ADA Shakedown Lawsuits Are on the Rise

ADA Shakedown Lawsuits Are on the Rise
A gavel resting on a table. (Rod Lamkey/Getty Images)
Juliette Fairley

Before Roozbeh Farahanipour became chair of the West Los Angeles Chamber of Commerce, his restaurant was sued because the bathroom was non-compliant with the federal Americans with Disabilities Act (ADA).

“It lacked guard rails and the bag hook was too high on the bathroom door,” he said.

Farahanipour settled with the law firm that filed the complaint for $11,000.

“That was really hard on me because we did not have that money and I had to borrow the money,” he said. “I did not know the legal system or how to even answer the lawsuit when it was served.”

Farahanipour, whose country of origin is Iran, was sued again by the same law firm at a second restaurant he opened in 2021. He paid $17,000 to settle the claim

“Immigrants are the best target because they are more scared,” Farahanipour told The Epoch Times. “They don’t know the law. They are not comfortable with the language and many other issues.”

Farahanipour is not alone in having been sued twice for allegedly violating the ADA.

Thousands of small business owners in California have been targeted, according to Los Angeles District Attorney George Gascón and San Francisco District Attorney Chesa Boudin who together sued the law firm, Potter Handy, alleging it was shaking down small businesses using serial ADA filings in violation of procedural reforms under the Unruh Civil Rights Act.

“Each year, Potter Handy files thousands of boilerplate ADA/Unruh lawsuits on behalf of a few repeat plaintiffs against California small businesses with little regard to whether those businesses actually violate the ADA,” the complaint states. “These lawsuits are financially onerous, in large part because the Unruh Act (but not its federal counterpart) allows Potter Handy to demand damages of at least $4,000 per alleged violation.”

The Potter Handy law firm did not respond to requests for comment and Greg Risling, assistant chief of media relations in the Los Angeles District Attorney’s office declined to comment.

The complaint was filed last month in San Francisco County Superior Court.

California is not the only state grappling with serial litigants filing ADA lawsuits against small businesses.

“We’re seeing these all across the country,” said Karen Harned, an attorney and executive director of the National Federation of Independent Business (NFIB)’s Small Business Legal Center in Washington, D.C. “A woman who owned a hotel in Minnesota was sued in February for not having a disability-accessible pool. Who’s going swimming outdoors in Minnesota in February?”

In New York, the Greenwich Village Chelsea Chamber of Commerce reports some twenty small businesses have been sued in lower Manhattan in just the last two years.

“We want to make sure the fees the lawyers are charging the businesses are not being shared with the plaintiff,” said Maria Diaz, executive director of the Greenwich Village Chelsea Chamber of Commerce. “My understanding is that it’s unethical because you can only sue for damages. Business owners can pay for the damages but it’s the fees for the lawyers that are exorbitant.”

Diaz sent a letter to Attorney General Letitia James and New York’s Chief Disability Officer Kimberly Hill in April asking the state to investigate.

“Many of my member businesses have been victims of predatory ADA lawsuits, some more than once, and have received demand letters from attorneys looking for quick settlements to avoid court proceedings,” Diaz wrote. “The latter practice signals to me a clear sign that these lawyers are abusing the law to increase their bottom lines rather than expand access for all.”

But, so far, neither James nor Hill has responded to the letter or to requests for comment from The Epoch Times. The New York State Bar Association and the California Bar Association declined to comment.

Diaz noted in her letter that attorney Stuart Finkelstein filed more than 300 fraudulent ADA lawsuits in New York City, including some in Chelsea and Greenwich Village, on behalf of two plaintiffs who had no idea he was filing claims with their names.

“This may seem like an extreme case, but other attorneys file dozens of cases each year on behalf of individual plaintiffs,” she stated in writing. “In response, I strongly urge your collective offices to investigate and scrutinize attorneys that serially file similar cut-and-paste lawsuits.”

In 2019, the Department of Justice charged Finkelstein with mail fraud, aggravated identity theft, false declarations to a court, and obstruction of justice for stealing the identities of two individuals in order to file hundreds of unauthorized fraudulent lawsuits pursuant to the ADA, according to charging documents.

In response to the widening cottage industry, Rep. Ken Calvert (R-Calif.) introduced H.R.77, also known as the ADA Compliance for Customer Entry to Stores and Services (ACCESS) Act, to help businesses nationwide comply. The proposed legislation is pending in the House Judiciary’s Subcommittee on Crime, Terrorism, and Homeland Security.

“Small business owners face tremendous challenges to keep the doors open and should be protected from serial litigants trying to exploit laws, like the ADA, for personal gain,” said Rep. Calvert in a statement online.

If H.R. 77 is approved, a business owner would have 120 days to address the infraction.

“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 small businesses in court,” 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.”

Juliette Fairley is a freelance reporter for The Epoch Times and a graduate of Columbia University’s Graduate School of Journalism. Born in Chateauroux, France, and raised outside of Lackland Air Force Base in Texas, Juliette is a well-adjusted military brat. She has written for many publications across the country. Send Juliette story ideas at [email protected]
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