Law
3:01 pm
Wed April 23, 2014

Under Calif. Law With Teeth, Big-Time Lawsuits Hit Small Businesses

Originally published on Wed May 28, 2014 8:46 am

Transcript

AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

MELISSA BLOCK, HOST:

And I'm Melissa Block.

The Americans with Disabilities Act requires equal access to stores, offices and public places all over the country. It's a federal law. But more than 40 percent of all ADA lawsuits are filed in California, because in California the law has some extra teeth. People who sue there can get cash damages from a business that is not ADA compliant.

And as NPR's Nathan Rott reports, some businesses say they're being specifically targeted.

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NATHAN ROTT, BYLINE: A customer strolls in as Balwinder Singh Dhaliwal bags a bottle of Sprite and a pack of Fritos, pulling up the sleeves of his knitted sweater.

BALWINDER SINGH DHALIWAL: Thank you.

ROTT: Dhaliwal's the owner of this tiny, corner convenience store in southeast Fresno. So most days he's the cashier too, watching from behind the lighter displays and lottery tickets as customers come and go. Last winter though, he did not see Natividad Gutierrez.

DHALIWAL: I did not see him because I'm inside.

ROTT: Gutierrez has a disability and is in a wheelchair. And on the day he came in, he claims his access was blocked by narrow aisles and boxes. So, Gutierrez did what he has done at least a dozen times over the last six months: He sued under the Americans with Disabilities Act.

DHALIWAL: Two, three week later on I get letter. They was asking $75,000.

ROTT: Seventy-five thousand dollars worth of fines, damages and legal costs wasn't just for the narrow aisles. The suit also said the entrance to the store wasn't in compliance. Dhaliwal walks outside and points to some new concrete.

DHALIWAL: This was tile, beautiful ceramic tile was right here.

ROTT: But it was too angled and not slip proof.

How much did it cost you to tear up all this tile and put in this concrete we're standing on now?

DHALIWAL: Almost $2,500.

ROTT: An attorney told Dhaliwal to settle. He wouldn't win because he was not in compliance and the longer he fought it the more it would cost. That advice cost Dhaliwal $800.

You settled for $6,500.

DHALIWAL: S$6,500.

ROTT: You spent $2,500 on this.

DHALIWAL: Yes. Yes.

ROTT: You're at $9,000 and then another $800. So it's almost at $10,000.

DHALIWAL: Ten thousand comes from nowhere.

ROTT: Balwinder Singh Dhaliwal is not alone. A liquor store and a small diner across street were sued too. Dhaliwal thinks that all of them were sued for a reason.

DHALIWAL: They are targeting us because they know we don't have $50,000 to go hire an attorney to raise the money to defend us. It's just a big scam.

ROTT: There have been more than 300 ADA lawsuits filed in federal courts in California so far this year. More than a hundred of those are in the Fresno area. But it's hard to say just how many of those were against small businesses, businesses like Dhaliwal's. Reading through the court filings in the last couple months, you start to get an idea though: Oaxaca Restaurant, Ming's Restaurant, Pho Nam Restaurant.

Andy Chhikara is a leader in Fresno's Punjabi business community. He says he's helped scores of business owners in the last year who were facing ADA lawsuits. And more than two-thirds of them, he says, were Punjabi or a minority like him.

ANDY CHHIKARA: And the dictations on the lawsuits and demands were all similar. They're all demanding for $75,000.

ROTT: He says most of them settled, like Dhaliwal, because they couldn't afford to fight. And also, because for many ethnic communities...

CHHIKARA: When the word comes, lawsuit, into their family and stuff, it's a disgrace for them.

ROTT: The result, Chhikara says, is a target on their back for lawyers and plaintiffs who just want to make some quick money.

CHHIKARA: They're targeting minority and immigrant business owners.

RANDY MOORE: It's laughable. You don't have to target places because unfortunately there are hundreds of thousands of businesses that still don't comply. They don't comply until they get sued.

ROTT: Randy Moore is a lawyer who's filed hundreds of those ADA lawsuits in California. He and his wife represented Natividad Gutierrez in their lawsuit against Dhaliwal.

MOORE: I could take you down the street from where you are right now. And I bet I could find you 10 places within 10 blocks of where you are that are in clear violation of the law.

ROTT: There are more than a dozen lawyers in California like Moore, who file scores of ADA lawsuits a year. Moore says the myth that they target businesses purely for money is just that. There's no targeting and they're not in it just for the money.

MOORE: Over 20 years ago, there was a promise of disability access made to the disabled. My objective is to get compliance and make that promise come true.

ROTT: The controversy over the ADA has been going on in California for years. Small businesses call it legal extortion. Lawyers and plaintiffs say they're disability activists, just enforcing a nearly 25-year-old law the only way they can. The cries from both have been heard by California lawmakers. They've tried to intervene, passing one bill that was supposed to help small businesses, and another that created a caste of specialists to check buildings for compliance, like building inspectors.

That legislation also made a commission that's goal is to look at the lawsuits, work with both sides, and find a middle ground. Stephan Costellanos is the chair of that commission.

A number of store owners I talked to felt that they had been targeted. Is that something you have heard?

STEPHAN COSTELLANOS: We've heard that. And it's hard to tell from the data that we have if that's the case or not.

ROTT: Costellanos says they've heard from some municipalities, like the mayor's office in San Francisco, that feel like their non-English speaking businesses are disproportionately affected. But until he has hard data backing that, he's hesitant to say whether targeting is happening. He will say though that there needs to be better communication of the law to small businesses in multiple languages. They've talked to thousands of business owners and...

COSTELLANOS: Very few of them have ever said that they don't want to comply. You know, had they known or had they been warned then they certainly would have done it.

ROTT: California's legislature may take another swing at the law that would do just that. A proposed bill assembly bill would give businesses 90 days to comply after a complaint is filed. If the problem isn't fixed, the business can be sued. That would give businesses that grace period or warning to fix the problem, and still allow plaintiffs and lawyers to exact a penalty on those that don't. Both sides have problems with the idea. But some see it as a step in the right direction.

Lee Ky is among them.

LEE KY: I'm all for it.

ROTT: Ky is the manager of a donut store in Reedley, California, just southeast of Fresno. She's in the unique spot of seeing both sides of this issue. Her business was sued and...

KY: I myself in a wheelchair.

ROTT: She says all of the complaints against her store were minor: a door knob with the wrong kind of lock, an incorrect disabled access emblem, things that she would have been happy to fix given the chance. But she thinks those kinds of lawsuits are giving the ADA a bad reputation and, by extension, disabled people like her.

KY: If I was to go into a store, you know, would I get that look, like: Is she here to shop or is she here to see if my building is up to code or accessible.

ROTT: And that, she says, is the opposite of the law's intent.

Nathan Rott, NPR News, Culver City, California.

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