The battle against predatory lawsuits rooted in barriers to disabled patrons got a boost this week with noncontroversial legislation awaiting the signature of Gov. Jerry Brown.
Senate Bill 269, backed by three lawmakers from this area, would allow some small businesses time to fix minor, technical violations of laws requiring access for the disabled. It falls far short of the meaningful reform sought by opponents of predatory lawsuits, but represents their first potential victory after years of unsuccessful effort.
“Predatory lawyers have been using ADA laws as a get-rich-quick scheme,” said Sen. Cathleen Galgiani, D-Manteca, the bill’s principal co-author.
There has been widespread media coverage about the problem of what has been described as serial ADA litigation. A handful of highly litigious plaintiffs have in fact targeted small businesses, especially those without the financial resources and sophistication to challenge such lawsuits on their merits.
Chuck Nicol, Assembly Committee on Appropriations analysis
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She referred to the Americans with Disabilities Act, which requires that businesses accommodate disabled customers. Critics say it’s used in concert with California law to extort payouts from bewildered companies without helping the disabled much.
SB 269 would give businesses with less than 50 employees 120 days to make minor repairs when facing lawsuits alleging, for example, that the color of parking lot striping or signs is slightly off or faded, allowing companies to avoid what Galgiani calls “exorbitant damages.” Such lawsuits typically seek $4,000 for each violation detected.
This goes a long way to ensure that businesses which have intent of complying, but didn’t get a 100 percent perfect A score, are protected.
Sen. Cathleen Galgiani
Running a business in California “is not an easy task,” said Assemblywoman Kristin Olsen, R-Riverbank, “especially when broken and abused state laws make them vulnerable to predatory lawsuits.”
Legislative analyses have quoted from 2014 special reports by The Modesto Bee and Merced Sun-Star, which jointly investigated a wave of legal challenges washing over the Northern San Joaquin Valley. More than 60 businesses in Stanislaus and Merced counties were slapped with lawsuits, and some, including Ripon’s Barnwood Restaurant and Ming’s in Los Banos, closed rather than fight in court or buckle to settlement demands for tens of thousands of dollars.
Last year, Galgiani, Olsen and Assemblyman Adam Gray, D-Merced, all introduced ADA reform bills with broad “right to cure” provisions giving businesses time to fix violations. Facing stiff opposition, Gray and Galgiani withdrew theirs; the Legislature eventually passed a version of Olsen’s after it was watered down, but Gov. Jerry Brown vetoed it in October because it contained a $250 tax credit for businesses making improvements.
Brown also vetoed another containing a tax credit that was nearly identical to this year’s SB 269. The offending provision was removed and it received unanimous support April 21 on the Assembly floor with a 79-0 vote, followed Monday by a 38-0 Senate vote.
Hopefully we’ll keep working on it and get more done.
Assemblyman Adam Gray
“This is kind of a baby step in the right direction,” Gray said. “Obviously I’d like to see a lot more done. But this is the first change we’ve had in quite some time ... and it does provide an avenue to try avoiding some costs of litigation.”
The latest analysis of SB 269 said two law firms filed 54 percent of ADA complaints in California from 2012 to 2014, many targeting small-business owners “without the financial resources and sophistication to challenge such lawsuits.”
The three legislators urged Brown to sign the bill, as did Kim Stone, president of the Civil Justice Association of California, whose group continues to lobby for more substantive ADA reform.
“Until we get that,” she said, “this bill is certainly a step in the right direction.”
Garth Stapley: 209-578-2390