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QUESTIONABLE ADA LAWSUITS PROMPT OUTCRY, LEGISLATION

By Debra Hazel

A sign that hangs a few inches too low or a toilet roll holder that sits a tad high might seem like trivial stuff. But such violations of the Americans with Disabilities Act (ADA) have cost developers in California, Florida and other states dearly, in what some are calling extortion by unscrupulous lawyers.

Because the infractions are genuine, the suits are not legally frivolous. But the goal behind the actions, the developers say, is to collect legal fees rather than to help the disabled.

“The intention was simply to shake down these businesses,” said Elizabeth Nicolson, legislative director for U.S. Rep. Mark Foley (R-Fla.), who has introduced legislation to address the issue.

Generally, the targets are shopping centers, retailers and restaurants that are more than 20 years old, though ADA requirements can be so complex that even new properties may be at risk. The infractions themselves are minor and unintentional. Developers describe plaintiffs visiting centers with tape measure in hand to find signage that is a few inches too high or too low, or toilet paper holders that are an inch or two off regulation height.

Sometimes, the infraction isn’t specifically described at all. In one example, an individual sued the Malcolm H. Harris Trust, owner of a 6,000-square-foot shopping center in Bellflower, Calif., for “failure to remove architectural barriers structural in nature” related to parking, according to the filing, a copy of which was obtained by SCT. Nowhere in the document is the barrier described in detail. The suit, filed in December 2000, was settled out of court late last year. But the resentment lingers.

“All I can tell you is that we had no architectural impediments — we had two handicapped ramps,” said Malcolm Harris’s wife, Doralyn, adding that the same individual had also filed suits against other owners on the same street.

Usually, the infraction can be remedied easily and fairly inexpensively. But the costs associated with defending a suit easily outpace any costs to fix the problem. Harris noted that remedying the violation would have cost only about $3,000, while settling and defending the suit cost the small family-owned company some $13,000.

Even a defendant dropped from a suit can incur a lot of expense, which is what happened to William Poteet Jr., CLS, president of Naples, Fla.-based developer Poteet Properties. Poteet was brought into one such proceeding last year, only to be released when he proved just a minor interest in the named center.

“But I still had to retain a lawyer,” he noted.

Problems in California are exacerbated by the Unruh Civil Rights Act, which bans discrimination in business and accommodations in the state and increases damages for violations by at least 10 times. Often suits based on ADA violations invoke Unruh as well.

“It has a tremendous financial impact,” said Rex Hime, president of the California Business Properties Association, Sacramento, Calif., and an ICSC lobbyist. “A number of attorneys, for their own personal reasons, are taking advantage and filing lawsuits.”

Centers in New Jersey and Hawaii have also been targeted, said Wayne Mehlman, director of economic issues and government relations at ICSC.

Most suits don’t get to court. Generally, developers prefer to pay a settlement, and the opposing counsel’s fees, to avoid a more expensive legal battle. The cost is largely in the legal fees; few plaintiffs actually see any substantial damages.

Mark Foley (R-Fla.)

Foley’s legislation (HR 914), an amendment to the original 1990 disabilities act, would allow developers, retailers and other property owners 90 days to fix violations of the ADA before they could be sued. The original bill, which requires that property owners make their facilities reasonably accessible to the disabled, does not provide for a notification period.

“If a landlord has a problem with a tenant, he has to give prior notice,” said Jo Anne M. Bernhard, an attorney in Sacramento, Calif., arguing that developers should have the same right.

This is Foley’s second attempt at the legislation; a similar bill he introduced in February 2000 was derailed after activists for the disabled claimed that it would weaken the existing ADA.

Under Foley’s latest bill, a property owner could be sued only if he has been notified of a violation and has not corrected it within the time stipulated. The amendment also provides for penalties for nuisance suits; lawyers filing actions that do not meet certain criteria could be sanctioned, and plaintiffs would be denied attorneys’ fees or legal costs.

In the Senate, Sen. Daniel K. Inouye (D-Hawaii) has introduced the Americans with Disabilities Notification Act (S-782), which has similar provisions. ICSC and several other industry groups, including the International Mass Retail Association and the National Restaurant Association, have visited Capitol Hill in support of the legislation. It also is likely to be one of the issues discussed by ICSC members when they gather in Washington, D.C., this month for the annual Congressional Contacts Meeting.

But several factors may stand in the way of the bill’s passage in 2002. First, few congressional observers expect much new legislation to pass in a mid-term election year. In addition, the United States remains focused on economic recovery and issues of national security following the Sept. 11 attacks and the subsequent war.

Mehlman also noted that the 1990 ADA was signed by President George W. Bush’s father and questioned whether the younger Bush will do anything that might be perceived as weakening his father’s legacy.

Upsetting the highly vocal lobbying groups for the rights of the disabled is also a risky move.

“The ADA is sacrosanct — you can’t touch it,” said Morrison Cain, senior vice president of government affairs for the Washington, D.C.-based International Mass Retail Association. “This has to be seen as a reform rather than a retreat.”

The new law would not weaken the ADA, said Nicolson, Foley’s aide, though arguing that the original act is vague about notification requirements.

“Overall, this is a fairness issue, but [the amendment] also clarifies what probably was intended to happen,” she asserted.

Rather than rushing the law through, Foley has been working with the disabled community and reaching out to other congressional representatives, including Democrats, to build a consensus. More than 50 co-sponsors have signed on to the bill. But movement has slowed, particularly since Sept. 11.

“We have great hopes it will happen,” Nicolson said. “Whether it happens this year, I don’t know.”

Shelley Gotsagen, an advocate for the disabled, said she is sympathetic to the plight of property owners but maintained that she would prefer a nonlegislative remedy. Gotsagen, who is executive director of the Coalition for Independent Living, Lake Worth, Fla., acknowledged that the legal fees created by the suits are “extortion,” but she argued that even remotely amending the ADA could open the bill to further limitations on, or even eliminate the rights of, the disabled.

“What’s frustrating is that this small group of attorneys who don’t act as advocates are turning business owners against the disabled,” Gotsagen said. “We don’t support change in the legislation, but we do support repercussions for the attorneys,” perhaps from an ethics committee.

Meanwhile, the American Bar Association has yet to take a position, said a spokesman.

All sides agree the legislation’s passage through Congress will be anything but swift.

“We have a long way to go,” conceded ICSC’s Mehlman. “It’s still good that this issue is out there.”

On the state level, the California Business Properties Association and other groups are working toward drafting a bill to reform the process in California. This, too, has a long road ahead of it and will not be filed until Jan. 1, 2003 at the earliest, proponents say.

“We have a Bataan death march to go through,” said Hime, the association’s president, anticipating tortuous negotiations with the lobby for the handicapped.

Until then, the best cure for the problem is prevention.

“Make sure properties are in conformance,” Poteet advised. “Once the lawsuit is filed, there’s nothing much you can do.”

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