Articles Posted in Litigation

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In the world of online retail, strike-through pricing—displaying a higher “original” price crossed out next to a lower “sale” price—is a common marketing tactic to highlight discounts and drive sales. However, when not implemented correctly, this strategy can lead to legal claims from consumer protection law firms like Pacific Trial Attorneys, Tauler Smith LLP, and others. This article outlines practical strategies businesses can use to defend against similar lawsuits.

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Understanding A Typical Lawsuit

A typical lawsuit or complaint letter centers on the plaintiff’s purchase of a given item advertised at a lower price with a higher strike-through reference price. The plaintiff will claim this reference price was not the “prevailing market price” within the three months prior to the advertisement, nor was the date when it prevailed clearly stated, rendering the discount misleading. The lawsuit seeks damages, restitution, and injunctive relief for a class of California consumers who purchased products at with inflated reference prices.

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California has long seen a high number of lawsuits filed by individuals with disabilities alleging violations of the Americans with Disabilities Act (ADA), Unruh Civil Rights Act and the California Disabled Persons Act. Many have complained that these laws have been exploited by serial plaintiffs who file hundreds or thousands of lawsuits for minor technical violations, such as parking slopes being a few degrees too steep. Senate Bill 84 (SB-84), introduced on Jan. 17, 2025, by Senators Niello, Ashby, and Caballero, aims to strike a balance—preserving the rights of individuals with disabilities while offering small businesses a fair opportunity to address violations before facing lawsuits. At JMBM, we’re closely tracking this proposed legislation and its potential impact on our clients. Here’s what you need to know. Similar legislation has been proposed in the past, such as SB 585, but never passed. SB-84, however, is being proposed with some bipartisan support.

What SB-84 Proposes

SB-84 seeks to amend Section 55.56 of the California Civil Code, which governs statutory damages in accessibility claims. The bill introduces a critical procedural safeguard for businesses employing 50 or fewer individuals: a mandatory notice-and-cure period. Under the proposed law:

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“Strike-through pricing”—where retailers display a higher original price alongside a lower sale price—has been an effective marketing strategy for decades. However, in California, businesses must be cautious when using this strategy to ensure compliance with state laws. Misleading pricing claims can lead to expensive unanticipated legal repercussions, consumer mistrust, and costly class-action lawsuits.

The primary statute governing strike-through pricing in California is California Business and Professions Code § 17501. This law is designed to prevent deceptive pricing practices by ensuring that any advertised former price genuinely reflects the prevailing market price within a recent timeframe.

Key Provisions of California Business and Professions Code § 17501

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Section 55.54 Protections

For years, California businesses and their organizations have been trying to rein in the plethora of ADA lawsuits, particularly those filed by a handful of plaintiffs and their law firms to curb litigation abuse. Those trying to curb ADA litigation abuse have made several apparently important inroads.

One such inroad designed to curb litigation abuse is California Civil Code Section 55.54 which was enacted to provide protective measures against serial ADA lawsuits filed by “High Frequency Litigants.” If the plaintiff is a high-frequency litigant, as defined by California Code of Civil Procedure Section 425.55(b), then a defendant may seek a 90-day stay of the litigation, and an Early Neutral Evaluation. A high-frequency litigant is defined by a plaintiff who has filed 10 or more complaints alleging construction-related accessibility violations within the 12-month period immediately preceding the filing of the complaint. The process is incredibly simple, and requires the filing of a single form, checking off a few boxes. The most important rule is that the Section 55.54 application must be filed before or concurrently with the Answer, or responsive pleading, to the Complaint.

The goal of the Early Neutral Evaluation, and the 90-day stay, is for parties to reach early settlement. The Court will set forth the necessary procedures, documents, and goals for the early neutral evaluation. The Court may also require parties to conduct a joint inspection of the property in question.

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So Cal Equal Access Group (So Cal) files ADA lawsuits almost on a daily basis. By and large, these lawsuits filed in Federal Court focus on the lack of accessible parking, inaccessible paths of travel to the building entrances, inaccessible entry doors, transaction counters that are excessively high and bathrooms that fail to comply with the ADA and the California Building Code (CBC). Lately, the firm has set its sights on the auto repair industry in the greater Los Angeles area. The law firm has filed suits on behalf of Larry Dunn, Jardine Gougis, Cesar Acevedo and Moses Villalobos, among others.

These lawsuits are typically filed against building and business owners related to properties built long before the ADA was enacted in 1991. Under the ADA both building owners and business operators are jointly and severally liable to the disabled plaintiff which means the plaintiff can sue either the business owner or building owner or both. Of course, landlords typically place responsibility on the tenant for indemnification for violations of law in the operation of their business through their leases. However, this legal chestnut is of little moment to the plaintiff’s lawyers who sue both the landlord and business operator. They typically sue the landlord who may have no idea that these ADA and CBC violations exist. Landlords typically tender the defense and indemnification to the tenant which only works if the tenant has the wherewithal to pay to defend both parties. Continue ›

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California Senate Bill 585 (SB 585) seeks to achieve a balance between ensuring accessibility for individuals with disabilities and protecting small businesses from exploitative litigation. The draft bill proposes a “right to cure” period, allowing businesses with 50 or fewer employees 120 days to rectify alleged construction-related accessibility violations before facing statutory damages, attorney’s fees, or costs.

Background

Under existing California law, businesses found in violation of construction-related accessibility standards can be subject to minimum statutory damages starting at $4,000 per violation, along with attorney’s fees. This framework has led to a surge in lawsuits, particularly in California where statutory damages under the Unruh Civil Rights Act incentivize high levels of litigation. See Unruh Civil Rights Act Basics. Many of these lawsuits have targeted small businesses for minor infractions, resulting in significant financial burdens.

Provisions of SB 585

SB 585 introduces several key measures that would apply to business with 50 of fewer employees anytime in the past 3 years:

  • Notice Requirement: Plaintiffs must serve a letter to the business detailing each alleged violation of accessibility standards before filing a lawsuit; and
  • 120-Day Cure Period: Upon receiving the letter, businesses have 120 days to correct the specified violations before the plaintiff can file a lawsuit.
  • Limitation on Liability: If the business remedies the violations within the cure period, it is not liable for statutory damages, plaintiff’s attorney’s fees, or costs related to those violations.
  • Prevention of Circumvention: Plaintiffs cannot bypass these provisions by seeking general discrimination damages under the Americans with Disabilities Act (ADA) if the claim is based on physical accessibility standards under California law.

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On our ADA Compliance & Defense Blog, we have written extensively about Americans with Disabilities Act (ADA) and California Unruh Civil Rights Act lawsuits. Many such lawsuits are filed by a small handful of serial plaintiffs and their law firms who actively seek out physical locations and websites of businesses that are allegedly not fully accessible. Once found, the plaintiff will sue the business and/or the landlord for disability discrimination. For example, a plaintiff might sue 3 businesses in a week because the accessible parking slope was above 2.1% or the website was not accessible for blind users’ screen reading software. In such cases, the plaintiff typically seeks injunctive relief (a court order requiring compliance), statutory damages of $4,000 per occurrence, and attorneys’ fees.

There are various defenses to such cases that my team and I explore when defending a client who has been sued. See my recent articles on that topic:

Common Defenses to Unruh Civil Rights Act and ADA Lawsuits (Part 1)

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Peter Strojnik (AKA P. Kristofer Strojnik) is an attorney based out of Phoenix, Arizona who files many accessibility lawsuits on behalf of his client, Theresa Brooke. According to publicly filed litigation documents, the office is located on East Camelback Road in Phoenix. Peter Strojnik has years of experience filing these types of cases against businesses and landlords regarding alleged violations of the California Unruh Civil Rights Act and Americans with Disabilities Act (ADA).

Each lawsuit generally includes a summons as a cover page informing you that you have been sued and must respond. It also contains the “VERIFIED COMPLAINT” with “Jury Trial Demanded,” which generally looks something like this:

Verified-Complaint

The complaints usually state in the first paragraph that “Plaintiff Theresa Brooke is a married woman. Plaintiff is legally disabled, and is therefore a member of a protected class under the ADA.”

It might further state under the “Allegations” section that “Plaintiff alleges that Defendant’s hotel does not have a compliant access aisle at the passenger loading zone adjacent to the hotel lobby in violation of Sections 209 and 503 of the 2010 Standards.”

There are specific accessibility requirements applicable to most businesses and places open to the public as outlined in the ADA and California law. These are provided in detail within the 2010 ADA Standards published by the Department of Justice (DOJ). A passenger loading zone is not always required under the ADA. Where passenger loading zones are provided, at least one accessible passenger loading zone is required in every continuous 100 linear feet of loading zone or fraction thereof. Compliance is required only where areas are specifically designed or designated for passenger loading, such as those at airports, many hotels, and convention centers. But it’s important to note that not all areas designated for a brief stop constitute passenger loading zones. There are specific measurements and details applicable when accessible passenger loading zones are required. Continue ›

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The Reddy Law Firm LLC is a relatively new law firm that started filing accessibility lawsuits on behalf of various plaintiffs alleging violations of the California Unruh Civil Rights Act and California Disabled Persons Act. Though a relatively new ADA plaintiff’s lawyers, the firm is an offshoot of Potter Handy, from San Diego.  The lawsuits generally reference the Americans with Disabilities Act (ADA) as well.

Generally, each of these lawsuits are filed on behalf of one of several serial plaintiffs, who file many similar cases each year. Some serial ADA plaintiffs in California have been known to file hundreds, sometimes thousands of lawsuits each against various businesses.

The Reddy Law Firm has filed Unruh litigation on behalf of these plaintiffs:

  • Meryl Pomponio
  • Orlando Garcia
  • Brian Whitaker

These lawsuits show no signs of stopping. Each lawsuit includes a summons as a cover page informing you that you have been sued and must respond. It also contains the complaint itself, which generally looks something like this: Continue ›

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Marty Orlick, Chair of JMBM’s ADA Compliance & Defense Group, was recently interviewed by ABC7 for a news report regarding the impact of serial ADA litigants on small businesses. The segment focused on a group of businesses in Santa Paula, California, who have been hit with lawsuits alleging violations of the Americans with Disabilities Act. The significant financial penalties imposed by these lawsuits threaten to close already struggling stores and restaurants.

During the segment, Marty discussed the California Unruh Civil Rights Act which requires businesses and public accommodations to provide equal access to their services and facilities. He explained that the Unruh Act “allows a plaintiff to recover $4,000 per occurrence every time they went to a particular business, or every time they thought of going but they realize there were barriers and they couldn’t get served.” The Unruh Act is often abused by serial plaintiffs who file hundreds of lawsuits every year, each claiming thousands of dollars in statutory damages.

These serial lawsuits can be incredibly damaging for businesses and are the antithesis of genuine legal action by advocates trying to make their communities more accessible.

You can watch the full ABC7 news report here.

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