Fewer California businesses were targeted in federal court by disability access lawsuits in 2023, a new report indicates.
But California retained its place as one of the top destinations in the U.S. for claims seeking thousands of dollars from restaurants, hotels, retailers and other public accommodating businesses for allegedly making it more difficult for people with disabilities to access their premises, websites or other services.
And a large number of lawsuits may be all but hiding in plain sight in California's state courts, the authors of the report said.
According to a report from business defense firm Seyfarth, California placed second once again among all 50 states and the District of Columbia for Title III lawsuits filed against businesses under the Americans with Disabilities Act.
In all, California's federal courts logged 2,380 filings Title III ADA filings in federal court last year. That ranked the Golden State behind only the state of New York, which recorded 2,759 such federal court ADA filings, Seyfarth reported.
Florida ranked third, with 1,415 such lawsuits, the report said.
Together, the top three states continued to account for nearly 80% of all ADA Title III lawsuits in federal courts across the U.S., according to the report.
No other state logged more than 225 ADA Title III suits. The remainder of the Top 10 states were: Texas, at 224; Illinois, 202; Pennsylvania, 189; Tennessee, 134; Missouri, 121; Georgia, 120; and New Jersey, 115.
For most of the past decade, California's federal courts served as the top destination in the country for such ADA Title III suits. As recently as 2021, California federal courts logged 5,930 ADA lawsuits, or 51% of the U.S. total that year.
That year's total was also more than double the total of ADA lawsuits filed in federal court in New York, the second place state. Florida had 1,054 ADA lawsuits in federal court in 2021.
The lawsuits were birthed in the 1990s, following the passage of the Americans with Disabilities Act, as trial lawyers used the private litigation enforcement mechanism within the federal statute to press claims against businesses of all sizes for alleged discrimination in workplace accommodation and public access, among others.
However, in the past decade, the filing of such lawsuits have turned into a cottage industry within the broader anti-discrimination legal profession. Certain law firms have gained notoriety for filing thousands of such claims, often using so-called "serial litigants" and "testers" to identify businesses to target and serve as plaintiffs in individual and class action claims.
The serial litigants and testers then each would receive a cut of any settlement or judgment from businesses hit with the litigation.
According to data compiled by the Institute for Legal Reform, 18 law firms alone filed more than 45,000 ADA lawsuits across the country from 2009-2021, accounting for 44% of all ADA case filings in that span.
One California firm, Potter Handy, alone filed 13,340 such lawsuits in that time frame.
The serial ADA lawsuit industry has also been the target of numerous complaints from businesses and government officials, accusing them of fakery, shakedowns and other unethical conduct.
Prosecutors in Los Angeles and San Francisco, for instance, investigated Potter Handy's litigation activities and filed an unfair competition lawsuit against the firm, accusing the firm of using their lawsuits to "shake down hundreds of even thousands of small businesses" for cash settlements, whether or not they had a credible claim.
Both the L.A. and San Francisco lawsuits were dismissed under a feature of California law that blocked the lawsuits from continuing, but have been appealed.
Other reports have taken aim at testers and serial plaintiffs, who have been accused of faking disabilities, such as blindness, to bring their lawsuits.
Some of that negative attention may have produced some results, as Title III ADA lawsuit activity in California has dropped sharply in the past two years.
According to the Seyfarth report, Title III ADA filings dropped in to 2,519 in 2022, and edged down again last year. The lawsuit data marked the lowest number of Title III ADA filings in California federal courts since 2015, just before Potter Handy and their cohorts sent California's numbers soaring.
The Seyfarth report noted some of that decrease can be attributed to the breakup of one "prolific Southern California plaintiff's firm ... several years ago."
And the Seyfarth report noted that federal judges are increasingly declining to allow plaintiffs to use federal courts to press state law disability access claims they tack onto their larger ADA claims to juice the return they may receive in settlements or damages.
"These actions have made federal court a less attractive venue for plaintiffs seeking to recover damages which cannot be obtained under the ADA," the Seyfarth report noted.
However, attorney Kristina Launey, a partner at Seyfarth's office in Sacramento, said the decrease may not mean fewer businesses are actually being targeted by lawsuits over disability access.
Launey said trial lawyers across the country have shifted their disability access lawsuits to state courts. She said Seyfarth doesn't track such filings in state court "due to less reliability in reporting sources" than federal court.
But Launey said she believes it is likely that the move to state court has been particularly pronounced in California, given the sharp decrease in federal court filings since 2021, as they seek to continue taking advantage of California's plaintiff-friendly Unruh Act. That law offers damages of at least $4,000 per alleged violation.
"Yes, we think that plaintiffs filing more in state courts is part of it," Launey said.
Looking forward, Launey and Seyfarth "expect filings to stay pretty steady, if not continue to increase."
The Seyfarth report noted that some plaintiffs' lawyers may be emboldened by the U.S. Supreme Court's refusal to get involved in a dispute over whether testers have standing to sue under ADA.
Further, Launey noted that more lawsuits are also taking aim at business websites, as well as physical premises, which could drive the numbers up.
But Seyfarth said continued negative publicity and regulatory investigations that uncover "unsavory findings" could still "dampen the enthusiasm" of many lawyers to press large numbers of disability access claims.