to engage in the due diligence required by Rule 11 of the Federal Rules of Civil Procedure, and Plaintiff’s further insistence on proceeding with his claims after they were clearly rendered moot, the Court finds this lawsuit to be frivolous, unreasonable and groundless, subjecting Plaintiff to payment of Defendant’s attorneys’ fees and costs.
Defendants often complain that they do not receive pre-suit notice or an opportunity to remediate ADA violations. If more courts were willing to recognize that remediation not only moots these claims, but also makes further pursuit of the claims frivolous, plaintiffs would learn to dismiss moot lawsuits instead of pursuing them for no purpose other than to obtain an award of fees.
The asymetry of attorneys fee awards in ADA and other civil rights cases is usually justified by the “chilling effect” if plaintiffs risked an economic loss. There are two problems with this justification in modern ADA litigation. First, there is little risk that a plaintiff who complies with Rule 11 will ever file a groundless lawsuit because most violations are objectively determinable. The only plaintiffs at risk are those who file boilerplate allegations without having investigated their claims. Second, most ADA litigation is filed as a profit-making enterprise by a relatively small number of plaintiffs and law firms, and many cases target small businesses with limited economic resources precisely because the asymetry of attorneys fee awards forces these economically weak defendants to settle. Defense attorney’s fees are unlikely to seriously impact an industry as large and well financed as the ADA litigation industry.
There is no doubt that the ADA is a civil rights statute, but the wholesale adoption of legal principles that were developed fighting intentional acts of racism into a no-fault statute whose violators are often guilty of nothing more than ignorance doesn’t make much sense. However, Courts should have little difficulty awarding prevailing defendants their attorney’s fees by applying the well established standards for such fees to plaintiffs who file or pursue objectively groundless claims.
For the last several years I have tracked the rate of ADA litigation filing in the United States. California consistently leads the nation in ADA lawsuits. It also has the nation’s most punative accessibility statute, the Unruh Act. Florida is consistently second in the number of filings despite the fact that it has no provisions that punish ADA defendants. Between them these two states account for half or more of all ADA filings nationwide.
If it weren’t for Florida, one might conclude that a punative accessibility statute will drive an increase in lawsuits, and this criticism of the California statute lead to reform efforts that were intended to reduce the payoff for plaintiffs of unnecessary accessibility lawsuits. There is no evidence, however, that these reforms have had a real impact on the number of lawsuits filed. Is there any conclusion to be drawn from the similar rates of lawsuits in states with very different regulatory environments?
Yes. It is clear that a punative accessibility statute has no effect at all on rates of compliance with acceessibility laws. The intention of the punative damage provisions in the Unruh Act was to give businesses an additional economic incentive to bring their facilities into compliance with the federal and state accessibility standards, but with two decades of regulation in place there has been no reduction in the number of lawsuits filed. The punative damage incentive has been a complete failure from a regulatory standpoint, enriching lawyers and professional plaintiffs without effecting any change at all in the way businesses deal with accessibility.
It is equally clear that using private litigation as a means of compelling accessibility has been a complete failure nationally. Plaintiffs in Florida don’t seem to have any trouble finding non-accessible businesses to sue, and the number of ADA lawsuits has only increased over the last 20 years. Private litigation in general has proven to be a complete failure as a regulatory tool.
The reason for this is not hard to discern. Businesses do not believe that the revenue lost because of accessibility problems justifies the cost of remediation, and the risk of litigation is still too low to provide a sufficient incentive for compliance with the law. In part this is just a failure of perception. The customer that never comes in the door is invisible, so a business may not understand it is suffering any loss of revenue at all. The willingness and ability of many individuals with disabilities to adjust their behavior contributes to this perception. Most of those with disabilities are good at finding ways to work around accessibility problems and reluctant to complain because complaints are just another way in which their lives become defined by their disability.
The failure of the Unruh Act to change the behavior of business should be a lesson to those who promote private litigation and punative damages as a regulatory tool in accessibility law. While a private lawsuit may change how one defendant behaves, litigation has been a complete failure as a tool for changing how businesses behave in general. Those disability advocates who are truly concerned with accessibility rather than litigation profits should be looking new regulatory solutions, and businesses that complain about the cost of litigation should be looking for ways to become compliant in ways that make economic sense.
 For example, in November of 2013 there were 256 accessibility lawsuits filed nationwide with 96 in California and 76 in Florida. 170 of the 256 lawsuits were filed by serial plaintiffs; that is, plaintiffs who file multiple lawsuits.
By richardhunt in Accessibility Litigation Trends, ADA FHA General, ADA FHA Litigation General, ADA indemnity contribution, ADA Insurance, FHA indemnity contribution, FHA Insurance Tags: ada litigation, FHA Litigation, Indemnity and Contribution, private lawsuits
The rule is simple, but crazy. A contractual indemnity provision that shifts liability for FHA or ADA violations is unenforceable. Equal Rights Center v. Niles Bolton Ass., 602 F.3d 597 (4th Cir. 2010). Owners, operators, contractors and others who may have independent liability for ADA or FHA violations cannot contract among themselves to determine who will ultimately be responsible. More
Like most lawsuits of all kinds, ADA cases almost always settle, usually sooner rather than later. Except where damages are an issue, as in California, the settlement has only three components: what ADA violations will be fixed, when will they be fixed, and how much money will the plaintiff and plaintiff’s attorneys get. The presence or absence of a violation of the ADA Standards is usually not subject to dispute, and the readily achievable standard is heavily weighted against the defendant, so the when and where of remediation are generally not hard to resolve. The hard bargaining comes when the plaintiff makes his demand for fees. ADA plaintiffs and their lawyers have been thoroughly demonized in some parts of the press and blogosphere, but even if you think the plaintiff is the devil, it is useful to know how to calculate his price.
Defendants have an important advantage in settlement negotiations thanks to the Supreme Court’s holding in Buckhannon Board & Care Home v. West Virginia Department of Health & Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001) that a plaintiff cannot recover attorneys fees unless there is a “court ordered change in the legal relationship between the plaintiff and defendant” that favors the plaintiff. If the defendant moots the case by remediating before the case comes to judgment the plaintiff will not recover fees. See, Rush v. General Growth Properties, Inc., 2012 WL 1115518 (C.D. Cal. 2012). This is a key point that defense counsel sometimes overlook. The defendant can always win by remediating, just as the defendant will always lose if it refuses to remediate indisputable violations of the ADA. Because of this, plaintiff’s counsel can only make money in most ADA cases if he settles early, before remediation is complete.
Plaintiffs like to settle early, but they won’t usually settle for free. How much does settlement cost over and above remediation? Smart defendants will agree to pay attorneys fees to the plaintiff as long as the settlement cost is less than the cost of winning. Experienced ADA defense counsel can file a Motion to Dismiss or Motion for Summary Judgment based on mootness for a reasonably low price because he or she will not have to charge for the basic research; however, a “reasonably low price” in federal court is certainly thousands of dollars. Plaintiffs know this, and their demands are usually set at a level low enough to tempt the defendant to give up winning and settle instead.
The settlement dynamic can be more complex if there are real issues about what remediation is required or the defendant simply cannot get the work done fast enough to avoid the expense of litigating the case to some extent. In the end, however, remediation is an unavoidable cost and the issue is how much the defendant pays its counsel to win versus how much it pays the plaintiff’s counsel to settle.
Defendants find this equation aggravating, just as they find lawsuits about what they think are unimportant discrepancies to be aggravating. That aggravation can be turned to profit by defense counsel, but the wise defendant will do the math and take the reasonable settlement that is almost always available when the remediation work is done or is being done. It may feel like paying the devil, but sometimes its cheaper than paying the angels.