Access Granted

Failure to comply with disability-access codes can bury your business

Back Longreads Oct 1, 2011 By Anne Gonzalez

When it comes to the issue of accessibility, Sacramento businessman Tony Lutfi knows the drill.

The investment group Lutfi heads manages fast food restaurants in four states, and he has been sued six times for failing to comply with the Americans with Disabilities Act (ADA) codes

While he does business in California, Texas, Nevada and Arizona, only one of the restaurants outside this state has been sued for access issues. His noncompliant restaurants have spent more than $1 million on repairs and settlements over the years.

“These plaintiffs and their attorneys are using statutes for financial benefit and getting large sums of money,” Lutfi says. “In the last six or seven years, there’s been an increased effort by a handful of people and attorneys to focus on certain technicalities. They bring a lawsuit with the purpose of making some money, they get a settlement and then move on to the next victim.”

He said surveillance cameras at the restaurants show vans pulling up in the parking lots and unloading able-bodied people who come into the store.
“None of them are disabled. They take pictures and measure,” Lutfi says. The evidence is used in a lawsuit that typically ends in an undisclosed settlement.

Polio survivor Margaret Johnson, on the other hand, has used a wheelchair since she was 4 years old. Today, at age 61, she still battles the effects of the disease every time she tries to use sidewalks, goes to dine-in restaurants or stays in hotels.

“I understand there’s a perception that many (accessibility) lawsuits are unjustified,” she says. “But many times businesses trivialize access requirements. I like to go someplace and know I can park and unload my wheelchair, sit at a table and use the bathroom.”

The two are pretty much at polar ends of the spectrum of a weighty controversy affecting businesses in the state.

Many people have hailed the ADA for removing physical barriers to a growing — and increasingly mobile — disabled population, though others condemn accessibility lawsuits as opportunistic job-killers.

A reform law passed in 2008 has done little to restrain expensive lawsuits, and a state commission formed in 2009 to recommend further reforms has been slow to have an impact, critics say.

Sacramento restaurateur Travis Hausauer, owner of the legendary Squeeze Inn burger joint, has been sued for ADA noncompliance and offers a pointed recommendation for business owners: Get compliant.

Forty-two percent of ADA lawsuits nationwide are filed in California, even though the state makes up only about 12 percent of the nation’s population.

“You don’t want to go to trial,” he says. “You will lose, because the law’s the law. If you hire a lawyer and go to trial, you could spend $100,000 to save $5,000. My advice is to hire a mobility expert and get certified as compliant.”

Federal ADA legislation passed in 1990 prohibits discrimination based on disability, defined as a “physical or mental impairment that substantially limits a major life activity.” The law was enacted to prevent discrimination of disabled people in hiring and employment and in accessing public entities, transportation, commercial businesses and telecommunications.

When it comes to businesses serving disabled customers, the act was designed to allow deaf and blind people and those using wheelchairs to shop, eat, go to movies, ride a bus or stay in lodgings unimpeded. New construction must comply with ADA guidelines, while existing businesses are supposed to upgrade or reconfigure buildings to remove barriers.

Some changes required are minor, such as striping parking spaces or installing grab bars in restrooms. But others can involve expensive structural modifications, many times costing small businesses thousands of dollars to install wheelchair ramps, renovate restrooms, widen doorways or add elevators.

If a business is found to be out of compliance with any of the myriad ADA codes, suit can be filed seeking not only correction of the violation, but damages and attorney fees. Often, business owners settle out of court to avoid trial and potential large judgments against them.

David Warren Peters, CEO and general counsel of San Diego-based Lawyers Against Lawsuit Abuse, says 42 percent of ADA lawsuits nationwide are filed in California, even though the state makes up only about 12 percent of the nation’s population.

Peters says more than 14,000 ADA accessibility lawsuits were filed in California federal courts in the past few years. That doesn’t include a substantial shift in suits being filed in state courts, which are less organized in the way they track such actions, making it difficult to develop reliable statistics, Peters says.

Business groups claim accessibility violations are creating “professional plaintiffs” — plaintiffs and attorneys who file multiple lawsuits throughout the state to collect damages.

Sacramento-based California Citizens Against Law Abuse claims “abusive and predatory” lawsuits are harming businesses in a period of high unemployment and a stalled economy. The ADA was meant to increase access for disabled people, but “a few unscrupulous personal-injury lawyers and professional plaintiffs have made fortunes by targeting businesses for shakedown lawsuits,” a CALA news release states.

The group claims that in many of these lawsuits accessibility improvements aren’t the issue. Instead, the plaintiffs often target small businesses that will quickly settle because of the exorbitant costs of fighting the lawsuit.

Shane Singh, a Sacramento attorney handling ADA cases since 2001, says he has represented businesses in 600 to 700 cases, including larger companies such as Starbuck’s and Payless Shoe Source. Most of those cases have been settled before going to trial, Singh says.

Plaintiffs who sue successfully stand to win awards of $4,000 per violation plus attorney’s fees, Singh says, noting a handful of plaintiff attorneys account for up to 85 percent of the ADA accessibility cases in the Sacramento area.

Singh says many ADA plaintiffs and attorneys write letters to businesses and give them time to make fixes before filing suit, but others serve businesses with legal actions without prior contact.

“It’s sad because a lot of the lawsuits are drive-bys where disabled people will drive by — without even trying to enter — and find a technical violation, maybe a signage problem or the color of paint in a parking space,” Singh said.

Some federal courts, such as those in San Francisco and San Diego, have mandatory mediation programs to resolve cases quickly and efficiently, Singh says. Sacramento courts don’t have that program, so, “If there’s a violation and we want to settle, the first thing I do is engage the clients’ lawyer and offer money and conditions,” Singh says.

Tom Stewart, an attorney in the East Bay city of Clayton, says he has filed more than 500 lawsuits on behalf of disabled clients in the past 11 years. He acknowledges that unethical attorneys take advantage of the system but argues that business owners need to be educated about what constitutes a barrier for a disabled person and be proactive about bringing buildings up to ADA code.

“There are a lot of frivolous lawsuits because people are involved, so you’re going to get all kinds,” Stewart says. “I try not to file lawsuits over trivial violations, but sometimes owners don’t realize what’s a significant barrier. Many of these suits really need to be filed. I had to learn this stuff; if you’re a business person, you need to know your business.”

“I understand there’s a perception that many (accessibility) lawsuits are unjustified. But many times businesses trivialize access requirements.” — Margaret Johnson, chair, California Commission on Disability Access

Unethical and unwarranted lawsuits only hurt the cause, Stewart says, and if the current political climate is allowed to go unchecked, it could spur a backlash.

“I hear about lawsuits (that) I wouldn’t file,” he says. “That makes people mad, so that’s not good for me. And it’s also not good for the cause of barrier removal, because there may be a barrier at a business that’s really hurting disabled people, but a change in the law may preclude suing altogether.”

Stewart screens his clients to be sure they are legally disabled, have been a patron at a particular business and had an issue with access. He starts the legal process by sending a letter to the business owner. About 98 percent of his cases are resolved when he gets an agreement from the owner to correct the violation. Stewart is awarded money for time he has worked, and the plaintiff receives statutory damages, he says.

Violations often are obvious, such as tables of an inappropriate height or the lack of a grab bar in the restroom, Stewart says. Those factors might seem insignificant to able-bodied people, but they can present challenges that would preclude disabled people in wheelchairs from enjoying the establishment.

Margaret Johnson, the polio survivor and wheelchair user, describes some access violations as “appalling.” She has never filed an ADA lawsuit but recognizes the need for legal action to force businesses to respect disabled people’s rights.

“It’s amazing to me what I go through sometimes to be able to be out in public,” Johnson says. She often finds insufficient space around handicapped parking spots to lower her van’s ramp or items placed next to handicapped toilets that make it impossible to back her chair in. “I sometimes have to call for help, and someone comes to help but sometimes there’s some eyeball rolling. It’s embarrassing and humiliating.”

She has repeatedly asked businesses to remove sidewalk signs blocking her way, leading to unhappy responses from shop owners. Her husband takes his toolbox on trips so he can remove doors and cabinetry to make sinks accessible in hotel rooms.
Squeeze Inn owner Travis Hausauer was sued in 2009 for alleged ADA violations.

“I’m not even sure if the plaintiff ever even came to my restaurant,” says Hausauer, whose restaurant was known for its skinny dining room and thick hamburgers. “Basically, they all want money, even though they say they want to correct violations.”

After being sued for unspecified violations at his business on Power Inn Road, Hausauer settled the suit for an undisclosed amount, sunk $250,000 into relocating his diner and emerged as a focal point for ADA compliance issues.

In an effort to curb expensive lawsuits, the state Legislature passed a disability reform law, Senate Bill 1608, in 2008. The California Chamber of Commerce worked with legislators and representatives of the disabled to craft a bipartisan measure in response to ADA lawsuits and the impact on business owners.

The new law was designed to promote compliance in public accommodations and reduce “unwarranted and unnecessary litigation that does not advance the goals of disability access,” a chamber press release states.

Some of the key provisions of the law were crafted to clarify state and federal rules regarding disability discrimination; form the 17-member California Commission on Disability Access to evaluate and recommend further reform, improve education about disability laws for architects and building inspectors; create incentive for building owners to use state-certified access specialists to ensure compliance; and launch a new court procedure for early resolution of disability-access lawsuits.

The measure also says plaintiffs can only sue if they have personally encountered a violation on a particular occasion, rather than for alleged violations that might exist but that didn’t cause a specific denial of access.

It also allows courts to consider reasonable written settlement offers made and rejected along the way, which could change the amount of attorney fees awarded at the conclusion of the case.

But no one knows how many businesses have taken advantage of the reforms or whether it has reduced unwarranted lawsuits. Peters, of Lawyers Against Lawsuit Abuse, says he believes ADA accessibility lawsuits have actually spiked since passage of SB 1608.

Many members of the business community are frustrated by what they see as inaction by the commission that was formed to push for lawsuit reform. The commission hired its first staff member, an executive director, in June. The Squeeze Inn’s Hausauer, now co-chair of CALA, says the commission is having trouble arranging meeting times and establishing a quorum. Johnson chairs the commission and admits the group has done little since being formed in the fall of 2009. It received just $80,000 in funding the first year and now has $450,000, still a shoestring budget for accomplishing its goals.

“The commission was unstaffed for 18 months, and the members are volunteering,” Johnson says. “This was years in the making, and it wasn’t supposed to make an overnight difference. We need time to ramp up.”

Until then, businesses can hire a Certified Access Specialist (CASp) to inspect buildings and identify access problems for upgrades. Singh says tax credits and incentives are available to businesses that get the certification and make renovations.

Hausauer hired a CASp for about $3,000 when he moved his restaurant around the corner into a newer building.

“It will cost you a little money up front but saves you money down the road,” he says. “If you’re proactive, you’re going to be in good shape. And, in the end, you will get everyone in the door that you can, increasing your customer base.”

Lutfi says the restaurants he represents — Arby’s, Church’s Chicken, Jack in the Box and Little Caesars Pizza — serve handicapped customers on a daily basis.

“It would be fair to say, with the type of restaurants we have, there’s not a day where we don’t have a disabled person come in, some with wheelchairs,” he says. “I can’t tell you the number of letters we get from disabled people saying they feel comfortable and accommodated.”

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