BILL ANALYSIS Ó SB 1186 Page 1 Date of Hearing: July 3, 2012 ASSEMBLY COMMITTEE ON JUDICIARY Mike Feuer, Chair SB 1186 (Steinberg & Dutton) - As Amended: June 20, 2012 SENATE VOTE : 36-0 SUBJECT : DISABILITY ACCESS: COMPLIANCE AND LIABILITY KEY ISSUE : SHOULD THIS MEASURE MOVE FORWARD AS NEGOTIATIONS CONTINUE AMONG MANY INTEREST GROUPS WITH THE GOAL OF IMPROVING COMPLIANCE WITH DISABILTY ACCESS LAWS WHILE LIMITING UNWARRANTED LITIGATION TARGETING SMALL BUSINESSES? FISCAL EFFECT : As currently in print this bill is keyed fiscal. SYNOPSIS This bill reflects the authors' commendable efforts to find common ground among civil rights advocates, people with disabilities, and small business owners who allege that they have been unfairly targeted with claims alleging a violation of longstanding disability access laws that guarantee equal treatment of disabled persons in places of public accommodation. The bill before the Committee represents the existing state of consensus as negotiations continue among a large number of stakeholders. As these discussions go forward during the remainder of the legislative session, the authors remain committed to seeking effective solutions that promote compliance with some of our most cherished civil rights laws while aspiring to do so without unwarranted litigation. As currently crafted, the bill would prohibit an attorney or any person from issuing a demand for money to a building owner or tenant for a violation of a construction-related accessibility standard and prohibit an attorney or any person from receiving any payment, settlement, compensation or other remuneration pursuant to a demand for money in cases alleging a violation of a construction-related accessibility standard. In addition, the bill would require a commercial property owner to state on the lease form or rental agreement if the property being leased or rented was inspected by a Certified Access Specialist (CASp). The bill also contains non-substantive legislative intent language. A controversial pre-litigation notice provision in earlier drafts has been deleted. SB 1186 Page 2 SUMMARY : Seeks to promote compliance with the state's disability access laws without unwarranted litigation. Specifically, this bill : 1)Prohibits an attorney or a person from issuing a demand for money to a building owner or tenant, or his or her agent or employee, or receiving any payment, settlement, compensation or other remuneration pursuant to a demand for money. 2)Defines "demand for money" as a written document or oral statement that is provided or issued to a building owner or tenant, or his or her agent or employee, that meets all of the following requirements: a) alleges one or more construction-related accessibility violations as the basis of one or more construction-related accessibility claims; b) contains or makes a request for money or states or implies that the building owner or tenant is liable for damages or attorney's fees or both; and c) is provided or issued without or prior to the filing of a complaint in state or federal court on the basis of one or more construction-related accessibility violations. 3)Provides that a violation of the above provisions shall be cause for the imposition of disciplinary action against an attorney. 4)Requires a commercial property owner to state on the lease form or rental agreement if the property being leased or rented is "CASp-Inspected" or is not "CASp-Inspected." 5)States the intent of the Legislature to: a) Examine the federal and state laws that provide persons with disabilities the right to full and equal access to places of public accommodation, and to address any conflict between those laws in construction-related accessibility standards that may lead to unnecessary litigation; b) Facilitate compliance by increased education regarding the accessibility laws, including requiring the California Commission on Disability Access to develop tools for use by businesses and building inspectors, and to post those tools SB 1186 Page 3 on its public Internet Web site to facilitate greater compliance; and c) Examine measures that would lead to greater compliance, to the benefit of both business and the disability community through reducing litigation and improving access for the disabled, without discouraging early compliance efforts and without affecting the right to sue for uncorrected and other violations. This effort shall examine and address issues many small businesses face from litigation and tactics pursued primarily for private gain under the state and federal disability access laws, rather than to rectify a disability access violation. EXISTING LAW : 1)Pursuant to federal law, under the Americans with Disabilities Act (ADA), provides that no individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases, or leases to, or operates a place of public accommodation. (42 U.S.C. Sec. 12182.) 2)Provides that individuals with disabilities or medical conditions have the same right as the general public to the full and free use of the streets, highways, sidewalks, walkways, public buildings, medical facilities, including hospitals, clinics and physicians' offices, public facilities and other public places. It also provides that a violation of an individual's rights under the ADA constitutes a violation of state law. (Civ. Code Sec. 54.) 3)Provides that individuals with disabilities shall be entitled to full and equal access to public accommodations, subject only to the conditions and limitations established by law, or state or federal regulation, and applicable alike to all persons. It further provides that individuals with disabilities shall be entitled to full and equal access to all housing accommodations offered for rent or lease, subject to conditions and limitations established by law. (Civ. Code Sec. 54.1.) 4)Provides that a violation of the ADA also constitutes a SB 1186 Page 4 violation of Section 54.1. A violation of Section 54.1 subjects a person to actual damages, plus treble actual damages but not less than $1,000, and attorney's fees as the court deems proper. (Civ. Code Sec. 55.) 5)Provides pursuant to the Unruh Civil Rights Act that all persons, regardless of sex, race, color, religion, ancestry, national origin, disability or medical condition, are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever. A violation of the ADA also constitutes a violation of Unruh. A violation of this section subjects a person to actual damages incurred by an injured party, treble actual damages but not less than $4,000, and any attorney's fees as the court may determine to be proper. (Civ. Code Sec. 51 et seq.) 6)Establishes the California Commission on Disability Access (CCDA), an independent state agency composed of 19 members, with the general responsibility for monitoring disability access compliance in California, and making recommendations to the Legislature for necessary changes in order to facilitate implementation of state and federal laws on disability access. (Gov. Code Sec. 8299 et seq.) 7)Requires an attorney, when serving a demand for money letter or a complaint on a defendant, to include a written advisory to the defendant of the defendant's rights and obligations, including the right of a qualified defendant to request a stay and an early evaluation conference regarding the allegations in the complaint. This written advisory is required from an attorney only and is not required from a pro per plaintiff. (Civ. Code Sec 55.3.) 8)Defines terms for a disability access action, specifically, as follows: a) defines a qualified defendant as a defendant in an action that includes an accessibility claim as to a place of public accommodation that has been inspected by a certified access specialist (CASp) and determined to meet applicable construction-related accessibility standards or pending determination by a CASp; b) defines a certified access specialist whose inspection report would be the basis for a defendant to qualify for SB 1186 Page 5 the early evaluation conference; c) defines the construction-related accessibility standard that a CASp would use to inspect and prepare a report on the place of public accommodation; and d) enumerates the duties of the CASp with respect to the inspection, the corrections that may need to be made to the site, written inspection report, and the statement of compliance, including the issuance, upon completion of the inspection and a determination that the site meets applicable construction-related accessibility standards, of a specified, watermarked, and sequentially numbered disability access certificate that may be displayed at the site. (Civ. Code Sec. 55.52.) 9)Provides that if a CASp determines that a site meets all applicable construction-related accessibility claims the CASp must provide a written inspection report to the requesting party that includes specified information. If the CASp determines that corrections are needed to the site in order for it to meet all applicable construction-related accessibility standards, the CASp must provide a written inspection report to the requesting party that identifies the needed corrections and a schedule for completion. (Civ. Code Sec. 55.53.) 10)Requires every CASp who completes an inspection of a site to provide the owner or tenant with a disability access inspection certificate if the site either meets applicable construction-related accessibility standards or is a CASp determination pending site. Existing law permits the building owner or tenant to post the certificate on the premises unless, after the date of inspection, the inspected site has been modified or construction has commenced to modify the inspected site in a way that may impact compliance with construction-related accessibility standards. (Civ. Code Sec. 55.53.) 11)Outlines the specific process to be followed when filing a disability access claim: a) specifies the contents of the request and includes a link to the Judicial Council of California's Web site to access the appropriate court forms; b) provides that a qualified defendant may file an application requesting an early evaluation conference (EEC) SB 1186 Page 6 after the defendant is served with the summons and complaint within 30 days of receiving the summons and complaint; c) grants qualified defendants a 90-day stay of the proceedings with respect to the construction-related accessibility claims, unless the plaintiff has obtained temporary injunctive relief; d) requires a mandatory EEC to be scheduled no later than 50 days after issuance of the order but no earlier than 21 days after the request is filed; e) directs the parties to appear in person at the time set for the conference; f) directs the defendant to file with the court and serve on the plaintiff a copy of any relevant CASp inspection report at least 15 days prior to the date of the EEC; g) directs the plaintiff to file with the court and serve on the defendant at least 15 days prior to the date of the EEC a statement containing, to the extent reasonably known, an itemized list of the alleged violations, the amount of damages claimed, the amount of attorney's fees and costs claimed, and any demand for settlement of the case in its entirety; h) specifies that the court shall lift the stay when the defendant has failed to file and serve the CASp inspection report when required and also did not produce the report at the EEC, unless good cause for the failure is shown; i) specifies that the court may lift the stay at the conclusion of the EEC upon a showing of good cause by the plaintiff; j) specifies the court's authority to schedule additional conferences or to extend the stay for no more than an additional 90 days, upon a showing of good cause; and aa) specifies the determinations the court would make at the EEC. (Civ. Code Sec. 55.54.) 12)Provides that the stay and early evaluation conference shall not be deemed to make any inspection report or opinion of a CASp binding on the court or to abrogate the court's authority to make appropriate findings of fact and law. (Civ. Code Sec. 55.54.) 13)Provides that the stay and early evaluation conference shall not be construed to invalidate or limit any California construction-related accessibility standard that provides greater or equal protection for the rights of persons with SB 1186 Page 7 disabilities than is afforded by the ADA and the federal regulations adopted pursuant to that act. (Civ. Code Sec. 55.54.) 14)Provides that notwithstanding the requirement that offers of compromise are privileged and protected under Evidence Code Section 1152, the court may consider, along with other relevant information, settlement offers made and rejected by the parties, in determining an award of reasonable attorney's fees and recoverable costs in any construction-related accessibility claim. (Civ. Code Sec. 55.55.) 15)Provides that statutory damages may be recovered in a construction-related accessibility claim only if a violation or violations of one or more construction-related accessibility standards denied the plaintiff full and equal access to the place of public accommodation on a particular occasion. Existing law specifies that a plaintiff is denied full and equal access only if he or she personally encountered the violation on a particular occasion or was deterred from accessing the public accommodation on a particular occasion. (Civ. Code Sec. 55.56.) COMMENTS : The authors state that they wish to address continued high rates of noncompliance with disability access laws and continued high numbers of demand-for-money letters and lawsuits that seek a quick settlement but do not improve disability access, which they contend have economically impacted small businesses. In its current form, this bill represents the existing state of consensus as negotiations continue among a large number of stakeholders. As these discussions go forward during the remainder of the legislative session, the authors remain committed to seeking effective solutions that promote compliance with some of our most cherished civil rights laws - recalling that lunch counter sit-ins played a critical role in the civil rights movement that transformed places of public accommodation - while aspiring to do so without unwarranted litigation. As additional provisions are crafted, the authors acknowledge that the bill will need to return to this Committee for further consideration. Brief Background on Disability Access Laws. For over forty years, persons with disabilities have had the legal right to full and free access to and use of roadways, sidewalks, buildings and facilities open to the public, hospitals and SB 1186 Page 8 medical facilities, and housing pursuant to the Disabled Persons Act. (Civil Code Secs. 54 and 54.1.) After President Bush signed the Americans with Disabilities Act (ADA) in 1990, the state made a violation of the ADA also a violation of Section 54 or 54.1. The state protections provided to disabled persons are comparatively higher than those provided under the ADA and are independent of the ADA. A violation of the Disabled Persons Act subjects the violator to liability for actual damages plus a maximum of three times the actual damages (but not less than $1,000), plus attorney's fees and costs. In a private right of action under the ADA, a plaintiff may obtain injunctive relief and attorney's fees, while an action by the U.S. Attorney may bring equitable relief, monetary damages on behalf of the aggrieved party, and a civil penalty of up to $100,000. Likewise, persons with disabilities have long been among the groups covered by the Unruh Civil Rights Act entitling all persons, regardless of sex, race, color, religion, ancestry, national origin, disability or medical condition, to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever. (Civil Code Section 51.) A violation of the ADA also constitutes a violation of Section 51. A violation of this section subjects a person to actual damages incurred by an injured party, plus treble actual damages but not less than $4,000, and any attorney's fees as the court may determine to be proper. (Civil Code Section 52.) SB 262 (Kuehl, Chapter 872, Statutes of 2003) established in the Division of the State Architect a voluntary "access specialist certification program" in order to assist business and property owners to comply with ADA and state access laws. The bill also authorized an enforcement action with civil penalties for noncompliance with ADA and state access laws, after notification of the business owner or operator by a government agency. The authority to institute a civil action was extended to county counsels (in addition to the Attorney General, district attorney, and city attorney). The Legislature Has Consistently Rejected Controversial Prior Efforts To Impose Difficult Pre-Litigation Notice Requirements Solely On Victims of Disability Access Laws. In 2003 and 2005, several bills were introduced after multiple lawsuits were filed SB 1186 Page 9 in state court by a few plaintiffs and attorneys against business owners and operators for allegedly "technical" violations of the state's access or ADA regulations. (SB 69 (Oller, 2003), AB 209 (Leslie, 2003), AB 20 (Leslie, 2005), SB 855 (Poochigian, 2005).) Three of those bills would have required pre-litigation procedures for a plaintiff to undertake prior to the filing of a complaint, including notice to the owner of the property or business of the alleged violations and would have provided a specified time period for the owner or business to cure the violations. One bill (AB 20) would have precluded an action for damages for a de minimus violation, allowing only injunctive relief and attorney's fees. All of those bills failed passage in the Judiciary Committees of their respective houses. In 2008, three bills were introduced relating to disability access. (AB 2533 (Keene, 2008), SB 1766 (McClintock, 2008), SB 1608 (Corbett, Harman, Steinberg, Runner and Calderon, Chapter 549, Statutes of 2008).) AB 2533 would have required a person alleging violations of the full and equal access laws to first deliver a notice to the responsible party, specifying the physical conditions complained of, and would have required that entity to make a good faith effort to remedy the condition. No person could file an action unless the person to whom the notice was given failed, within 30 days of receipt of the notice, to commence a good faith effort to remedy the condition complained of, or the person allowed unreasonable delays in remedying the condition. AB 2533 failed passage in the Assembly Judiciary Committee. SB 1766 would have taken a similar approach by imposing a duty on a person with a disability to first notify by certified mail the owner or manager of the housing or public accommodation in violation of the full and equal access laws and also impose a duty on the owner or manager to remedy the condition complained of within six months. That bill failed passage in the Senate Judiciary Committee. In 2011, SB 783 (Dutton, 2011) would have established notice requirements for an aggrieved party to follow before he or she can bring a disability access suit and given the business owner a 120-day time period to remedy the violation. If the property owner cured the violation, the bill would have provided that an aggrieved party cannot receive any damages or attorney's fees, except for special damages. That bill likewise failed passage in the Senate Judiciary Committee. SB 1186 Page 10 Recent Landmark Bipartisan Legislation To Improve Compliance And Deter Unwarranted Litigation . SB 1608, which took effect January 1, 2009, did not create any pre-litigation hurdles for a person with a disability but focused instead on measures to improve compliance and to quickly resolve litigation in order to redress violations and avoid unnecessary cost and delay. Among other things, the bill provided for an early evaluation of a filed complaint if the defendant had the identified place of public accommodation inspected and determined to meet applicable physical access standards by a state Certified Access Specialist (CASp) prior to the filing of the complaint. That measure also established the California Commission on Disability Access to make recommendations to the Legislature on any further improvements to California law, such as this measure. After some initial delays due to funding and start-up complexities the Commission is now reportedly functioning as intended. This Bill Would Prohibit Issuing Pre-Litigation Demands For Money. This bill would prohibit an attorney or a person from issuing a "demand for money" to a building owner or tenant, or his or her agent or employee, or receiving any payment, settlement, compensation or other remuneration pursuant to a demand for money. This bill would define "demand for money" as a written document or oral statement that is provided or issued to a building owner or tenant, or his or her agent or employee, that meets all of the following requirements: (1) alleges one or more construction-related accessibility violations as the basis of one or more construction-related accessibility claims; (2) contains or makes a request for money or states or implies that the building owner or tenant is liable for damages or attorney's fees or both; and (3) is provided or issued without or prior to the filing of a complaint in state or federal court on the basis of one or more construction-related accessibility violations. Under existing law, attorneys are required to provide a specified advisory notice to a building owner or tenant with each demand for money or complaint based on construction-related accessibility claims. These notices-which inform the building owner or tenant of his or her legal rights including that the business is not required to pay any money unless and until a court finds it liable-must be provided regardless of whether the attorney intends to file the case in state or federal court. As the authors note above, these provisions were included in SB 1608 and intended to address concerns that some attorneys were threatening small businesses with lawsuits by notifying them of SB 1186 Page 11 violations and "coercing" them into settling to avoid being sued. The authors state that the practice of sending a demand for money letter for violation of a construction-related accessibility standard is continuing to "vex small businesses with its 'pay-now or pay-more-later' demand." The provisions of this bill are intended to help address this perceived problem by prohibiting demands for money - both oral and written - in cases in which the claim alleges one or more construction-related accessibility violations. Expansion of Defendant's Rights Advisory. In order to deter potentially intimidating settlement demands, this bill also requires that a written advisory accompany every civil complaint and every written or oral settlement demand made either by an attorney or by a party alleging a construction related accessibility claim. This notice, to be provided in English and other prevalent languages sets forth important information regarding the defendant's rights and obligations, and warns that no defendant is required to pay any money unless and until a court imposes liability. This Bill Would Require Commercial Property Owners To Provide Casp-Inspection Notice In Leases. This bill would require a commercial property owner to state on the lease form or rental agreement if the property being leased or rented has been inspected by a Certified Access Specialist (CASp). Specifically, the form or agreement must state if the property "is CASp-Inspected" or "is not CASp-Inspected." Under existing law, "CASp-inspected" means the site was inspected by a CASp and determined to meet all applicable construction-related accessibility standards, as specified. As mentioned above, SB 262 (Kuehl, Ch. 872, Stats. 2003) established in the Division of the State Architect a voluntary "access specialist certification program" in order to assist business and property owners to comply with the ADA and state access laws. SB 1608 built upon this CASp program by requiring a CASp to provide a written inspection report that includes specified information, if the CASp determines that a property meets all applicable construction-related accessibility claims. If the CASp concludes that corrections are needed to the site in order for it to meet all applicable construction-related accessibility standards, the CASp must provide a written inspection report that identifies the needed corrections and a schedule for completion. SB 1186 Page 12 SB 1608 also required every CASp who completes an inspection of a site to provide the owner or tenant with a disability access inspection certificate if the site either meets applicable construction-related accessibility standards or is a CASp determination pending site. The building owner or tenant may then post that certificate on the premises unless, after the date of inspection, the inspected site has been modified or construction has commenced to modify the inspected site in a way that may impact compliance with construction-related accessibility standards. If a building owner or tenant is later sued for a violation of construction-related accessibility standards, he or she may file an application requesting an early evaluation conference (EEC), as specified. The defendant may then be granted a 90-day stay of the proceedings with respect to the construction-related accessibility claims, unless the plaintiff has obtained temporary injunctive relief. Controversial Notice Provision Deleted. Prior to recent amendments, this measure would have mandated that attorneys provide to a building owner or tenant a document that notifies the recipient of any alleged construction-related accessibility violation that may be a basis for a damages claim at least 30 days prior to filing any claim for damages based on the alleged violation. As with similar prior proposals, this approach remains controversial and potentially difficult to implement. Opponents of such proposals note that mandating pre-litigation notice may be unavailing at best, if not actually misleading to businesses that would remain subject to immediate suit without prior notice under the ADA. The authors have therefore prudently chosen to pursue other approaches that they hope will be less acrimonious. Once any such additional approaches are added to the legislation, the authors have noted they will ensure the bill comes back to this Committee for further review. REGISTERED SUPPORT / OPPOSITION : Support Associated Builders and Contractors of California Building Owners and Managers Association of California California Association of Bed and Breakfast Inns California Automotive Business Coalition SB 1186 Page 13 California Asian Pacific Chamber of Commerce California Business Properties Association California Hotel & Lodging Association California Optometric Association California Restaurant Association City of Temecula Civil Justice Association of California (CJAC) County of San Bernardino International Council of Shopping Centers NAIOP of California, the Commercial Real Estate Development Association Opposition (as amended) Disability Rights Education & Defense Fund State Independent Living Council Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334