Shakedown on predatory lawsuit reform inches forward

Another bill championed by a local legislator to address predatory lawsuits was signed into law by Gov. Jerry Brown just before Friday’s deadline.

Assembly Bill 54, by Kristin Olsen, R-Riverbank, should help the California Commission on Disability Access provide the Legislature with better reports about lawsuits and demand letters stemming from disabled customers’ access to stores, hotels and other businesses. Assemblyman Adam Gray, D-Merced, was the bill’s principal co-author.

They previously collaborated with Sen. Cathleen Galgiani, D-Manteca, on legislation approved by Brown in May, Senate Bill 269, allowing some small businesses time to fix technical violations of the Americans with Disabilities Act under limited circumstances.

Both laws are small steps, advocates say, in the ongoing battle against predatory lawsuits, outlined in a 2014 investigative reporting series of The Modesto Bee and the Merced Sun-Star. The reports found more than 60 lawsuits brought by serial litigants against businesses in Stanislaus and Merced counties, a few of which closed rather than fight in court or buckle to settlement demands for tens of thousands of dollars.

Several had been filed by an Arizona man who has sued hundreds of California businesses in each of the past 15 years, except when in prison on convictions for fraud and child pornography.

“A handful of highly litigious plaintiffs have targeted small businesses, often those without the financial resources and sophistication to challenge such lawsuits,” reads a legislative analysis prepared for AB 54. “Small businesses are justifiably fearful about being sued, while disabled consumers are often viewed with blame or suspicion even though they have a legal right to full and equal access.

“At the same time, there is no evidence that lawsuits filed by high-frequency litigants are frivolous,” the analysis says.

Last year, another new law – AB 1521 – required suing attorneys to notify the state Commission on Disability Access within five days of a court judgment or settlement in ADA cases. It was meant to help the Legislature track such lawsuits; for instance, the commission recently provided lawmakers with information on 300 such lawsuits since Brown signed AB 1521 a year ago.

Olsen’s AB 54 goes a step further by requiring attorneys to submit data in a standard format. It won unanimous approval in the Senate on Aug. 16, and in the Assembly on Aug. 22.

“We still need comprehensive reform of ADA access lawsuits,” said Kim Stone, president of the Civil Justice Association of California. “Businesses should receive notice of the problem and a chance to fix it before being hit with a lawsuit. But until we can get there, better data is a good start.”

Olsen, Gray and Galgiani all had introduced ADA-reform legislation last year with “right to cure” provisions. Facing stiff opposition, Gray and Galgiani withdrew theirs, and Brown vetoed Olsen’s watered-down bill because it contained a $250 tax credit for businesses facing improvements.

Other successful 2016 ADA-related legislation:

▪ AB 2093 – Requires commercial landlords to provide tenants with reports pinpointing access violations, if inspected by a Certified Access Specialist, supposedly reducing chances of a tenant being sued.

▪ SB 1406 – Requires those suing schools over ADA concerns to notify the state Commission on Disability Access.

This story was originally published October 3, 2016 at 3:57 PM with the headline "Shakedown on predatory lawsuit reform inches forward."