New State Legislation Offers Protection to Small Businesses From Predatory Disabled Access Lawsuits

New State Legislation Offers Protection to
Small Businesses From Predatory Disabled Access Lawsuits

By Dennis C. Huie and David E. Aron

The Governor recently signed into law SB 269, which amends the state disability access statutes to protect small business owners from “highly litigious plaintiffs and attorneys” that are using lawsuits to “obtain quick cash settlements.” The following provides a summary of SB 269.

• What does SB 269 do for small businesses?

For businesses with 25 employees or less (with gross annual receipts of less than $3.5 million): SB 269 amends California Civil Code § 55.56 to create a presumption that the plaintiff did not experience difficulty, discomfort or embarrassment if the alleged violation he or she encountered constitutes technical violations of the law that were corrected within 15 days after service of the summons and complaint. This presumption affects a plaintiff’s ability to obtain statutory minimum damages, currently set at $4,000.00, if the claim is based solely on a technical violation of the law. Under the new law, the plaintiff bears the burden of proving that he or she indeed experienced, “difficulty, discomfort or embarrassment” as a result of the technical violation. A plaintiff’s failure to meet this burden will preclude the plaintiff from obtaining statutory damages. The technical violations include barriers relating to signage, the color of parking lot striping, and the use of detectable warning surfaces for pedestrian pathways.

For businesses with 50 employees or less: SB 269 grants such businesses temporary immunity from violations that were noted in an inspection report prepared by a certified access specialist (“CASp”) prior to the filing of the claim and corrected within 120 days. The 120 day limit to correct violations is extended to 180 days where a building permit is necessary to complete repairs that cannot be completed within 120 days. Additionally, the inspection must predate the filing of the claim or receipt of a demand letter from the plaintiff and the small business owner must not have had notice of the alleged violation.   Note: in order for this immunity to apply, the structure or area of the alleged violation must have been the subject of an inspection report indicating “CASp determination pending” or “Inspected by a CASp” and the small business must have corrected all violations noted in the inspection report within 120 days of the inspection.

• What does SB 269 NOT do?

This Bill does not affect lawsuits pending prior to May 10, 2016, the effective date of this new legislation.

Even though this Bill makes it more difficult to obtain damages, the Bill does not address attorney’s fees and costs which can be awarded even when there is no damage award. Accordingly, there can still be economic recovery to a plaintiff even if they are unable to establish an award for damages. Attorney’s fees often times drive the bringing of and continuous prosecution of these lawsuits.

Commentary

SB 269 is a good step in the right direction to protect small businesses from predatory disabled access lawsuits. SB 269 will reduce small businesses’ exposure to certain types of accessibility claims and will reward proactive business owners with additional protection under state law. SB 269 may discourage lawsuits from being filed where a claim is based wholly on technical violations. Small business owners would be prudent to get CASp review of their businesses and to make any necessary changes as quickly as reasonably possible. However, it is unlikely SB 269 will impact many other predatory disabled access lawsuits given the limited reach of the new law in addressing other aspects of disabled access laws which continue to provide financial incentives in filing these lawsuits.

How We Can Help Your Company

If you would like to determine whether or how the changes under SB 269 affect you or your litigation, you should contact your attorney, the authors of this article, or the Rogers Joseph O’Donnell attorney with whom you regularly work.

The content of this article is intended to provide a general guide to the subject matter and is not a substitute for legal advice.