Articles Posted in Litigation

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The Court Dismisses ADA Lawsuit for Lack of Standing – Proving Once Again These Cases Can Be Won

Anthony Bouyer v. LAXMI Hospitality, LLC

By Martin H. Orlick

It’s important to remember federal courts are courts of limited jurisdiction.  That limited jurisdiction derives from Article III of the U.S. Constitution. To establish standing under Article III, an ADA plaintiff must show actual or imminent injury. Injunctive Relief to remove access barriers is the only relief available to an individual ADA plaintiff in Federal Court.

In August, 2020, the plaintiff in Anthony Bouyer v. LAXMI Hospitality, LLC filed an action alleging the defendant’s hotel in Woodland Hills, California violated the Americans with Disabilities Act (ADA).  According to the Complaint, the plaintiff is substantially limited in performing regular life activities and uses a wheelchair when traveling in public.  The Complaint alleges that the plaintiff visited the hotel where he encountered ADA violations.  The hotel had no record of the plaintiff’s alleged visit.  The plaintiff’s Complaint sought injunctive relief requiring the defendant to make the hotel accessible.
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In 2020, we saw an explosion of federal lawsuits against hotels alleging that they failed to comply with 28 C.F.R. 36.302(e) of the Americans with Disabilities Act (ADA) by not identifying accessible features on their own and third party booking agents’ websites.

Twice this year, we reported that ADA website lawsuits filed against hotels by serial plaintiff Deborah Laufer were dismissed as she failed to show she had standing to sue. Is the third time a charm, or is it the prelude to an appeal?

On November 19, 2020, a federal district court judge dismissed yet another ADA website lawsuit because Ms. Laufer failed to show she had standing to sue under Article III of the Constitution because she did not show “individual” or “particularized” injury.

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Title III of the ADA allows customers and visitors to sue businesses and landlords for disability discrimination in court. The alleged violations range from everything from parking lot slope to website design. What should you do if you’ve been sued under Title III of the ADA?

  1. Take a deep breath.

Title III ADA cases are very seldom “bet the business” size cases. They can generally be resolved through settlement negotiations or court motions without threatening continued operation of the business. But you need to take action as soon as you’re aware of the lawsuit or threatened lawsuit.

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See Part 1 – What you need to know about how we got here
See Part 3 – Website litigation specific to hotels

This article was first published by Law360® Expert Analysis, © 2019 Portfolio Media Group Inc. and is reprinted with permission. 

The Supreme Court and the Ninth Circuit: Rights to due process

On October 7, 2019, the U.S. Supreme Court declined to hear an appeal by Domino’s Pizza LLC, sending Domino’s back to the trial court to determine if it can be held liable under the ADA for website accessibility. The high Court’s refusal to accept certiorari in this case was a disappointment to the hospitality industry and others. What happened?

In 2017, a federal district judge dismissed the website accessibility suit filed against Domino’s by a prolific ADA plaintiff (Robles v Domino’s Pizza LLC) on grounds that the failure of the DOJ to issue clear guidelines for website accessibility standards violated Domino’s constitutional right to due process. It appears that the DOJ was unaware of the lawsuit or that Domino’s filed a dispositive motion in the case, otherwise it likely would have intervened or filed an amicus (friend of the court) brief in opposition to the motion. Domino’s convinced the court that the DOJ had inconsistently applied the WCAG criteria in settlements, Consent Decrees and litigation. Domino’s convinced the court that such inconsistent application left businesses guessing which criteria to follow when developing their websites – the due process violation.

However, the Ninth Circuit Court of Appeals reversed the lower court’s decision and on January 15, 2019, determined that the ADA applies to Domino’s website, writing in its Opinion that: “Finally, the lack of specific regulations, not yet promulgated by the Department of Justice, did not eliminate Domino’s statutory duty.”

Now that the Supreme Court has declined to review the Ninth Circuit’s decision, the case returns to the District Court to be tried on its merits. Whether that will happen is yet to be seen – it’s possible the case will be settled soon after remand. Continue ›

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See Part 2 – Rights to due process and standing requirements
See Part 3 – Website reservations: ADA litigation specific to hotels

This article was first published by Law360® Expert Analysis, © 2019 Portfolio Media Group Inc., and is reprinted with permission.

Part 1 – What you need to know about how we got here

When the Americans with Disabilities Act (ADA) was enacted by Congress in July 1990, the Internet was in its infancy and few, if any, considered its applicability to cyberspace. But in 2006, a California federal judge ruled that the ADA applied not just to brick and mortar establishments, but to websites: National Federation of the Blind v. Target Corp brought the ADA into the digital age. Application of the ADA to mobile apps would follow nearly a decade later.

In October of this year, thirteen years after Target, the U.S. Supreme Court’s declination to hear an appeal by Domino’s Pizza LLC to determine if it can be liable under the ADA for website accessibility, was a blow felt throughout the hospitality industry and others, which hoped to gain clarity on accessible website standards under the ADA. (See Robles v. Domino’s Pizza LLC.)

Following Ninth Circuit rulings, the decision reaffirms the principle that companies whose Internet activities are related to their brick and mortar stores may be held liable for violating the ADA even though the Department of Justice (DOJ) has yet to issue express website guidelines.

What’s going on?

Since Target, thousands of businesses – including hotels and restaurants – have been the subject of lawsuits claiming violations of Title III under the ADA because their websites and mobile applications are inaccessible to individuals who are blind and sight impaired and use screen reading software. Continue ›

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When will businesses get clear direction on ADA website compliance?

On October 7, 2019, the U.S. Supreme Court declined to hear an appeal by Domino’s Pizza LLC, sending Domino’s back to the trial court to determine if it can be sued under the Americans with Disabilities Act (ADA) by a blind customer who alleged Domino’s website and mobile application were not accessible to people who are blind or sight impaired and use the website and mobile app with standard screen reading capabilities.

The high court’s refusal to accept certiorari in this case was a blow felt not only by Domino’s – but throughout the business community, which hoped to gain clarity on accessible website standards under the ADA.

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A growing number of U.S. District Court judges in the Central District of California have taken steps to manage the growing number of Americans With Disabilities Act (ADA) lawsuits, particularly against hotels and retailers, and to curb ADA abuse.  Since June 2019, five Central District judges have issued over 80 Orders to Show Cause (OSC) why the Court should exercise supplemental jurisdiction over their state law claims – the claims that can make ADA litigation a lucrative endeavor for serial plaintiffs and their counsel.

How did we get here?

Federal Courts have original jurisdiction over federal ADA cases.  Under the ADA, a private litigant can only obtain injunctive relief, attorneys’ fees and litigation costs.  Damages are not recoverable under federal law.

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Serial Plaintiff Who Filed Nearly 3,000 Americans with Disabilities Act (‘ADA’) Lawsuits is Indicted by a Federal Grand Jury
and Faces Possible Imprisonment and Fines for Income Tax Evasion

In an ironic twist of fate, Scott N. Johnson, Esq., a disabled Sacramento attorney, who has filed nearly 3,000 ADA lawsuits as plaintiff, starting in the United States District Court for the Eastern District of California, now faces possible jail time for felony income tax fraud according to a Federal Grand Jury Indictment.

On May 23, 2019, United States Attorneys filed a Grand Jury Indictment, United States of America v. Scott Norris Johnson, accusing Johnson of three counts of “Making and Subscribing a False Tax Return” by failing to declare substantial income derived from ADA settlements on his U.S. Individual Income Tax Returns and his U.S. Corporation Income Tax Returns for the tax years 2012-2014.

According to the Indictment, from no later than “on or about January 28, 2008, SCOTT NORRIS JOHNSON owned and operated Disabled Access Prevents Injury, Inc. (“DAPI”), a corporation registered in the State of California. DAPI was treated as a C corporation for tax purposes.” The Indictment alleges that Johnson was DAPI’s sole shareholder and that DAPI “provided legal services associated with lawsuits that it filed on behalf of SCOTT NORRIS JOHNSON as the plaintiff.” Continue ›

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UPDATE: On December 23, 2020, the Fourth Appellate District Court dismissed the Riverside County District Attorney’s case against James Rutherford and his attorneys, on appeal. As reported in our May 21, 2019 blog Riverside County DA drops the hammer on ADA litigant and counsel to stop abusive litigation, the DA’s case alleged ADA serial plaintiff James Rutherford and the lawyers who regularly represent him were involved in abusive litigation. The Appellate Court dismissed this claim (see unpublished Opinion here) as the ADA lawsuits were protected by California’s litigation privilege. The Court wrote: “As we explain, the litigation privilege applies to the People’s complaint, and the People have not shown that an exception to the privilege applies.” It was our view then, and even more so after the Appellate Court’s decision, that the Riverside D.A.’s theory of the case led to the inevitable outcome. Perhaps the D.A.’s office will take a fresh look at the facts of the case and apply a new theory if it intends to pursue a case against serial ADA litigants.

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In an extraordinary case charging ADA litigation abuse, the Riverside County District Attorney’s Office filed an action on behalf of the People of California seeking to permanently prevent serial ADA plaintiff James Rutherford and two law firms that regularly represent him (Manning Law and the Law Offices of Babak Hashemi, and individual members of the firms) from filing abusive lawsuits. The Complaint alleges that the defendants violated various Business & Professions Code sections designed to protect the public against “unlawful, unfair or fraudulent acts or practices” and seeks civil penalties not to exceed $2,500 for each violation and other equitable relief. Civil penalties in this case could exceed $800,000 if the allegations prove true.

The Complaint alleges that “Defendants filed 323 lawsuits based on alleged violations of the Americans with Disabilities Act” in federal and state courts. Many of these lawsuits were filed against hotels and retailers. According to court papers, the pleadings filed by the defendants follow a pattern of near-identical “allegations, except for the identity of the named defendants and the date of the alleged harm.”

This lawsuit is eerily similar to a lawsuit filed by the Arizona Attorney General against Peter Strojnik, Sr., who filed nearly 2,000 identical ADA lawsuits against Phoenix/Scottsdale businesses. Suspended from practicing law, Mr. Strojnik surrendered his license to avoid disbarment. Another lawyer in New Mexico also surrendered her license in lieu of disbarment over ADA litigation abuse.

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On October 26, 2017, a judge dismissed 99 ADA lawsuits, ordered an in forma pauperis plaintiff  (a person without funds to pursue the cost of a lawsuit) to pay filing fees of $38,300 and authorized the defendants to file fee and sanction motions.

Surely, this plaintiff’s lawyer rues the day she answered an ad on Craigslist looking for a civil rights lawyer to file ADA litigation in her jurisdiction.

What’s going on?

A Strange Set of Circumstances

The Arizona-based organization, Litigation Management and Financial Services, Inc. (LMFS), a descendant of the notorious ADA plaintiffs’ group Advocates for Individuals with Disabilities, used Craigslist, indeed.com and other online media to find and engage disabled plaintiffs to file ADA lawsuits, and lawyers to represent them. The online advertisements resulted in hundreds of ADA lawsuits filed against businesses in New Mexico, Nevada, Colorado and Utah.

It is also how a disabled plaintiff and her lawyer came to file 99 ADA lawsuits in New Mexico, alleging each defendant’s business violated the ADA and related anti-discrimination laws.  According to court documents, the deal LMFS made with this plaintiff and her counsel, worked like this:

  • The plaintiff was paid $50.00 per lawsuit filed.
  • The plaintiff’s counsel received $100 per filing for serving as counsel of record for each lawsuit filed.
  • LMFS drafted all pleadings and defended any motion practice in exchange for the lion’s share of any settlements that resulted from the lawsuits.
  • LMFS also arranged for a driver to take the plaintiff to some — but apparently not all — of the businesses that were sued, for a photo-op.

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