Lawsuits are often described as a “rite of passage” for business and property owners: an inevitable occurrence that comes with the territory. But the threat of litigation is no small matter. Owners must budget for attorney’s fees, which can take a large chunk out of a company’s bottom line. Even well-intentioned businesses can find themselves sued out of business. Even if you do everything right, it seems, it’s only a matter of time before you’re sued.
Nothing illustrates this unfortunate reality better than “drive-by lawsuits,” an increasingly popular tactic used by some unscrupulous lawyers.
The phrase describes a practice used to shake down businesses. As documented in a “60 Minutes” report last year, some lawyers cruise around local communities in an attempt to spot minor ADA infractions at offices, gas stations, malls and other locations. Some don’t even bother to leave their homes, and instead use aerial images from Google Maps to target alleged violators. As “60 Minutes” reported:
“You might think you have to be a customer of a business to file a lawsuit against it, but in some states you don’t. You can simply drive by a store or restaurant, and if you see a sign in the wrong spot, or a ramp that’s off by a few inches, you can sue. They are called drive-by lawsuits, and some lawyers are filing hundreds of them against businesses that often have no idea they have done anything wrong.”
Signed into law in 1990, the Americans with Disabilities Act (ADA) marked a critical step in the fight to end the discrimination faced by individuals with disabilities in employment, transportation, public accommodation, communications and other aspects of public life. Actions or policies which deny rights to people with disabilities are simply wrong, which is why NAIOP strongly supports the mission and objectives of the ADA.
However, nuisance lawsuits represent the exploitation of a loophole. They take advantage of a private party’s ability to sue under the ADA, regardless of whether an actual injury occurred, without giving the target of the suit the ability to correct what might be an innocent mistake. In other words, lawyers who happen to spot a nonconforming wheelchair ramp may file suit, even if they suffered no harm themselves. Plaintiffs will typically issue a demand letter or otherwise threaten property owners with a lawsuit unless they pay a settlement. The tactic relies on business owners’ reluctance to invest the time and money necessary to fight in court, even if a violation doesn’t actually exist. Most people would simply call this extortion.
Since the only remedies available for a private plaintiff are injunctive relief (i.e. compelling the property owner to fix the violation) and recovery of attorneys’ fees, it’s no surprise that these attorneys would rather sprint to the courthouse than notify owners of alleged violations and seek a resolution. This is perhaps the most pernicious aspect of these frivolous claims: It’s the lawyers, rather than the disabled community, who benefit from this scheme, making it a clear violation of both the spirit and letter of the ADA law.
Along the way, thousands of businesses have suffered. Think it can’t happen to you? Consider this: The number of Title III ADA lawsuits – those dealing with public accommodations – has skyrocketed over the past 5 years, and more than doubled since 2014. They are also being filed by a tiny subset of the legal community. For example, a single Florida lawyer has filed more than 1,000 ADA lawsuits.
Fortunately Congress has taken note and is working to close this loophole. Earlier this month the House Judiciary Committee approved H.R. 620, the ADA Education and Reform Act. The bill would grant businesses the opportunity to correct alleged ADA violations before spending the time and capital on litigation. This would ensure that the original goal of the Americans with Disabilities Act – to improve access for people with disabilities, not to enrich a small group of unscrupulous attorneys – is ensured. Best of all the bill is bipartisan, and with more than 50 cosponsors enjoys considerable support from both sides of the aisle.
As H.R. 620 advances to the full House of Representatives, NAIOP will continue to work with its real estate allies to educate lawmakers on the importance of reforming the ADA.
Alex Ford is NAIOP’s Director of Federal Affairs.