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New ‘fix-it’ bill offers small businesses more protection from ADA lawsuits

ADA Sign Depot

May 26, 2016

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Small businesses protection from ADA lawsuits

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SB 269 will allow businesses with less than 50 employees a grace period to correct “technical violations” before they are subject to statutory damages

A new California law will soon go into effect giving some small business owners time to correct compliance issues under the Americans with Disabilities Act. Lawmakers in Sacramento have finally come to the aid of small business owners targeted by “predatory” ADA lawsuits.

Legislators’ efforts to recognize the problem were rewarded recently when Governor Jerry Brown signed a bi-partisan bill that will allow small businesses more time to fix specified technical violations related to disability access.

Senate Bill 269, authored by Sen. Richard Roth (D-Riverside), falls short of the sweeping reform sought by some lawmakers but does represent a step in the right direction, according to advocates who have been fighting to try to stem the tidal wave of ADA-related lawsuits inundating Golden State courts.

“Small businesses should be spending time and resources providing goods and services … not fighting predatory lawsuits,” said Assemblywoman Kristin Olsen, (R-Riverbank), one of SB 269’s co-authors. For several years, Olsen has been trying to pass legislation that makes it tougher, especially for serial litigants, to file the lawsuits.

Olsen and other supporters of reform argue that for too long now the federal Americans with Disabilities Act has been used in concert with existing California law to “basically extort” payments from small business owners.

“At any given time, there are literally a thousand or two of these lawsuits going through the system in California,” said Julie Griffiths, regional director for California Citizens Against Lawsuit Abuse. “In Fresno, there are at least 50 or 100 at a time, all the time.”

Many of the ADA lawsuits targeting Fresno County businesses are actually brought by individuals living in San Jose, according to Griffiths. “These people have no intention of doing business with these stores or restaurants. Their intention when they walk in the door is to sue them.”

Gas stations along Highway 99 and small retail shops and restaurants around the Valley have been frequent targets of the ADA lawsuits, with plaintiffs claiming signs at those businesses are faded or sinks in restrooms too high to accommodate wheelchair access.

The flood of ADA lawsuits has led to so-called “drive by” litigation, with some business owners reporting those suing them never even step foot on their properties before filing their claims.

Griffiths said those initiating the suits “generally hit little mom-and-pop businesses. They are being filed by the dozens every week in Fresno County. It’s been going on for at least five or six years.”

The lawsuits have forced a number of small business owners around the Valley to close. Many of the businesses targeted “are earning no more than $30,000 to $40,000 a year — and that’s sometimes the entire family income,” Griffiths said.

Now, SB 269 will allow businesses with less than 50 employees a grace period to correct “technical violations” before they are subject to statutory damages.

SB 269 also exempts some technical violations that “are presumed to not cause a person difficulty, discomfort, or embarrassment for the purpose of an award of minimum statutory damage” if they are fixed within 15 days of a complaint.

The new law also gives business owners more time to correct issues like faded or discolored parking lot stripes, misplaced signs and less-than-standard warning surfaces on wheelchair ramps.

But the new law only applies to claims filed on or after May 11, the date SB 269 was signed into law.

Garret Murai, an attorney with an Oakland-based law firm, doubted SB 269 would make much of a dent in the backlog of current ADA lawsuits clogging the state’s courts.

“I recognize this is compromise legislation but I question the extent to which it will actually help curb ADA accessibility abuses in California,” Murai said. He predicted that  “cunning” plaintiffs will find it “easy to plead around” the new provisions.

Citizens Against Lawsuit Abuse will continue its efforts to protect California business owners.

“We are happy that the governor signed this bill. It chips slightly away at the problem,” Griffiths said. “But the thing we’re most excited about is that the Legislature is finally starting to recognize that there is an issue and are doing something to begin addressing it.”

Other applauding SB 269 included Sen. Cathleen Galgiani, D-Manteca, the bill’s principal co-author, and Assemblyman Adam Gray, D-Merced.

Galgiani, Gray and Olsen all introduced ADA reform legislation last year but faced stiff opposition from the trial lawyers lobby. Galgiani and Gray withdrew their bills and Brown vetoed Olsen’s watered-down bill because it contained a $250 tax credit for businesses making improvements.

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