Seyfarth Synopsis: With the recent proliferation of web accessibility demand letters and lawsuits, businesses often ask whether settling a claim with one plaintiff will bar future lawsuits brought by different plaintiffs. One federal judge recently said no.
Plaintiffs Rachel Gniewskowski, R. David New, and Access Now, Inc.—represented by Carlson, Lynch, Kilpela & Sweet—sued retailer Party City in the Western District of Pennsylvania on September 6, 2016, alleging that Party City’s website is not accessible to visually impaired consumers in violation of Title III of the Americans with Disabilities Act (“ADA”). On October 7, 2016 (while the Pennsylvania lawsuit was pending), Party City entered into a confidential settlement agreement with Andres Gomez, who had previously filed a similar lawsuit in Florida. Both lawsuits contained the same basic set of facts and legal claims, and sought similar relief—modification of the website to make it accessible to, and useable by, individuals with disabilities.
Party City filed a summary judgment motion in the Pennsylvania case, arguing that the Pennsylvania case was barred by the prior settlement under principles of res judicata. Res judicata applies when three circumstances are present: (1) a final judgment on the merits in a prior suit involving (2) the same parties or their privies, and (3) a subsequent suit based on the same cause of action. In an order issued on January 27, 2017, the court denied the motion, finding that Party City could not establish the second element.
In its attempt to establish the second element, Party City argued that the Pennsylvania plaintiffs Gniewskowski and New were “adequately represented” in the Florida action by Gomez. The Court disagreed, finding Gomez did not purport to represent Gniewskowski or New, noting that the “complaint in Gomez’s lawsuit made clear that Gomez brought his lawsuit ‘individually.’” Nor could Party City “point to any ‘procedural protections…in the original action’ that were intended to protect the current plaintiffs’ rights to due process”, such as notice of the prior settlement, or measures the court in the prior litigation took to determine whether the settlement was fair as to absent parties.
The court’s straightforward application of res judicata principles is not surprising, and even less so because there is no indication that Party City had committed to making its website accessible in the confidential settlement agreement—the relief sought in the Pennsylvania case. Public settlement agreements requiring a company to make its website accessible, or a consent decree in which a court orders a company to make its website accessible, are much more likely to deter additional website accessibility lawsuits. Companies that are under a court order to make their websites accessible have a strong argument that any subsequent ADA Title III suit is moot because the only relief that can be obtained in such a suit—injunctive relief—has already been ordered. Plaintiffs are also likely to find companies that have made a contractual commitment to making their websites accessible to be less attractive targets because the work may be completed while the second lawsuit is pending, mooting out the claim. Ultimately, the best deterrence is having a website that is accessible to users with disabilities. While there is still no legally-prescribed standard for accessibility (nor, with the present Administration’s actions toward regulations does it appear likely one will issue anytime soon), the Web Content Accessibility Guidelines, 2.0 Levels A and AA are widely used in the industry as the de facto standard.