ADA lawsuits: Just when you thought it was safe to go back into the parking lot

Over the last few years, a Phoenix lawyer, Peter Strojnik, filed over 1,700 lawsuits in state court against small businesses in Arizona under the Americans with Disabilities Act (ADA) and its Arizona counterpart – almost entirely for alleged problems with handicapped parking spaces and signs. (See our related article, “ADA Violations: What to Do if You Are Sued.”)

While those parking lot actions have been stopped for the moment, two recent developments threaten a new form of disability litigation against small local and out-of-state businesses.

The first development is that Mr. Strojnik is filing a flood of new lawsuits – against hotels – alleging a wide range of ADA violations. He has even filed lawsuits against out-of-state hotels, based solely on the content of the hotels’ websites and of third-party websites such as Expedia.com. He does not even allege that his client ever visited the hotel – rather, he claims that his client was “deterred” from doing so by an alleged lack of information on these websites.

The second development is that this lawyer is trying to restart the parking lot cases in state court, based on a 2017 U.S. Ninth Circuit Court of Appeals decision that he believes allows him to set aside the dismissal of those lawsuits.

The renewed litigation resulting from these developments could prove very costly to small businesses.

Prior Parking Lot Lawsuits. The prior lawsuits were filed in state court against over 1,700 businesses on behalf of an individual named David Ritzenthaler and an organization named Advocates for Individuals with Disabilities (AID).

Those suits alleged that parking lot signs and markings did not comply with the ADA and, by extension, Arizona disability laws. Numerous reports indicated that the property owners received a form settlement letter demanding $7,500, much of which supposedly represented attorneys’ fees incurred to investigate the alleged violations and draft the lawsuit. (Attorneys’ fees are often recoverable in disability cases.)

But the lawsuits were copied word for word from the same template, casting doubt on the notion that the plaintiffs could have incurred thousands of dollars in attorneys’ fees merely for filing the same cookie-cutter complaint.

The parking lot ADA cases garnered a great deal of scrutiny in the media and elsewhere, which ultimately led to action by the Arizona legislature and Attorney General’s Office that put a halt to these parking lot cases, for now.

Changes in State Law Affect Parking Lot Cases. The first blow to the serial filings was a change in Arizona law. In response to the wave of parking lot lawsuits, the legislature amended Arizona’s disability laws to require plaintiffs, before filing suit, to give defendants notice and an opportunity to cure any alleged violations of the state law. This seemingly innocuous requirement destroyed the ability to file a disability lawsuit in state court without warning and demanding a large amount of attorneys’ fees. Hence, in lawsuits filed in federal court, Mr. Strojnik characterized this statutory change as “completely neuter[ing]” the state disability statutes.

Arizona Attorney General Takes Action. The second blow was action by the Arizona Attorney General’s Office. The AG’s Office successfully consolidated the 1,700 state court parking lot cases and obtained dismissal of them for lack of standing, because there was no evidence that the plaintiffs actually encountered the alleged barrier to access (e.g., a too-low parking lot sign or a misplaced access ramp).

In late 2017, as part of a deal to avoid sanctions, the plaintiffs and their lawyer in those cases agreed not to file any more lawsuits in state court for violations of state or federal disability laws. But this agreement is in jeopardy.

Parking Lot Plaintiffs Seek to Undo Dismissals. In January 2018, the parking lot plaintiffs filed motions to try to set aside the judgments of dismissal. They argue that an August 2017 U.S. Ninth Circuit Court of Appeals decision changed the law on standing, such that the April 2017 dismissal of their lawsuits should be set aside. The AG’s Office contends that the filing of those motions violated the 2017 settlement by the parking lot plaintiffs.

At the time of this writing, this matter was being litigated. If the parking lot plaintiffs succeed, they not only will be able to set aside prior dismissals but could be free to file more parking lot cases.

New Lawsuits Filed Against Hotels in Federal Court by Two New Plaintiffs. Starting around July 2017, a new batch of disability lawsuits were filed by Mr. Strojnik on behalf of a different plaintiff, Fernando Gastelum. The lawsuits were filed against Phoenix-area hotels, almost all of which are locally owned franchises of national hotel chains. As with the parking lot lawsuits, the complaints in the new actions are cookie-cutter pleadings, employing dozens of identically worded allegations.

Mr. Gastelum’s lawsuits allege that he visited Expedia.com and the hotel chain’s website and that neither website describe the hotel and any handicapped-accessible rooms “in enough detail to reasonably permit Plaintiff to assess independently whether Defendant’s hotel and guest rooms meets his accessibility needs.” (Notably, none of these lawsuits have yet named Expedia as a defendant.)

Although not referenced in the complaint, the quoted phrase is taken from federal regulations that apply to hotels. Specifically, 28 C.F.R. § 36.302(e)(1)(ii) requires that places of lodging “[i]dentify and describe accessible features in the hotels and guest rooms offered through its reservations service in enough detail to reasonably permit individuals with disabilities to assess independently whether a given hotel or guest room meets his or her accessibility needs.”

Mr. Gastelum alleges that this regulation required the websites to provide specific disclosures on 33 separate categories of accessibility features. The list of features is identical in every lawsuit.

Mr. Gastelum then alleges that he visited the hotel to determine whether it met his accessibility needs and found various shortcomings in the parking lot and often inside the hotel as well. He alleges claims under the ADA (but not under its Arizona counterpart), as well as common-law theories such as negligence and fraud. At this time, about one hundred of these suits have been filed. Many have been settled, but some are being actively litigated.

Out-of-State Hotels Sued for Alleged Website Violations. On behalf of a different plaintiff (Angelica Damiano, Mr. Gastelum’s sister), Mr. Strojnik has sued three hotels in Gallup, New Mexico. Those lawsuits allege only that the Expedia and hotel chain websites violate the ADA; no violations at the hotels themselves are alleged. However, from our experience we believe that the intent of the suits is to force the defendants to conduct their own investigations of their hotels and then report their own violations (if any), which would then presumably be added to the lawsuit.

What You Can Do. By far, the most important thing a business can do is immediately bring its parking lot into compliance with the most recent standards, the 2010 ADA Standards for Accessible Design (“2010 Standards”). Depending on what work has been done to the property after the March 15, 2012, effective date of the 2010 Standards, the standards may not technically apply. However, so far, each lawsuit assumes that the property is covered by the 2010 Standards. Therefore, if one of the plaintiffs or their investigators visits your parking lot, you will very likely be sued for any perceived violation of the 2010 Standards.

One quick item you can check is the height of the handicapped parking signs. If the bottom of these signs is not at least 60 inches above the ground, that is a violation of the 2010 Standards and shows that the parking lot was not designed to comply with the 2010 Standards.

Hotels face unique challenges from these lawsuits. Typically, the franchise owner has little if any control over the information presented on third-party websites or on the hotel chain website. But this fact has not prevented the franchise owners from being sued for those websites’ alleged deficiencies.

Many legal defenses exist to these claims, including the requirement that the plaintiff intends to return to the property in question. Out-of-state property owners sued in Arizona can also raise jurisdiction defenses.

You should also check your insurance coverages. Some business owners have had some success in tendering their defense to their insurance company. Coverage will depend on your policy terms as well as on how your particular insurer views these suits.

Our office has defended a property owner sued for alleged ADA violations and has been monitoring the progress of these actions. If your hotel has been sued by one of the serial plaintiffs associated with these disability lawsuits, I invite you to call me, at no charge, to discuss your options. We also can discuss bringing your property into compliance with the ADA requirements, whether or not you have been sued.