Los Angeles District Attorney George Gascón and San Francisco District Attorney Chesa Boudin sued a California law firm alleging it was shaking down small businesses using serial filers under provisions of the federal Americans with Disabilities Act (ADA).
The Potter Handy law firm, which maintains offices in Los Angeles, San Francisco, Greenville, and Quincy, is accused of targeting business owners who are minorities and pressuring them to settle for cash payments of $10,000 to $20,000, according to media reports.
“Multiple Chinatown businesses were sued for allegedly having inaccessible outdoor dining tables during the early months of 2021, those businesses were open for takeout only during that time and had no dining tables at all—indoor or outdoor,” the brief states. “Other businesses reviewed their security camera footage for the months in question and saw that the serial filers never went to their businesses at all. Still, others were sued for alleged violations that objectively did not exist.”
Potter Handy did not respond to requests for comment.
The complaint was filed last month in San Francisco County Superior Court and alleges that thousands of boilerplate, cut-and-paste federal-court lawsuits were filed that falsely assert its plaintiffs have standing under the ADA.
“There have been judges over the last 10 years who have tried to stop this but it has become a cottage industry and especially in California because the PAGA law makes it an easy formula,” said Karen Harned, executive director of NFIB's Small Business Legal Center. “They go in and look at the business and sometimes they don't even do that. They just do it by drone and look for guardrails or wheelchair accessible outdoor pools.”
The Private Attorneys General Act (PAGA) allows employees to file lawsuits seeking civil penalties on behalf of themselves, other employees, and the State of California for labor code violations.
“We've been arguing for over a decade now in Congress for a right to cure provision, which would allow business owners a chance to fix the actual problem before going and suing them in court,” Harned told the Southern California Record.
In January, Congressman Ken Calvert (R-CA) introduced H.R.77, also known as ADA Compliance for Customer Entry to Stores and Services Act, and it is currently pending in the House Judiciary’s Subcommittee on Crime, Terrorism, and Homeland Security.
“Most of our members have five employees or less and they don't have an attorney on staff, much less even an HR person, or anybody who would know anything about this and that's why I feel like the better choice for everybody, including the disabled community, is to give these businesses a chance,” Harned added. “If they don't correct, that's on them but don’t pressure them to pay tens of thousands of dollars to corrupt attorneys plus correct.”