A federal appeals panel has ruled Gateway Hotel can collect at least some legal fees from a plaintiff who lost a lawsuit accusing the company of skirting federal disability discrimination protections through its website reservation process.
In his 2020 state court lawsuit, Orlando Garcia accused Gateway of violating the Americans with Disabilities Act and state law because its website improperly limited potential patrons’ ability to find and reserve accessible rooms. Gateway removed the complaint to federal court and moved for dismissal. U.S. District Judge Percy Anderson granted the motion, finding the website to be ADA compliant.
Gateway then invoked an ADA provision allowing prevailing parties to request an award of legal fees, which Anderson granted. Garcia challenged that ruling before the U.S. Ninth Circuit Court of Appeals. Judge Bridget Bade wrote the panel’s opinion, filed Sept. 15; Judge Wallace Tashima concurred. Judge Andrew Hurwitz dissented.
According to Bade, Garcia argued a 2001 U.S. Ninth Circuit opinion, Brown v. Lucky Stores, holds the ADA only allows a fee award if a moving party can show “the action was frivolous, unreasonable or groundless” and said Anderson should’ve granted his motions to retax the costs, effectively denying Gateway’s application. But Anderson denied that motion, finding a 2013 U.S. Supreme Court opinion, Marx v. General Revenue, effectively overruled Brown.
Bade and Tashima agreed with Anderson, holding a federal judge has discretion to award costs to a prevailing ADA defendant. The majority said Marx, although it concerned the Fair Debt Collection Practices Act, was relevant in establishing “the decision whether to award costs ultimately lies within the sound discretion of the district court,” and further that federal courts have “inherent power to award attorney’s fees in a narrow set of circumstances, including when a party brings an action in bad faith.”
Garcia argued it would be more appropriate to consider Supreme Court opinions on fee-shifting provisions with respect to civil rights litigation, which would not include the FDCPA. But Bade wrote Marx specifically said judicial review should consider the standard set in the 1978 U.S. Supreme Court opinion Christianburg Garment v. Equal Employment Opportunity Commission, which addressed the 1964 Civil Rights Act.
“The background presumptions for awarding fees and costs, combined with congressional intent as explained in Christiansburg,” Bade wrote, “demonstrate that, in permitting fee awards for civil rights defendants only on a showing that an action was ‘frivolous, unreasonable, or without foundation,’ Congress did not intend to displace the background presumption that costs may be awarded to prevailing parties
The majority further rejected Garcia’s arguments relying on other federal laws and reiterated that had the Ninth Circuit decided Brown in light of the Marx precedent, it “likely would have concluded that, although the statute considers awarding fees and costs in parallel, it does so cognizant of the background presumption that the standard for awarding defendants’ fees is more demanding than the standard for awarding defendants’ costs.”
In his dissent, Hurwitz agreed Marx dictates the awarding of costs to a prevailing ADA defendant, but disagreed “on whether our three-judge panel is free to reach these conclusions.” He said the panel also should’ve paid attention to a 2021 Ninth Circuit opinion, Green v. Mercy Housing, decided after Marx, regarding Fair Housing Act litigation.
Hurwitz said the majority was incorrect to conclude Green didn’t establish precedent because it didn’t “address whether Marx had abrogated Brown” and Green bolsters Garcia’s position.
“I am aware of no case — and the majority has cited none — holding that a three-judge panel of this court may ignore an opinion expressly on point simply by finding that it did not correspond with a prior Supreme Court opinion,” Hurwitz wrote. “We need not imply a holding from a prior opinion’s silence. Rather, Green expressly resolves today’s issue.”
Hurwitz said the entire Ninth Circuit should’ve assessed the issue so future three-judge panels wouldn’t freely avoid established circuit precedent.
Garcia is represented by Seabock Price, of Pasadena; and Potter Handy, of San Francisco.
Gateway is represented by Stillman & Associates, of Miami Beach, Florida.