ADA: New Changes for 2013

by Jennifer Schulz

California has seen more than its fair share of lawsuits based on alleged violations of the Americans with Disabilities Act (ADA) and similar state statutes.  Landlords and tenants alike have complained that many of these suits are warrantless, initiated by attorneys and plaintiffs more interested in making a quick dollar than in actually improving access for people with a disability.  The most unscrupulous of these attorneys and plaintiffs visit properties for the sole purpose of uncovering even minor ADA violations, after which an attorney sends a “demand for money” letter threatening a lawsuit unless the landlord or tenant settles with the attorney’s client.  In an attempt to curb these fraudulent practices, California enacted Senate Bill 1168 (signed into law by Governor Brown on September 19, 2012), which imposes new restrictions on ADA claims, reduces statutory damage awards, and creates incentives for landlords to take pre-emptive steps to become aware of access problems and to promptly remedy violations.

Although some ADA claims are made in good faith and are warranted, the cost of litigation and potential damages available under prior laws caused many landlords and tenants to simply settle with all plaintiffs rather than take the risk of challenging the validity of the claims in court.  It has been estimated that in these types of suits that go to trial, damages could exceed $100,000.  Part of the reason for such high awards is that under prior laws, plaintiffs were allowed to receive damages for multiple instances of the same violation, plus attorneys’ fees.

Under the new law, demand for money letters are banned—attorneys may still send letters offering pre-litigation settlement negotiations, but such letters cannot include either a demand for money or an offer to accept money in exchange for not filing suit, and they cannot state any specific amount of potential monetary liability.  Rather, these letters can only include a generic statement advising that the landlord or the tenant may be civilly liable for actual and statutory damages in conjunction with a possible ADA violation.  In addition, all demand letters and complaints must be filed with the California Commission on Disability Access (CCDA).  The CCDA will review the demand letters and complaints and issue reports to the legislature on the types of violations being claimed.  Attorneys also have to send any demand letters to the State Bar of California concurrently with sending a demand letter to a potential defendant, so that the State Bar can determine whether the attorney complied with the requirements of the law.  These new steps should help to reduce the number of unwarranted claims by discouraging attorneys from taking the time and incurring the costs of pursuing an alleged violation unless the claims are valid and supported by evidence of actual ADA violations. Attorneys failing to comply with these new procedures risk disciplinary action.

In addition, demand letters must now identify the alleged violation with sufficient detail to allow a reasonable person to identify the basis for the claim.  This includes: (a) identification of the specific access barrier the individual encountered or by which the individual is allegedly deterred and the location of such barrier, (b) an explanation of how the barrier deterred the individual on each particular occasion, and (c) the date or dates of the encounters.

Attorneys are also required to include an advisory notice with the initial demand letter or complaint sent to a potential defendant.  This notice sets forth the legal obligations and rights of the potential defendant and specifically notifies the potential defendant that any demand letter from an attorney may not make a request or demand for money.

Further, plaintiffs may no longer be able to claim that the same ADA violation occurred on multiple occasions (and thus receive the statutory minimum amount of damages for each instance of the same violation), as courts are now required to consider the reasonableness of the plaintiff’s conduct in light of the plaintiff’s obligation to mitigate his or her damages.  This is aimed at preventing plaintiffs from repeatedly attempting to access the same property with the same barriers solely to increase their statutory damages.  Plaintiffs will now be required to explain to the court why they needed to visit the same business with known barriers to access on multiple occasions.

Finally, SB 1168 reduces the statutory minimum amount of damages—so long as the violations were unintentional, if the defendant has corrected all of the violations that formed the basis of the complaint within 60 days of being served with the complaint and the site was either (i) inspected by a certified access specialist (CASp) prior to the date of the plaintiff’s alleged encounter with the violation, or (ii) the alleged violation pertains to new construction that was approved pursuant to a local building permit and inspection process after January 1, 2008, then the statutory minimum damages are now only $1,000 per violation (reduced from $4,000 per violation).  If the site does not fall under (i) or (ii) above, but the defendant is a small business (i.e. fewer than 25 employees and less than $3.5 million in gross annual receipts) and all violations are corrected within 30 days of being served with the complaint, then the statutory minimum damages are reduced from $4,000 to $2,000 per violation, so long as the violations were unintentional.  It is important to keep in mind, however, that despite the reduction in the statutory minimums, a prevailing plaintiff is still entitled to any actual damages suffered, as well as attorneys’ fees.

In the event you are served with a complaint, you may be able to request a stay of the litigation and an early evaluation conference.  This is available to (1) defendants whose construction was approved pursuant to the local building permit and inspection process after January 1, 2008; (2) defendants whose construction was approved by a local public building department inspector who is a CASp; and (3) defendants who are small businesses, so long as the violations are corrected or will be corrected within 60 days in the case of (1) and (2) above, or 30 days in the case of (3) above.  The stay of litigation will, at least temporarily, halt litigation, which could reduce the amount of attorneys’ fees, and the early evaluation conference gives both parties an opportunity to explore settlement options before proceeding to court.

SB 1168 also imposes a new requirement on landlords: beginning on July 1, 2013, all commercial landlords must disclose in their leases whether the building has been inspected by a CASp and if so, whether the building was determined to meet the ADA and state standards of accessibility.  The law, however, is silent on the consequences of not complying with this requirement.

As both landlords and tenants may be sued for a site’s non-compliance, either may elect to have a CASp inspect their property and determine whether it is in compliance with both the ADA and the state accessibility codes.  If a CASp determines a site is not currently in compliance, their inspection report will identify and describe any areas needing correction.  Once a site has passed a CASp inspection, the disability access inspection certificate may be posted on the property, which could help deter would-be claimants from targeting the property in a potential suit.  A list of CASps can be found on the Division of the State Architect’s website.

Although it is voluntary, having a CASp inspection done is good practice, because if you are sued after your property has had such an inspection, you will be able to request a stay of litigation and an early evaluation conference, as outlined above, which could expedite your case and it may entitle you to the reduced statutory damages set forth above.  Keep in mind, however, that just because you obtain an inspection does not mean that you will be able to recover from the CASp inspector in the event you are sued for a violation. In fact, a court in Nevada recently held that the ADA preempts indemnification and similar claims by a landlord attempting to recover from an accessibility consultant.  That court determined that the purpose of the ADA is to impose liability on owners and operators of public businesses, regardless of who is specifically responsible for any non-compliance, and thus, the ADA does not allow owners and operators to shift liability onto other parties.  It seems likely that this same logic would apply in California and other states.

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