Abusive lawsuits under the Americans with Disabilities Act (ADA) have spread across the country like an infectious disease plaguing small and micro businesses. Although California remains patient zero where the disease constantly mutates, small businesses in Florida, Texas, New York and states in between are now suffering from ADA lawsuit contagion.
The ADA is a phenomenal law, which has opened doors (literally) for persons living with disabilities. Yet, there is a relentless group of personal injury lawyers who view the ADA not as a key to access for those with disabilities, but a tool to line their pockets at the expense of well-meaning small businesses.
ADA lawsuits follow a fairly standard formula. For example, if a sign is slightly askew, a door handle misaligned by 3/8th of an inch, or a disabled parking sign doesn’t properly note the exact amount of a potential parking violation, and a plaintiff’s attorney brings suit, the business pays an average of $16,000 cash. The reason why this is a forced, extorted settlement, is because the cost of fighting the allegation is typically four to five times the average $75,000 in annual income generated by the business. And the trial lawyers know this.
While the stories of ADA lawsuit abuse were once anecdotal in nature, this extortion scheme is now a perfected business plan executed by unethical attorneys. California, home to more than 40% of ADA access lawsuits filed nationwide, has long led the nation in attacks on small business owners. Working out of the cities of San Jose and Fresno, the California-based Moore Law Firm is the embodiment of this type of lawsuit abuse. Over the past few years, they have filed more than 700 lawsuits alleging violations of the ADA, quickly followed by leveraged settlements, and in some cases, bankruptcy by the business. Recently however, they have found the tables turned on them.
In documents filed in state court claiming fraud, details of ADA lawsuit abuse were uncovered. The firm allegedly recruits plaintiffs who suffer both physical and mental disabilities, to act as the injured party of their frivolous lawsuit in exchange for a small portion of the settlement. This came to light as the plaintiffs say they are still owed payouts from numerous settled lawsuits.
Now, faced with the potential of California’s legal gold mine drying up from pending and recently passed legislation, trial lawyers are rushing east to Texas, New York and Florida. Austin experienced an explosion of ADA related lawsuits in 2015, with one attorney filing 25 in a single week. Similar to California, lawsuits in Austin often feature batches of claims from the same plaintiff and attorney. This “lawsuit mill” approach, dozens of cookie-cutter lawsuits with similar language from one firm, is how New York City is being attacked by both out-of-state and in-state lawyers.
Down in the Sunshine State of Florida, lawsuit mills like those in California are churning out up to 20 lawsuits per day. The lawsuits are concentrated in the South Florida counties of Broward, Palm Beach and Miami Dade, where a number of serial filers have been targeting locally owned businesses with allegations of ADA violations. These trends are even beginning to pick up in other states, such as Missouri, so it’s anyone’s guess how far this will go.
One thing is clear: The ADA lawsuit industry is no longer under the radar. With disabled plaintiffs fighting back against unscrupulous lawyers, and small businesses pushing for reform in state capitals, the political dynamics are shifting.
The California Legislature has passed modest ADA reform for a second time in as many years, and at the federal level, there is a bipartisan push to protect both consumers and small business. Two U.S. Representatives from California, Democrat Jerry McNerney and Republican Ken Calvert, have introduced federal legislation to combat job-killing ADA lawsuit abuses. The McNerney (H.R. 4719) and Calvert (H.R. 241) bills are commonsense measures, ones which would require notice and a right to cure before a lawsuit could be filed.
Whether these measures are enough to stop ADA contagion from further infecting our economy remains to be seen.
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