Senator Hannah-Beth Jackson, Chair

AB1521(Author:Committee on Judiciary)

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SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2015-2016 Regular Session

Bill No: AB1521 (Author:Committee on Judiciary)

Version: August 17, 2015

Hearing Date: Aug 25, 2015

Fiscal: Yes

Urgency: Yes

Consultant: NR

SUBJECT

Disability access: construction-related accessibility claims

DESCRIPTION

This bill would make various changes to the law as it pertains to construction-related accessibility claims including:

requiring a high frequency litigant, as defined, to include additional information in a complaint and pay $1,000 in addition to the filing fee, as specified;
requiring the existing advisory, which must be provided to a defendant with each demand letter or complaint, to include additional information regarding the rights and obligations of business owners and commercial tenants, as specified;
requiring an attorney to provide a defendant or potential defendant with an answer form developed by the Judicial Council, which would allow a defendant to respond in the event a complaint is filed, as specified;
requiring, if requested by the defendant,the court to order the parties and their counsel to meet at the subject premises to jointly inspect the premises, as specified;
requiringproperty owners to indemnify a microbusiness tenant, as defined, from liability arising from any construction-related accessibility claims, as specified; and
specifying that attorneys and/or plaintiffs must certify that specified conditions have been met, including, but not limited to, that the action is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay, as specified.

BACKGROUND

Since 1969, persons with disabilities have enjoyed protection under Civil Code

Sections 54 and 54.1, which entitle individuals with disabilities and medical conditions to full and free access to and use of roadways, sidewalks, buildings and facilities open to the public, hospitals and medical facilities, and housing. After Congress enacted the Americans with Disabilities Act (ADA) in 1990, the state made a violation of the ADA also a violation of Section 54 or 54.1. The state protections provided to disabled persons are comparatively higher than those provided under the ADA and are independent of the ADA.

Additionally, under the Unruh Civil Rights Act, all persons, regardless of sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation are entitled to full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever. (Civil Code Sec. 51.) A violation of the ADA also constitutes a violation of Section 51. A violation of that section subjects a person to actual damages incurred by an injured party, plus treble actual damages, but in no event less than $4,000, and any attorney’s fees as the court may determine to be proper. (Civil Code Sec. 52.)

The California Legislature has taken further steps to ensure disability access laws are complied with. SB 262 (Kuehl, Chapter 872, Statutes of 2003) established in the Division of the State Architect, a voluntary “access specialist certification program” in order to assist business and property owners in complying with ADA and state access laws. In 2003 and 2005, several bills were introduced after multiple lawsuits were filed in state court by a few plaintiffs and attorneys against business owners and operators for allegedly technical violations of the state’s access or ADA regulations. (SB 69 (Oller, 2003), AB 209 (Leslie, 2003), AB 20 (Leslie, 2005), SB 855 (Poochigian, 2005).) Three of those bills would have required a plaintiff to undertake prelitigation steps prior to the filing of a complaint, including providing notice to the owner of the property or business of the alleged violations, and provided a specified time period for the owner or business to cure the violations. One bill, (AB 20, Leslie, 2005) would have precluded an action for damages for a de minimus violation, allowing only injunctive relief and attorney’s fees. All of those bills failed passage in the Judiciary Committees of their respective houses.

In 2008, two bills were introduced relating to disability access. AB 2533 (Keene, 2008) and SB 1766 (McClintock, 2008) would have both imposed prelitigation hurdles on plaintiffs claiming violations of construction-related disability access laws. Both of these bills failed in the Judiciary Committees of their respective houses. In 2011, SB 783 (Dutton, 2011) would have established notice requirements for an aggrieved party to follow before he or she can bring a disability access suit and given the business owner a 120-day time period to remedy the violation. That bill failed passage in this Committee.

Alternatively, SB 1608 (Corbett et al., Ch. 549, Stats. 2008), which took effect January 1, 2009, did not create any pre-litigation hurdles for a person with a disability but instead, among other things, provided for an early evaluation of a filed complaint if the defendant is a qualified defendant who had the identified place of public accommodation inspected and determined to meet applicable physical access standards by a state Certified Access Specialist (CASp) prior to the filing of the complaint.

In 2012, Senators Steinberg and Dutton authored SB 1186 (Ch. 383, Stats. 2012) which sought to comprehensively address continued issues with disability litigation. SB 1186 created a number of protections for small businesses and defendants who had, prior to a claim being filed, sought out a CASp inspection. These protections included reduced minimum statutory damages, early evaluation conferences, and mandatory stays of court proceedings while the violations were corrected. That bill also prevented the stacking of multiple claims to increase damages, banned pre-litigation demands for money, and increased data collection regarding alleged access violations.

Subsequently, data collected by the California Commission on Disability Access indicated that of the 5,392 access-related complaints filed between September 2012 and October 2014, 54 percent of the cases were filed by two law firms, and 14 plaintiffs were involved in 46 percent of the cases. Accordingly, this bill seeks to further limit the practice of high-volume lawsuits by, among other provisions, placing additional procedural requirements on high frequency litigants and attorneys.

CHANGES TO EXISTING LAW

Existing federal law, the Americans with Disabilities Act (ADA), provides that no individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases, or leases to, or operates a place of public accommodation. (42 U.S.C. Sec. 12182.)

Existing law, the Unruh Civil Rights Act, declares that all persons, regardless of sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever. (Civ. Code Sec. 51 et seq.)

Existing law requires that an attorney who provides a demand letter must do the following:

include the attorney’s State Bar license number in the demand letter; and
provide a copy of the demand letter to the State Bar and the California Commission on Disability Access. (Civ. Code Sec. 55.32(a) and (b), repealed January 1, 2016.)

Existing law provides that statutory damages may be recovered in a construction-related accessibility claim only if a violation or violations of one or more construction-related accessibility standards denied the plaintiff full and equal access to the place of public accommodation on a particular occasion, by personally encountering the violation or being deterred from accessing the public accommodation on a particular occasion. (Civ. Code Sec. 55.56.)

Existing law requires a plaintiff in a construction-related accessibility claim to state facts sufficient to allow a reasonable person to identify the basis of the violation or violations supporting the claim, includinga plain language explanation of the specific access barrier or barriers the individual encountered, the location of the barrier, how the barrier denied the individual access, and the day or dates on which the plaintiff was deterred. (Code Civ. Proc. Sec. 425.50.)

Existing law reduces a defendant’s minimum liability for statutory damages in a construction-related accessibility claim against a place of public accommodation to $1,000 for each unintentional offense if the defendant has had a CASp inspection, or occupies a building constructed after 2008, and corrected all construction-related violations that are the basis of the claim within 60 days of being served with the complaint. (Civ. Code Sec. 55.56(f)(1).)

Existing law reduces a defendant’s minimum liability for statutory damages to $2,000 for each unintentional offense if the defendant has corrected all construction-related violations that are the basis of the claim within 30 days of being served with the complaint and the defendant is a small business, defined as less than $3.5 million in gross receipts and 25 or fewer employees, on average, over the past three years. (Civ. Code Sec. 55.56(f)(2).)

This bill would additionally require that any complaint filed by a high frequency litigant state the following:

that the complaint is filed by, or on behalf of, a high-frequency litigant.
the number of complaints alleging a construction-related accessibility claim that the high-frequency litigant has filed during the past 12 months, as specified;
the reason the individual was in the geographic area of the defendant’s business, as specified; and
the reason why the individual desired to access the defendant’s business, including the specific commercial, business, personal, social, leisure, recreational, or other purpose, as specified.

This bill would require that any complaint alleging a construction-related accessibility violation be signed by the attorney of record, or party if the plaintiff is representing himself, and that the signature certifies the following:

it is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
the claims, defenses, and other legal contentions therein are warranted by existing law;
the allegations and other factual contentions have evidentiary support, as specified; and
the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.

This bill would state that a court may, after notice and a reasonable opportunity to respond, impose sanctions on an attorney for violation of the above requirements.

Existing law requires that a written advisory, with information about state access laws, be provided by an attorney to the defendant along with the initial demand letter or complaint. (Civ. Code Secs. 55.3 and 55.54)

Existing law provides that upon being served with a complaint asserting a construction-related accessibility claim, a defendant may move for a 90-day stay and early evaluation conference if the defendant is:

until January 1, 2018, a defendant whose site was approved pursuant to the local building permit and inspection process after January 1, 2008, and the defendant declares that all violations have been corrected, or will be corrected within 60 days of being served the complaint;
a defendant whose site had new construction or improvement that was approved by a local public building department inspector who is a CASp and the defendant declares that all violations have been corrected, or will be corrected within 60 days of being served the complaint; or
a defendant who is a small business, as described, and the process and the defendant declares that all violations have been corrected, or will be corrected within 30 days of being served the complaint. (Civ. Code Sec. 55.54.)

This bill would revise the written advisory to include additional information about liability allocation for construction-related accessibility claims, and state that some defendants may be able to reduce damages.

This bill would require the Judicial Council, on or before July 1, 2016, to develop a form for defendant businesses to respond to a complaint alleging a construction-related accessibility violation which includes the following information:

space for specific denials of the allegations in the complaint, including whether the plaintiff has demonstrated that he or she was denied full and equal access to the place of public accommodation on a particular occasion;
space for potential affirmative defenses available to the defendant, including an assertion that the defendant’s landlord is responsible;
any request to meet in person at the subject premises;
whether the defendant qualifies for reduced damages; and
instructions to a defendant who wishes to file the form as an answer to the complaint.

This bill would additionally allow a defendant business who has been served with a complaint by a high frequency litigant to request for a court stay and early evaluation conference.

This bill would require the court to order, upon a defendant’s request, the parties and their counsel to meet at the subject premises to jointly inspect the premises and review any issues that are claimed to constitute a violation of a construction-related accessibility standard. This bill would authorize the court to excuse a plaintiff who is unable, for good cause, to meet in person at the subject premises to be excused from participating in a site visit, as specified.

This bill would define a high frequency litigant as:

a plaintiff who has filed 10 or more complaints alleging a construction-related accessibility violation within the 12-month period immediately preceding the filing of the current complaint alleging a construction-related accessibility violation; or
an attorney who has represented 10 or more plaintiffs who were high-frequency litigants at the time when complaints alleging construction-related accessibility violations were filed on their behalf within the 12-month period immediately preceding the filing of the current complaint alleging a construction-related accessibility violation.

This bill makes various findings anddeclarations including:

a very small number of plaintiffs have filed a disproportionately large number of the construction-related accessibility claims in the state, from 70 to 300 lawsuits each year;
these lawsuits are frequently filed against small businesses on the basis of boilerplate complaints, apparently seeking quick cash settlements rather than correction of the accessibility violation; and
this practice unfairly taints the reputation of other innocent disabled consumers who are merely trying to go about their daily lives accessing public accommodations as they are entitled to have full and equal access under the state’s Unruh Civil Rights Act.

This bill would requirea high frequency litigant to pay $1000, in addition to the first filing fee, to be divided evenly between the trial court trust fund and the General Fund for use, as specified, by the California Commission on Disability Access.

COMMENT

Stated need for the bill

According to the author:

California has approximately 3.3 million small businesses. According to data compiled by the Commission, from January 2014 until January 2015, 3,468 demand letters and complaints were filed in the state. This means that less than one percent of small businesses (and a far smaller percentage of all businesses) were sued in 2014 for violations of construction-related accessibility standards.

Nevertheless, some of the information reported to the Commission is alarming in terms of the number and frequency of construction-related accessibility lawsuits being filed by a small number of law firms in California. According to the Commission, between September 2012 and October 2014, 5,392 complaints (including demand letters) were filed (in both state and federal courts). More than half (54 percent) of the complaints were filed by just two law firms. Forty-six percent of all complaints were filed by just 14 parties. These figures indicate that the vast majority of the construction-related accessibility lawsuits filed in this state are filed by a very small number of plaintiffs and their attorneys.

AB 1521 seeks to limit the practice of high-volume lawsuits motivated by the goal of obtaining quick settlements with business owners, rather than correcting violations of construction-related accessibility standards.

High frequency litigants

This bill would impose additional procedural requirements on “high frequency litigants (HFL),” definedas a plaintiff whohas filed 10 or more complaints alleging a construction-related accessibility violation within the past 12 months, or an attorney who has represented 10 or more HFL plaintiffs in the 12 months immediately preceding the filing of the current complaint alleging a construction-related accessibility violation. The Consumer Attorneys of California (CAOC) write in support:

We are working in good faith to find a solution that both enhances disability access compliance, yet stops the abusive practices of some attorneys who are suing small businesses for fees, not compliance. We think the practices of these few attorneys and plaintiffs who seek fees and not correction are wrong and are an affront to people with disabilities and the laws this state has enacted to protect the civil rights of those with disabilities.

By placing new requirements on disabled litigants, this bill raises the policy question of whetheradditional burdens should be imposed on one class of plaintiff because of the sheer volume of cases they file, without regard to the merits of each case or legitimacy of the allegations. As discussed below, those additional burdens would require only disabled plaintiffs(and their attorneys) to comply with 1) a heightened pleading standard, 2) a higher filing fee, and 3) a subject premises visit at the request of a defendant.

Heightened pleading standard

This bill would require an HFLto identify himself or herself as an HFL and to provide specific information in a complaint including the number of complaints alleging a construction-related accessibility violation that the plaintiff has filed during the past 12 months, the reason the individual was in the geographic area of the defendant’s business, and the reason why the individual desired to access the defendant’s business.

As a general rule, information that lacks the ability to prove or disprove an element of a claim lacks relevance and is inadmissible. Relevant information that has the potential to prejudice the trier of fact, be it a judge or jury, is excluded if its probative value is outweighed by the prejudicial effect. With regard to construction-related accessibility violations, a plaintiff is required to prove that he or she encountered an access barrier or was deterred by an access barrier. Accordingly, this bill would appear to require information be provided in the complaint that may not otherwise be admissible because it may not prove or disprove an element of the claim.