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Ambulance Chasers Feast on Americans with Disabilities Act Claims

Thanks to generous attorney-fee provisions contained in federal civil-rights law, trial lawyers are feasting on Americans with Disabilities Act claims at the expense of small businesses, consumers, and indirectly the public.  As I noted earlier, a trial lawyer can collect thousands of dollars in attorney fees for "winning" a discrimination or ADA lawsuit, even if his client collects only $1.

These fees are one-way: under the so-called Christiansburg Garment  rule, the business has to pay the plaintiff's lawyer if the plaintiff wins the lawsuit; but if the plaintiff loses the lawsuit, the plaintiff does not have to pay the business anything.  This one-way fee-shifting is an incentive to bring some discrimination claims that are based on rather weak evidence or dubious interpretations of the law. Moreover, attorney fees are based not on the actual cost of representation, but on so-called prevailing rates that allow a lawyer for a "non-profit" law firm to collect more than any client would ever pay him: for example, non-profit lawyers are allowed to collect attorney fees based on the higher amount that a well-paid lawyer at a for-profit law firm would have charged clients.

As a story in today's New York Times illustrates, ambulance-chasing ADA lawsuits are especially common in New York City, where high density and sharply-limited space makes it particularly difficult and costly for small businesses to comply with ADA requirements (alternative link here):

New York City’s aging architecture is providing attorneys -- some from out of state -- with fodder for lawsuits citing violations of the Americans With Disabilities Act.

In many cases, the lawyers identify local businesses, such as bagel shops and delis, that are not in compliance with the law, and then aggressively recruit plaintiffs from advocacy groups that cater to disabled people, the newspaper reported.

The plaintiffs typically collect $500 for each lawsuit, and each plaintiff can be used several times over. The lawyers make several thousands of dollars, because the civil rights law entitles them to legal fees from the noncompliant businesses.

The New York Times said the practice has prompted debate about whether the lawsuits are justified because they bring about change – or "simply a form of ambulance-chasing, with no one actually having been injured." . . .

Lawmakers and federal judges have questioned the practice, contending that the lawyers are interested only in generating legal fees; they say the lawyers typically do not give the businesses a chance to remedy the problem before filing suit. . . .

In Florida, editorial boards, lawmakers and federal judges have long argued against the practice. In 2004, Judge Gregory A. Presnell of Federal District Court in Orlando said in a written opinion in favor of a business owner: “Plaintiff’s testimony left the distinct impression that he is merely a professional pawn in an ongoing scheme to bilk attorney’s fees from defendant.” . . .

Carr Massi, who uses a wheelchair, sued five businesses in Manhattan. . . .Asked if she ever patronized the businesses she sued after they made improvements, Ms. Massi said, “Unfortunately, no.” . .

Local business owners, who say they are often sued without warning, call the suits shakedowns. . .“All they want is money; they get the money, and they move on to the next target,” said Ming Hai, a Queens lawyer who has defended businesses from the suits.

When it comes to ADA compliance, small businessesses are subjected to legal harassment no matter what they do. Many small businesses don't have the freedom to unilaterally modify their entrances or facilities to make them handicapped-accessible, due to municipal code compliance regulations. Instead, they have to submit costly, detailed applications to code enforcers first, and sometimes have to wait months or years for approval, during which time they are sitting ducks for greedy trial lawyers bringing ADA claims. If they make their facilities ADA compliant without receiving the required municipal permits, they get fined by municipal officials.

As the owner of the Cha Cha Chicken restaurant on Pico Boulevard in Santa Monica noted, “We wanted to renovate our bathroom areas to make it more handicap-accessible and it took us almost three years to get all the permits. . .We kept giving all the paperwork they need, but it took forever. We needed the Pico Improvement Organization to plead our case.” Legal commentator Walter Olson writes about "ADA filing mills" that enrich trial lawyers here.

ADA compliance is continually evolving and imposes ever-increasing costs. What was not required yesterday becomes required today, under new regulations and ever-changing government interpretations of the ADA, like the Justice Department's recent demand that hotel pools either close or install costly lifts for wheelchair users who might hypothetically use the pool. The Obama administration has sought to go even beyond what the ADA requires to impose hiring quotas based on disability on any employer that receives government contracts (that is, most of the nation's workplaces).