Federal Court slams abusive ADA lawsuits

On April 16, 2012, an article appeared on the front page of the New York Times about the proliferation of lawsuits brought under the Americans with Disabilities Act (or ADA) against small businesses and portending a wave of cases to come. Indeed, lawyers from Florida and other states have joined forces with local attorneys to file scores of ADA lawsuits against small businesses, many of which are owned by minority entrepreneurs.

On March 28, 2013, a Federal Judge in the Eastern District of New York excoriated plaintiff Mike Costello's attorneys for filing scores of frivolous ADA lawsuits against mom-and-pop businesses over technical or non-existent deviations from the ADA Standards only to line their own pockets. Costello v. Flatman, LLC, 11-CV-287.

Dozens of "boilerplate" ADA lawsuits

In 2011, the plaintiff, Mike Costello, filed a complaint against a Subway franchisee and his landlord under the ADA and state and city New York Human Rights laws. The same day, the plaintiff and his lawyers filed seven other identical ADA lawsuits against small businesses located within a two-block radius of the Subway store. Costello later amended his complaint to bring in another defendant who ignored the lawsuit, resulting in a default being taken. After the Court issued a $14.31 default judgment, plaintiff's counsel filed a motion for fees and litigation costs in the amount of $15,172 supposedly incurred in prosecuting the action. [Note: This is not a typographical error. The damages were fourteen dollars and thirty one cents. The attorneys' fees sought were more than fifteen thousand dollars.]

The Judge noted that in a boilerplate complaint, Costello alleged that he is disabled, required a wheelchair for mobility, and that he visited a Subway restaurant where he encountered various ADA barriers which prevented him from enjoying the goods and services offered at Subway. The plaintiff was represented by two law firms, one from New York the other from Florida. The Court found that together, these attorneys filed dozens of boilerplate ADA lawsuits alleging very similar barriers only to force the defendants to pay money to settle the cases.

Goal of the ADA . . .

The Court noted that the goal of the ADA is to remedy discrimination against individuals with disabilities in employment and full and equal access to the goods and services offered by public accommodations like banks, retail stores, restaurants, hotels, museums, golf courses, and amusement parks. Title III of the ADA requires the removal of structural and programmatic barriers in existing public accommodations "where such removal is readily achievable, and in newly altered or constructed buildings." The ADA defines "readily achievable" barrier removal as "easily accomplishable and able to be carried out without much difficulty or expense."

The ADA contains both a private right of action for individuals and advocacy groups, and a public right of action by the Attorney General. The only remedies for a private individual under the ADA are injunctive relief (barrier removal) and the recovery of attorney's fees and litigation costs. The Department of Justice (DOJ) can also impose fines of $55,000 for the first occurrence and $110, 000 for each subsequent ADA violation.

New York (like California) awards attorneys' fees and damages to plaintiffs

New York, like California and several other states, also permits private plaintiffs to recover damages for ADA violations. (California, for example, permits private plaintiffs to alternatively recover (1) three times actual damages or $4,000 or (2) $1,000 per offense each time the plaintiff visited the business, or knowing of the existence of barriers, was deterred from returning). Costello sued under the ADA, but coupled the federal claim with damage claims available under the New York State Human Rights Laws and The New York City Human Rights Laws.

Appalled at an abusive pattern of litigation

The Court, appalled to find a similar litigation pattern in dozens of lawsuits filed by these attorneys in New York and Florida noted that:

Some plaintiffs and their attorneys have found a way to circumvent the will of Congress by seeking money damages while retaining federal jurisdiction.

In a highly unusual effort, the Judge visited each of the eight small businesses sued by plaintiff and observed that some of the alleged violations were frivolous. In the Subway complaint, plaintiff alleged that the public bathroom was non-compliant. The Judge observed that there was no public bathroom at all.

The Court in an impassioned opinion reduced the attorney's billing rates for filing boilerplate pleadings, found their time entries were excessive (even fictitious) and denied their motion for attorneys' fees and litigation costs.

Plaintiff focused on financial gain rather than the noble intent of the ADA

Considering the spirit and noble intent of the ADA, the Judge commented:

The ADA is a testament to the country's effort to protect some of its most vulnerable citizens. It is one of the most significant federal statutes that was born out of this nation's Civil Rights movement and was enacted to ensure that disabled individuals have equal and safe access to the same benefits and accommodations as every other American. However, a troubling reality is that cases like the one presently before the court have the effect of being less about ensuring access for those with disabilities and more about lining counsel's pockets.

The Court cited a prominent California ADA lawsuit Molski v. Mandarin Touch Rest., 347 F. Supp.2d 860 (C.D.Cal. 2004):

The scheme is simple: an unscrupulous law firm sends a disabled individual to as many businesses as possible, in order to have him aggressively seek out any and all violations of the ADA. Then, rather than simply informing the business of the violations and attempting to remedy the matter through conciliation and voluntary compliance, a lawsuit is filed, requesting damage awards that would put many of the targeted establishments out of business. Faced with the specter of costly litigation and a potentially fatal judgment against them, most businesses quickly settle the matter.

Lawsuits had no effect on ADA accessibility

In Costello v Flatham, the Court analyzed the ADA lawsuits filed by the two lawyers and determined that they had no impact on improving accessibility. Upon visiting each of the businesses named in the other lawsuits, the Court expressed its shock to see most, if not all, of the alleged barriers were still there. The Court did not highlight the existing barriers to invite more ligation against these businesses, but to bring attention to the "troubling litigation tactics" used by these two lawyers.

This is indicative of the mendacious conduct that is central to counsel's litigation scheme.

Plaintiff's attorneys fees denied

In denying plaintiff's fee motion, the Court went out of its way to chastise the plaintiff's attorneys and their inexcusable litigation scheme of preying on small businesses.

Those who take on the honorable cause of representing disabled individuals must recognize that they not only represent their fellow lawyers of the bar, but also the legal giants who paved the way for passage of crucial civil rights legislation like the ADA.

The Court concluded with the thoughts of one such Civil Rights legal giant Charles Hamilton Houston, who famously said "a lawyer is either a social engineer or he's a parasite on society."

The conduct of counsel is indicative of a parasite disguised as a social engineer. It must stop.

The Court intends to report its findings to state bar authorities and to Chief Judges across the country about the attorneys' mendacious litigation tactics if these lawyers continue to litigate in this fashion.