For California business owners, ensuring premises (restaurants, retail, storefronts… anything open to the public) are accessible to people with disabilities is not only good for business—it’s also the law. As outside general counsel for clients, we counsel business owners on identifying and eliminating prospective business liabilities such as employment, products, investor relations, and so on.
In this Part 1 of a series of articles for our “Outside GC Corner,” we will discuss mitigating liability related to ADA claims including the legal framework of the Americans with Disabilities Act (ADA) and the California Unruh Civil Rights Act, the risks of noncompliance, the rise of “drive-by” lawsuits, and practical steps to mitigate liability. We’ll also cover what to do if your business is served with an ADA lawsuit.
Basic Legal Framework
The ADA is a federal law requiring businesses open to the public to provide equal access to individuals with disabilities. Title III of the ADA applies to places of public accommodation, such as retail stores and restaurants, mandating that facilities be free of barriers that impede accessibility. The ADA Standards for Accessible Design, first published in 1991 and updated in 2010, provide detailed guidelines on physical accessibility requirements. These standards address everything from parking lot dimensions to clear pathways to accessible seating to door handle designs to the placement of paper towel dispensers, ensuring that businesses accommodate individuals with mobility challenges and other disabilities.
In California, the Unruh Civil Rights Act strengthens these protections. It not only prohibits discrimination based on disability but also imposes statutory damages of $4,000 per violation. Any violation of the ADA is automatically considered a violation of the Unruh Act. Together, these laws establish a robust framework for ensuring accessibility in physical storefronts in California.
Penalties for Noncompliance
Businesses that fail to comply with the ADA and Unruh Act face several types of liability:
- Injunctions: Courts can order businesses to remove barriers and correct noncompliances.
- Statutory Penalties: The Unruh Act imposes a penalty of $4,000 per “violation,” or denial of access. In practice, courts have found up to three violations based on a plaintiff returning to the same premises three times, for a total of $12,000 in statutory liability.
- Attorneys’ Fees: By far, the most important aspect of liability for businesses facing ADA lawsuits is the risk of being held liable for the plaintiff’s attorney’s fees if the business loses the lawsuit. In a nutshell, under both the ADA and the Unruh Act, prevailing plaintiffs are entitled to recover attorneys’ fees from defendants, but defendants cannot recover attorneys’ fees from plaintiffs, even if the defendant prevails. The effect of this one-way attorney fee shifting provision cannot be overstated. For instance, it is not unheard of for a single lost case to cost a business hundreds of thousands of dollars between the cost of unsuccessful defense and the cost of the plaintiff’s successful prosecution. And even for businesses that have legitimate and potentially case-dispositive defenses to the claims against them, the constant looming specter of mounting prevailing-plaintiff attorneys’ fees can scare even the most steel-nerved of business owners into hefty settlements prior to trial.
For small business owners, the attorney fee component often represents the most significant financial risk. Plaintiff firms leverage this imbalance to demand settlements, knowing that ongoing litigation can become prohibitively expensive for defendants, with major to catastrophic downside risk in the event of a loss. Our firm’s team of experienced litigators can provide customized legal guidance aimed at helping you achieve a fair and economical resolution of your case.
Recent Trend: Drive-By Suits
Our firm has noted a trend of a rising number of ADA “drive-by” lawsuits. Such suits get their name because they are based solely on visible ADA violations from the outside, and a would-be ADA plaintiff can merely drive by a storefront, note the violations, and file a complaint, all without ever attempting to patronize the business. These lawsuits often target:
- Accessible Parking Spaces: Issues include an insufficient number of spaces, insufficient clearance adjacent to the space, incorrect markings, or a parking space surface with too steep a grade or slope.
- Outdoor Seating: Failure to provide outdoor seating that meets ADA standards for accessibility by people using wheelchairs.
Given that plaintiffs can spot ostensible grounds to sue by simply observing violations from the outside, business owners should fast-track ensuring that outdoor areas under their control are fully compliant with the ADA standards.
Mitigating Liability with CASp Inspections
For a more exhaustive list of ADA barriers commonly found at physical storefronts, see this circular provided by Public Counsel.
However, business owners assessing their premises for ADA compliance should never assume that any single list is exhaustive. Instead, the better practice is to obtain a Certified Access Specialist (CASp) inspection, which is a proactive way to assess and address potential ADA violations. A CASp professional evaluates whether your property complies with accessibility standards and provides actionable recommendations for remediating the issues. Businesses that pass their CASp inspection, including businesses that cure any violations following an initial inspection, are given a CASp “Access Inspected” certificate. This grants your business “safe harbor” protections, which may reduce statutory damages if a lawsuit is filed against your business.
CASp inspections are relatively inexpensive compared to the dual benefit of making your business more accessible to all and simultaneously mitigating liability. Business owners should display their CASp certificates proudly and prominently at the entrance to their storefronts: proudly, because your business should be proud of its investment in and commitment to accessibility, and prominently, to deter would-be serial plaintiffs from pursuing your business for liability. Investing in a CASp inspection demonstrates a good-faith effort to comply with the law and reduces the risk of litigation.
What to Do If You Are Sued
If your business is served with an ADA lawsuit, do not ignore the lawsuit; failure to respond within 21 or 30 days (depending on the court in which the case was filed) can result in a default judgment. Instead, reach out to our firm, or other competent legal counsel, right away. Note that legally recognized entities such as corporations and LLCs cannot represent themselves in court and must be represented by a licensed attorney to appear and file an answer or any other pleading.
An experienced attorney can help evaluate the claim and navigate settlement negotiations. In addition, there may be unique defenses to your claim that only a personalized evaluation can reveal. For example, some defenses may involve questioning the plaintiff’s standing to sue, and others may involve showing that the proposed remediation is not readily achievable due to specific financial or structural constraints on your business. Skilled legal counsel can help identify and leverage these defenses effectively.
Conclusion
ADA compliance is a critical responsibility for California business owners. While the legal framework may seem daunting, proactive measures like CASp inspections can help mitigate risks. At Weinberg Gonser LLP, we are committed to providing personalized support and expert guidance to help your business stay compliant and successfully resolve litigation. Contact us today to learn how we can assist you.