SB 1186 Seeks to Curtail Abusive Litigation and Promote Compliance With Building Accessibility Standards

November 27, 2013

For years, California has been plagued by abusive lawsuits aimed at business establishments for alleged violations of the Americans with Disabilities Act (ADA). On September 19, 2012, California Governor Jerry Brown signed into law, Senate Bill 1186, which is an attempt to curb the abusive lawsuits based on the ADA and related state laws, requiring that places of public accommodation be accessible for persons with disabilities. The law went into effect in January of 2013.

Prior to the Bill's enactment, unscrupulous law firms devised a scheme where they would send disabled clients to as many business establishments as possible until an ADA violation was found. Once a violation was encountered, the disabled clients would repeatedly visit the guilty business establishment to encounter the same accessibility violation. Under California civil rights law, each violation triggers a minimum statutory penalty of $4,000 The law firms would then send to the guilty business establishment/property owner/lessor a "demand for money" letter or the firm would file a lawsuit on behalf of the disabled client, requesting damages for each violation ("stacked claims"). Instead of fighting an expensive legal battle, the business establishment would quickly settle. In one notorious case, an illegal immigrant and convicted felon, who also happens to be a paraplegic, filed over 500 lawsuits against businesses, and earned $165,000 in settlements, for ADA violations.

The Bill has five main provisions. The first and most important provision of the Bill is that it ends "demand for money" letters from attorneys. Attorneys may still send letters to business establishments alerting them of potential violations, but the letter may not include a demand for money. The letter must contain several items, including, identification and location of the alleged violation; an explanation of how the alleged violation interfered with the disabled person's access; and, the date of the alleged violation/interference. The law firm must send a copy of the California State Bar and the California Commission on Disability Access.

Second, under the new law, commercial buildings completed after January 1, 2008, or any California businesses that have received a Certified Access Specialist (CASp) inspection, are given 60 days to fix an alleged ADA violation and their statutory penalty may be reduced from $4,000 to $1,000. Small businesses with fewer than 25 employees that have not had a CASp inspection have 30 days to fix an alleged ADA violation and their statutory penalty may be reduced 50%, from $4,000 to $2,000.

Third, the law requires a commercial property owner or lessor to state on every lease form or rental agreement whether the subject property has undergone a CASp inspection and, if so, whether the property meets or does not meet applicable construction-related accessibility standards.

Fourth, under the new law, judges must evaluate the plaintiff's conduct in connection with "stacked claims" by determining whether the plaintiff acted reasonably in visiting a particular business establishment multiple times despite a known barrier to access.

Finally, the law increases business license fees, in order to help fund the CASp program.

If you are a commercial property owner or lessor, SB 1186 is certainly a step in the right direction; however, it is important that you comply with the provisions applicable to you. If you have questions about how the new law affects you and/or you need assistance complying with the requirements of the new law, an experienced business and real estate lawyer can help you. Contact us today.