On January 13, 2009, the U.S. Attorney for the Southern District of New York sued five Manhattan hotels for violations of the Americans with Disabilities Act (ADA). While the lawsuits appear to be the culmination of a compliance review initiated in 2005 involving approximately 50 Theater District hotels (a review that has otherwise resulted in 15 final and 29 pending “voluntary compliance agreements” between various hotels and the U.S. Attorney’s Office), the timing of these suits serves as a conspicuous reminder that, despite frozen credit markets, a stalled economy and near-term tepid forecasts for the hospitality industry, ADA enforcement will likely continue unabated. As such, significant ADA developments occurring in 2008 deserve close attention as 2009 unfolds.  

Background  

The ADA, enacted in 1990, broadly protects the rights of individuals with disabilities in regard to employment, access to services, transportation and access to facilities. Specifically, Title III of the ADA requires that privately owned “public accommodations” (including inns, motels and hotels) shall be readily accessible to and usable by individuals with disabilities. The ADA is applicable to (1) newly constructed facilities, (2) newly altered facilities (in regard to the elements subject to alteration), and (3) existing facilities (by mandating “barrier removal” and physical alterations to improve accessibility to the extent the alterations are “readily achievable”). Guidelines for applying the ADA’s Title III requirements to newly constructed or newly altered facilities were adopted by regulation in 1991 at 28 CFR Part 36, and these “1991 Standards” have been the basis for ADA enforcement since that time. The U.S. Department of Justice (DOJ) has used its discretion to enforce barrier removal in existing facilities without additional guidance from legally adopted regulations.  

In 2004, the federal Architectural and Transportation Barriers and Compliance Board published the Americans With Disabilities Act and Architectural Barriers Act Accessibility Guidelines (2004 ADAAG). The Department of Justice has relied on the 2004 ADAAG for guidance, but otherwise these guidelines have not been a legally enforceable supplement to the 1991 Standards.  

Proposed Changes to ADA Regulations

In June 2008, the DOJ published a notice of proposed rulemaking (NPRM) in the Federal Register, the final step prior to updating or enacting a new regulation. Along with the 2008 NPRM, the DOJ issued a Regulatory Impact Analysis, an economic cost-benefit analysis related to the likely impact of the adoption of the proposed rule on affected private entities. A public comment period followed the 2008 NPRM (expiring in August 2008), and the DOJ is ostensibly in the process of determining the contours of the final rule, which has not yet been adopted.  

Physical Alterations to Places of Public Accommodation

The imposition of additional requirements on private owners and operators of places of public accommodation could create a significant cost burden for the hospitality industry. The 2008 NPRM essentially proposes to update the 1991 Standards by adopting the 2004 ADAAG as a legally enforceable federal regulation. By adopting the new regulation, the DOJ hopes to (1) make the ADA regulations more consistent with current building codes (substantial portions of the 2006 International Building Code, which has been adopted at least in modified form in many jurisdictions, are based on the 2004 ADAAG); (2) eliminate ambiguity in the regulations (for example, the regulations will include a definition of “place of lodging” that will unequivocally extend the regulations to rental accommodations in time-shares, condominium hotels, mixed-use hotels and corporate hotels); and (3) substantively impose additional requirements that may not be adequately covered by the 1991 Standards.  

The DOJ notes in the 2008 NPRM that the marginal cost of ADA imposed regulations on newly constructed facilities is largely negligible, as designing improvements to ADA standards from the outset would not impose significant additional costs. The costs related to performing alterations in compliance with ADA standards is highly variable and completely dependent on the nature of the alterations performed. The costs related to “barrier removal” in existing facilities, however, are relatively ascertainable and potentially extraordinary. The Department’s Regulatory Impact Analysis does not in all cases break out its cost estimates along the “new construction,” “alterations” or “barrier removal in existing facilities” paradigms, but the analysis does indicate that the three highest estimated costs that may be borne by inns, motels and hotels are related to: (1) water closet clearance in single-user toilet rooms—out swinging doors, side reach requirements, and guest room vanities (Inns); (2) accessible means of entries for pools, water closet clearance in single-user toilet rooms—out swinging doors, and guest room vanities (Motels); and (3) accessible means of entries for pools, water closet clearance in single-user toilet rooms—out swinging doors, and stairs (Hotels). The DOJ estimates that the total collective cost that may be incurred by inns, motels and hotels as a result of the adoption of the 2008 NPRM would be $314 million.  

The 2008 NPRM is not entirely punitive to the hospitality industry. The DOJ anticipates (but does not promise) adopting a “safe harbor” for existing facilities in compliance with the 1991 Standards (the Department’s estimated cost figures noted above are estimates of the costs incurred assuming the 1991 safe harbor is implemented). Additionally, barrier removal in existing facilities, as now, will be governed by the standard of what is “readily achievable.” The DOJ currently evaluates whether an ADA mandate for barrier removal is “readily achievable” on a discretionary basis, and the proposed new standards will more clearly delineate what is meant by “readily achievable.” The analysis is largely focused on the economic resources of the owners and operators of the facilities. The current economic environment may in fact stall ADA progress in regard to barrier removal in existing facilities, as reduced cash flow throughout the industry would likely prohibit most changes from qualifying as “readily achievable” for the near and intermediate future. Even so, it will be important to monitor the contours and requirements of the new regulations once they are adopted as final rule.  

Modifications to Polices, Practices and Procedures

In addition to physical alterations, the 2008 NPRM addresses new policies, practices and procedures to be utilized by places of public accommodation. Notably, the DOJ intends to enact a regulation addressing the reservation policies of public accommodations on the basis that “individuals with disabilities should be able to reserve hotel rooms with the same efficiency, immediacy, and convenience as those who do not need accessible guest rooms.” The proposed rule is intended to reach any public accommodation that owns, leases (or leases to) or operates a place of lodging. The rule, as contemplated, would require that hotel reservation services (1) identify and describe the accessible features in the hotels and guest rooms and (2) guarantee the availability of accessible rooms that are reserved through the reservation service to the same extent the reservation service guarantees the availability of non-accessible rooms. As of the publication of the 2008 NPRM, the DOJ was continuing to seek feedback as to whether third-party operators of reservation systems should be subject to the proposed regulations.

Due to judicial developments culminating last year, Web sites utilized by places of public accommodation are likely subject to the ADA, so the regulations involving reservations systems that are eventually adopted will almost certainly be applicable to Web-based reservation systems. Prior to 2006, the prevailing law indicated that a place of public accommodation was not required to provide an accessible Web site (e.g., by embedding text reading software that would increase the accessibility of the Web site to the blind), because a Web site was not an extension of a place of “public accommodation” pursuant to the ADA. Access Now, Inc. v. Southwest Airlines, Co., 227 F. Supp. 2d 1312, 1318 (S.D. Fla. 2002). The Access Now court noted, however, that “in light of the rapidly developing technology at issue, and the lack of well-defined standards for bringing a virtually infinite number of Internet websites into compliance with the ADA, a precondition for taking the ADA into ‘virtual’ space is a meaningful input from all interested parties via the legislative process.” Access Now, Inc., 227 F. Supp. 2d at 1321, n. 13. The U.S. District Court, Northern California, decided not to wait on the legislative process and in National Federation of the Blind v. Target Corporation, 452 F. Supp. 2d. 946, 956 (N.D. Cal. 2006), a major retailer’s motion to dismiss a claim based on ADA violations applicable to the retailer’s Web site was denied. A challenge to the plaintiff’s standing to bring the cause of action was denied in 2008, National Federation of the Blind v. Target Corporation, 2008 WL 54377 (N.D. Cal. 2006), and Target settled the case. Although the court never reached a substantive holding on the issue, the foundation has been laid for ADA claims against places of public accommodation that run a Web site that is not ADA compliant.  

Conclusion  

The coming year will hopefully result in greater clarity for the hospitality industry in regard to the ADA, but there will be a cost. Stakeholders should monitor the 2008 NPRM and prepare for the adoption of the final updated regulations. Owners and operators should analyze existing facilities to determine, at a minimum, the degree of compliance with the 1991 Standards. Investments to upgrade and create accessible Web sites will probably be well-spent ounces of prevention. As the recent lawsuits in Manhattan demonstrate, the current macroeconomic environment has not served to deter the Department of Justice from continuing enforcement of the ADA.