On September 19, 2012, Gov. Jerry Brown signed into law Senate Bill 1186, aiming to help California business owners guard against costly, predatory lawsuits filed under the Americans with Disabilities Act (ADA) and corresponding California laws. Effective immediately, the bill is perhaps the most substantive disability access law reform to ever emerge from the California Legislature.
For years, California has been a hotbed for ADA litigation. According to Lawyers Against Lawsuit Abuse, more than 40 percent of all ADA lawsuits in the nation are filed in California, due in large measure to the high statutory damages and exorbitant attorneys’ fees recoverable in the state. While some argue that SB 1186 does not go far enough, supporters are cautiously optimistic that the bill will indeed curb frivolous ADA lawsuits.
Under the new law, attorneys are now barred from sending “demand for money” letters, requesting payment of money in lieu of filing a lawsuit – a common “shakedown” tactic that, frankly, did very little to ensure ADA compliance. SB 1186 also requires attorneys to serve a written advisory upon potential defendants at least 30 days before filing a lawsuit, wherein all construction-related violations are set forth with facts sufficient to allow a reasonable person to identify the basis for the claim. Attorneys must also submit a copy of all demand letters and complaints to the California Commission on Disability Access and to the California State Bar.
For small businesses (defined as having 25 or fewer employees and no more than $3.5 million in gross annual receipts) faced with unintentional, construction-related accessibility violations, SB 1186 reduces the minimum statutory damages from $4,000 to $2,000, as long as the violations are corrected within 30 days of being served with the complaint. These damages may be further reduced, from $4,000 to $1,000 per unintentional violation, if (1) the defendant has corrected all construction-relation violations that are the basis of the claim within 60 days of being served with the complaint; and (2) other specified conditions apply, including (a) the claim pertains to a site that has a Certified Access Specialist (CASp) inspection report, or (b) the claim pertains to a site where new construction or improvement was approved between January 1, 2008 and January 1, 2016 by the local building permit and inspection process.
Moreover, in assessing liability for multiple claims arising from the same construction-related accessibility violation on different particular occasions (known as “stacking”), the court is now required to consider the reasonableness of the plaintiff’s conduct in light of the plaintiff’s obligation to mitigate damages.
SB 1186 also identifies three scenarios in which a defendant may request a stay of litigation and an early evaluation conference: (1) the claim pertains to a site that has a CASp inspection report; (2) the claim pertains to a site where new construction or improvement was approved after January 1, 2008 by the local building permit and inspection process; or (3) the property owner/tenant is a small business.
Finally, the new law mandates that commercial property owners state, on all lease forms or rental agreements executed on or after July 1, 2013, whether the property being leased or rented has undergone inspection by a CASp.
“The whole point of our state and federal disability access laws is to remove barriers for the disabled, giving them full and equal access to businesses like everyone else. Up until now unfortunately, it was often cheaper and quicker for business owners to settle out of court than to remove those obstacles,” said Senate Pro Tem Darrell Steinberg, the author of SB 1186. Recognizing that business owners often want to correct violations and enhance accessibility, Steinberg explained – and most business owners would agree – that SB 1186 represents a compromise that “applies common sense to difficult issues.”