ADA violations: What to do if you are sued

UPDATE: On February 17, 2017, a Maricopa County Superior Court judge dismissed as "frivolous" over 1,000 lawsuits filed against Phoenix-area businesses for alleged ADA violations.

Our original August 2016 article follows:

As though making a profit is not difficult enough in normal circumstances, many businesses are seeing a relatively new and growing threat in the form of serial lawsuits alleging violations of the Americans with Disabilities Act (ADA). News reports and public records in Maricopa County show hundreds of lawsuits filed in 2016 alleging that the defendant (usually a property owner) has violated the ADA by failing to have ADA-compliant signs for handicapped parking spaces.

These lawsuits are almost identically worded and are filed by various similarly named “advocacy” groups.[1] (View a typical suit, together with discovery that is also usually served with the suit.) Even though the Arizona Attorney General has moved to intervene in these suits, in order to have them dismissed as groundless and abusive, there is no indication that the suits will abate in the near future.[2]

If you are a property owner, you may ask:

• Is there anything I can do to avoid being targeted by one of these suits?

• If I receive a demand letter, should I simply pay the $7,500 typically demanded in these lawsuits, or should I fight it?

In general, the answers are these:

• Yes, you can take steps now to reduce the chances of falling victim to one of these lawsuits.

• If you are sued by one of the ADA advocacy groups, you should probably fight it.
  

See related article: " ADA Lawsuits: Just When You Thought It was Safe to Go Back into the Parking Lot"

BACKGROUND

Typically, the property owner is sued for technical violations of ADA standards for handicapped parking signs. These signs were often compliant when installed, but are now non-compliant because the standards were changed in 2010.

Specifically, these recent lawsuits allege that the property owner violated the ADA (as well as a similar state statute) by (a) not placing its handicapped parking signs at a sufficient height and (b) not indicating that certain spaces are “van accessible.” These specific ADA standards come from a government document, 2010 ADA Standards for Accessible Design.

These lawsuits take advantage of an apparently little-noticed change in the 2002 ADA Accessibility Guidelines that the 2010 Standards replaced. Under the 2002 guidelines, there was no fixed height for handicapped parking signs. Instead, the signs were required to “be located so they cannot be obscured by a vehicle parked in the space.”[3] The same section of the 2002 guidelines also required that the signs be visible to drivers: “Signs designating parking places for disabled people can be seen from a driver's seat if the signs are mounted high enough above the ground and located at the front of a parking space.”

The 2010 ADA Standards, which became mandatory on March 15, 2012, require that handicapped parking spaces be at least 60 inches above the finish floor or ground surface, measured from the bottom of the sign.[4] This change meant that many handicapped parking signs that met the 2002 ADA Guidelines were now in violation of the 2010 ADA Standards. Although property owners can often take advantage of a “grandfather” provision that protects previously compliant signs, such protection evaporates as soon as a property owner re-stripes its parking lot.

NON-COMPLIANCE LAWSUITS

Given this little-noticed technical change, it has been easy for the advocacy groups to find non-compliant signs. Once the signs are identified, a lawsuit is filed (apparently without warning or notice), demanding compliance and seeking attorneys’ fees and costs. The plaintiff group also typically serves discovery, demanding answers to a host of questions about the property owner’s business and practices relating to parking and other accessibility issues.

If the property owner contacts the plaintiff, the typical response is to demand compliance and payment of a significant sum, such as $7,500, as contained in sample complaint linked above. Practical business owners, faced with the choice of litigation or a quick – though pricey – settlement, might opt for settlement, which of course is the likely goal of this batch of lawsuits.

LAWSUIT AVOIDANCE

If you own property with handicapped parking spaces, go to your parking lot and measure the distance between the bottom of the handicapped sign and the ground or floor. Also check to make sure you have at least one van-accessible handicapped space, with a sign to that effect. If the bottom of your sign is less than 60 inches from the floor or ground, or if you do not have a “Van Accessible” sign, you are at great risk of becoming the victim of this recent wave of lawsuits.

FIGHTING THE LAWSUIT

The fact that you might have a non-compliant sign does not mean that you are automatically liable, or that, even if your business is liable, an advocacy group plaintiff actually has a valid claim against you.

Even if you raced out to your parking lot and hired a licensed contractor to bring your signs into compliance, your business may have already been sued. Do not despair, however, because there are a number of defenses to these recent lawsuits.

Fixing the Problem. Your first line of defense is to fix any legitimately identified ADA compliance issues. As noted above, it would not be surprising that your handicapped parking signs are too low. The plaintiff has argued (and will continue to argue) that merely fixing the problems will not make the lawsuit “moot” and therefore subject to dismissal. However, even if not entirely successful, your prompt, good-faith effort at compliance should dramatically reduce your company’s exposure to an award of costs or attorneys’ fees. (The entity plaintiff apparently does not claim actual damages, and the typical individual plaintiff – if one is named – may never have visited your property).

Legal Standing. The second line of defense is to challenge the plaintiff’s standing. Although these plaintiff groups’ strategies are constantly evolving, typically they allege that one of their members is handicapped, visited the property, and intends to visit the property again. If challenged, the plaintiff may have a hard time making that argument stick, especially in light of recent news reports suggesting that the supposedly handicapped individual did not actually have a disability.

Right to Attorneys’ Fees. A third line of defense is to challenge the plaintiff’s right to recover attorneys’ fees. In the current wave of lawsuits, sometimes the plaintiff claims that it is entitled to fees under a state statute that does not apply to cases filed by private individuals.

Insurance Coverage. There is hope that certain insurance policies may cover these ADA claims, both to provide a defense and potentially to cover some or all of any ultimate award. The most promising avenue for coverage appears to be Third Party Coverage under an Employment Practices Liability policy; however, little case law exists on this very new coverage issue, so it is impossible to predict with certainty whether coverage exists.

In any event, if you decide to fight the suit, and if your business is a corporation or an LLC, you must have a lawyer represent the entity in Superior Court. Unless you are an attorney, you cannot represent the company, and, if you try, you are likely to face a default judgment.

CONCLUSION

ADA compliance is important legally, and important to a decent and inclusive society. But laws passed with the best of intentions can be misused, which is what is happening now with these serial lawsuits aimed at unknown and easily corrected violations.

Avoid being a victim of an abusive lawsuit by bringing your parking lot, and the rest of your facility, into ADA compliance as soon as possible. If, despite your best efforts, you are sued by one of these plaintiff groups, do not assume that your only option is to pay an extortionate sum to avoid litigation. Consult a lawyer right away to see what defenses you have, and also to see what options are currently (and may become) available given the recent actions of the Arizona Attorney General’s Office. Finally, notify your insurance carrier immediately after receiving a demand or a lawsuit.