State and federal legislation take new aim at predatory ADA lawsuits

California Assembly Democratic Caucus

The legislative fight against disability-based predatory lawsuits continues on state and national levels with new bills by Democratic Assemblyman Adam Gray and Republican U.S. Rep. Jeff Denham.

Both lawmakers condemn shakedowns of businesses by plaintiffs demanding thousands of dollars to settle lawsuits based on the Americans with Disabilities Act and California laws making such challenges especially lucrative in this state.

“This is totally legalized extortion,” said Gray, of Merced, whose new bill relies on a creative twist that would label professional victims as “extremely high-frequency litigants.” Gray added, “They target small businesses that lack the financial resources to fight in court.”

In a release, Turlock’s Denham said, “It’s a disgrace that the owners and operators of these local businesses are falling victim to predatory lawsuits.”

It is clear from the (California Commission on Disability Access) report that the latest round of reform legislation has failed to achieve a reduction in excessive ADA lawsuits. In particular, the use of ADA lawsuits as a business model through which plaintiffs make a living as professional victims continues to create significant distrust and resentment among California’s business community.

A.B. 913 fact sheet

The issue was spotlighted in an award-winning 2014 series by The Modesto Bee and The Merced Sun-Star that detected more than 60 disability-access lawsuits in Stanislaus and Merced counties. The Bee two weeks ago found that the wave has not abated despite news reports and a rash of attempts at reform in Sacramento, with more than 100 lawsuits launched in this area, most brought by a handful of serial litigants.

Reform legislation typically includes a “right to cure” clause providing businesses with a certain amount of time to correct deficiencies. Several such bills have been carried over the years – including one previously by Gray – but none succeeded. Others by Sen. Cathleen Galgiani of Manteca and former Assemblywoman Kristin Olsen of Riverbank took small steps but stopped short of meaningful reform.

Denham’s H.R. 1493, introduced last week, would give businesses facing an ADA complaint a 120-day grace period – wording similar to previous reform attempts.

This change in law will assure that (small businesses) can increase access to the disabled instead of closing up shop because they’re threatened with costly litigation.

U.S. Rep. Jeff Denham, on H.R. 1493

Some advocates of the disabled say businesses have had 27 years of notice – since the ADA became law. Enforcing its provisions takes courage and helps one of society’s most vulnerable segments enjoy a better quality of life, they contend, and a majority at the Capitol has consistently agreed.

Most plaintiffs, however, do not solely rely on the federal ADA, choosing to also invoke California’s Unruh Civil Rights Act because that allows demands for much more cash. A typical payout can run from $4,000 to $12,000, or more, which some businesses opt to cough up rather than fight costly court battles.

Gray said he pondered the problem and the many failed reform attempts. He said he was struck by a recent report of the California Commission on Disability Access, including a finding that 14 people brought 46 percent of all disability-access lawsuits in California in 2014.

The number of cases filed in rural cities is growing.

California Commission on Disability Access, Jan. 31

“The more you think about it, the more the problem is really right there; it’s that simple,” Gray said. His Assembly Bill 913 would clamp down on frequent filers, defined as those having brought 15 or more disability-access lawsuits in the previous 12 months. Judges would act as gatekeepers, rejecting claims appearing to have no merit.

It’s going to be a small universe of folks preying on small businesses.

Assemblyman Adam Gray, on A.B. 913

“This gets to the root of the problem,” Gray said. “It’s easy to understand, it makes a ton of sense, and it’s hard to argue that this is a nefarious attack on civil rights because it’s not.”

Some plaintiffs who have sued local businesses would fall within Gray’s definition.

For example, Robert McCarthy — an Arizona man previously convicted of child pornography and stealing his dead brother’s identity to obtain food stamps and keep alimony flowing from his ex-wife — has filed more than 400 lawsuits against California businesses, including 91 in the past year. He previously targeted Modesto but has focused on other areas the past two years.

Cynthia Hopson of Lodi has sued 116 businesses in the past few years, including 43 in the Modesto area and nearby. Having filed 30 throughout California in the past year, she also would be deemed an “extremely high-frequency litigant.”

Denham signed on as a cosponsor of H.R. 620 by U.S. Rep. Ted Poe, R-Texas. Like Denham’s bill, it contains a right-to-cure provision.

State Assemblyman Devon Mathis, R-Porterville, also has legislation (A.B. 150) that would give businesses six months to fix access problems before a lawsuit. Sen. Tom Berryhill, R-Twain Harte, is a cosponsor. A critical Assembly committee analysis says no other victim of discrimination is required to notify a violator before claiming damages.

Garth Stapley: 209-578-2390