BILL ANALYSIS Ó SB 1186 Page 1 Date of Hearing: August 28, 2012 ASSEMBLY COMMITTEE ON JUDICIARY Bob Wieckowski, Chair SB 1186 (Steinberg & Dutton) - As Amended: August 24, 2012 As Proposed to be Amended SENATE VOTE : 36-0 SUBJECT : DISABILITY ACCESS: COMPLIANCE AND LIABILITY KEY ISSUE : SHOULD THE LEGISLATURE ENACT NEW PROHIBITIONS AND LIMITATIONS ON CLAIMS ALLEGING VIOLATION OF DISABILITY DISCRIMINATION LAWS BY PLACES OF PUBLIC ACCOMMODATION IN RESPONSE TO CONCERNS THAT SOME BUSINESSES HAVE BEEN THE SUBJECT OF UNWARRANTED OR EXCESSIVE DEMANDS THAT MAY NOT ALWAYS LEAD TO CORRECTION OF THE CONDITION THAT CAUSED THE VIOLATION? FISCAL EFFECT : As currently in print this bill is keyed fiscal. SYNOPSIS This bill returns to the Committee for rehearing with substantial amendments following many hours of discussions with stakeholders over the past two months in an effort to reach consensus in a delicate and complex area of civil rights law regarding places of public accommodation and one that has both practical and symbolic significance for both business owners and the civil rights movement. As proposed to be amended the bill reduces the minimum statutory damages for unintentional violations by certain defendants, including all specified small businesses, provided that they fix the alleged violations. The bill also prohibits both written and oral demands for money by both lawyers and non-lawyers, and regulates the content and provision of demand letters, including that both demand letters and complaints be written with specificity, and the bill requires that demand letters and civil complaints be submitted to the State Bar of California and to the California Commission on Disability Access (CCDA). Supporters state that the bill will curb lawsuit abuse regarding the American's With Disabilities Act (ADA) while promoting increased compliance with disabled accessibility building codes throughout the state. Opponents representing disability rights advocates are concerned with the reduction of statutory damages for certain defendants, SB 1186 Page 2 particularly small businesses who have not necessarily made efforts to comply with longstanding anti-discrimination laws. Among other concerns, some opponents also raise objections to the regulation of demand letters and the requirements that demand letters and civil complaints be transmitted to the State Bar and the CCDA. SUMMARY : Seeks to promote compliance with the state's disability access laws without unwarranted litigation. Specifically, this bill : 1)Requires an attorney to provide a written advisory with each demand letter or complaint, as defined, sent to or served upon a defendant or potential defendant for any construction-related accessibility claim, as specified. 2)Requires an allegation of a construction-related accessibility claim in a demand letter, or any allegation of noncompliance with a construction-related accessibility standard in a complaint, to state facts sufficient to allow the defendant to identify the basis for the claim. 3)Prohibits a demand letter from including a request or demand for money or an offer or agreement to accept money. 4)Requires an attorney to include his or her State Bar license number in a demand letter, and to submit copies of the demand letter to the California Commission on Disability Access and, until January 1, 2016, to the State Bar. 5)Require, until January 1, 2016, an attorney to submit a copy of a complaint to the commission. The bill would provide that a violation of these requirements may subject the attorney to disciplinary action. 6)Requires the commission to review and report on the demand letters and complaints it receives until January 1, 2016. 7)Also requires the State Bar, commencing July 31, 2013, and annually each July 31 thereafter, to report specified information to the Legislature regarding the demand letters that it receives. 8)Permits other defendants to file a request for a court stay and early evaluation conference pursuant to this provision, SB 1186 Page 3 including (A) a defendant, until January 1, 2018, whose site's new construction or improvement on or after January 1, 2008, and before January 1, 2016, was approved pursuant to the local building permit and inspection process, (B) a defendant whose site's new construction or improvement was approved by a local public building department inspector who is a certified access specialist, and (C) a defendant who is a small business, as described. 9)The bill also would authorize a defendant who does not qualify for an early evaluation conference pursuant to these provisions, or who forgoes those provisions, to request a mandatory evaluation conference, as specified. The bill would authorize a plaintiff to make that request if the defendant does not make that request. 10)Require the court, in assessing liability in any action alleging multiple claims for the same construction-related accessibility violation on different particular occasions, to consider the reasonableness of the plaintiff's conduct in light of the plaintiff's obligation, if any, to mitigate damages. 11)Reduces a defendant's minimum liability for statutory damages in a construction-related accessibility claim against a place of public accommodation to $1,000 for each unintentional offense if the defendant has corrected all construction-related violations that are the basis of the claim within 60 days of being served with the complaint and other specified conditions apply, and would reduce that minimum liability to $2,000 for each unintentional offense if the defendant has corrected all construction-related violations that are the basis of the claim within 30 days of being served with the complaint and the defendant is a small business, as specified. 12)Requires the Department of General Services to make a biannual adjustment to financial criteria defining a small business for these purposes, and to post those adjusted amounts on its Internet Web site. 13)Requires a commercial property owner to state on a lease form or rental agreement executed on or after July 1, 2013, if the property being leased or rented has undergone inspection by a certified access specialist. SB 1186 Page 4 14)In administering the certified access specialist program, this bill would require the State Architect to periodically review its schedule of fees for certification under the program to ensure that the fees are not excessive. The bill would prohibit the State Architect from charging a California licensed architect, landscape architect, civil engineer, or structural engineer, an application fee for certification that exceeds $250. 15)Adds a state fee of $1 on any applicant for a local business license or similar instrument or permit, or renewal thereof, for purposes of increasing disability access and compliance with construction-related accessibility requirements and developing educational resources for businesses to facilitate compliance with federal and state disability laws, as specified. The bill would divide those moneys for the state between the local entity that collected the moneys and the Division of the State Architect, pursuant to specified percentages. The bill would create a continuously appropriated fund, the Disability Access and Education Revolving Fund, for the deposit of funds to be transferred to the Division of the State Architect, thereby making an appropriation. This bill would make an appropriation by authorizing local government entities to retain 70% of the fees imposed. 16)Revises and recasts the duties and powers of the California Commission on Disability Access, as specified, and eliminates the biennial reporting requirement. The bill would instead provide that a priority of the commission shall be the development and dissemination of educational materials and information to promote and facilitate disability access compliance, including a requirement that the commission work with the Division of the State Architect and the Department of Rehabilitation to develop educational materials for use by businesses. The bill would require the commission to post specified information on its Internet Web site, including, but not limited to, educational materials and information that will assist business owners. The bill would require the commission to report to the Legislature on its implementation by a specified date. The bill would require the commission to compile data with respect to any demand letter or complaint sent to the commission, and post that information on its Internet Web site. SB 1186 Page 5 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 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 SB 1186 Page 6 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 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.) SB 1186 Page 7 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) 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 SB 1186 Page 8 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 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 SB 1186 Page 9 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 : In support of the bill the author's state: "SB 1186 is a compromise that applies a common sense approach to resolve difficult issues. It maintains the hard-fought civil rights of the disabled community while helping to protect California businesses from predatory demand for money letters and lawsuits. Support for important laws like the Unruh Act and the Americans with Disabilities Act are weakened when those laws are abused for personal gain. This measure bans the unscrupulous practice of 'demand for money' letters, stops the stacking of claims based on alleged repeat violations to force a business into a quick settlement, while encouraging businesses to fix their violations to comply with the law. Thus, SB 1186 provides some relief to businesses who show good faith in trying to follow the law and are willing to correct the violation, which ultimately promotes compliance and brings greater access to the disabled community." 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 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 SB 1186 Page 10 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). This Bill Would Prohibit Issuing Pre-Litigation Demands For Money And Regulate Other Demand Letters As Well As Oral Statements By Both Attorneys and Non-Attorneys. SB 1186 would ban oral and written pre-litigation "demands for money," and create rules for demand letters and complaints in claims involving a construction-related accessibility violation. According to the authors, these provisions are needed to respond to evidence showing that a very small number of plaintiff's attorneys have been abusing the right of petition under Section 52 and Section 54.3 of the Civil Code, by issuing a demand letter to a business that the business pay a quick settlement of the attorney's often inflated claim of damages or else incur greater liability and legal costs if a lawsuit is filed. Unusually, the bill also applies to non-attorneys, and covers both written and oral statements that a customer might make to a business owner. Assuming that these rules pass constitutional muster as permissible regulation of speech, the bill makes clear that only attorneys face a prospect of punishment for a SB 1186 Page 11 violation. Non-lawyers would not be subject to suit for violating the demand-for-money and demand letter regulations discussed below, and thus it would be inappropriate for a business owner or others to threaten litigation against a non-lawyer for alleged violation of these provisions. The bill would ban pre-litigation demands for money, where the plaintiff alleges a construction-related accessibility violation and makes a request or demand for money or an offer or agreement to accept money. The bill would also provide that a demand letter alleging a construction-related violation or asserting a claim may offer pre-litigation settlement negotiations but may not include a specific request or demand for money. It also may not state any specific potential monetary liability for any assert claim or claims, and may only state "The property owner or tenant, or both, may be civilly liable for actual and statutory damages for a violation of a construction-related accessibility requirement." Uncodified legislative intent language would further express the Legislature's policy that the abusive use of the right to petition under Section 52 and Section 54.3, does not promote compliance with the accessibility requirements and erode public support for and confidence in our laws. New Pleading With Specificity Requirement For Demand Letters And Complaints. The bill would require any demand letter or complaint asserting a construction-related accessibility claim to state facts sufficient to allow identification of the basis for the claim. The requirement is that the alleged violations supporting the claim be described with some specificity but without the need to make averments with special language or precision, such as a lawyer might employ, in light of the fact that this standard is designed to be satisfied by non-lawyers. This particularly provision is designed to deter the use of form demand letters and complaints by so-called "mill" attorneys who assert hundreds of the same or nearly identical claims, often for the same client against different businesses. The requirement is also intended to address the inappropriate "stacking" of multiple claims by requiring a description of each alleged violation instead of the use of a generalized form letter or complaint alleging any number of multiple violations without more specificity. In the Magic Real Estate case, the attorney simply that the plaintiff "would have patronized said facility on at least 30 occasions during Ýthe preceding year]" SB 1186 Page 12 without any greater specificity. A further provision adds a requirement that any complaint alleging a construction-related accessibility violation must be verified by the plaintiff. This provision is in response to the practice of at least one attorney asserting and filing claims without the claimant's knowledge or authorization. State Bar Review Of Demand Letters; Violation Of Demand Letter And Demand For Money Provisions Would Be Grounds For Attorney Discipline. SB 1186 would, for a three-year period, require any demand letter alleging a construction-related accessibility violation to be sent to the State Bar. For easier identification, the bill would also require the demand letter to include the attorney's State Bar license number. SB 1186 would provide that a violation of the ban on making a demand for money in a construction-related accessibility claim, or for sending a demand letter which makes a request or demand for money or an offer or agreement to accept money would be cause for attorney discipline. Attorney discipline, however, would not be mandatory as the bill cannot interfere with the State Bar's prosecutorial discretion in determining whether or not to file a particular case. California Commission On Disability Access (CCDA) To Receive Copies Of Complaints And Demand Letters And To Tabulate Data On Top Ten Types Of Violations Alleged. SB 1186 would require a copy of any attorney demand letter or complaint in state or federal court which alleges a construction-related accessibility violation to be sent to the CCDA. The CCDA would be directed to tabulate the types and frequency of violations alleged and to compile a list of the top ten frequently alleged violations which would be posted on its website. The CCDA would also be directed to report to the Legislature the tabulated data. This information will provide empirical data to policymakers about disability access and compliance issues. It would also provide information to property owners about the most common accessibility violations alleged in demand letters and complaints so that they might take steps to protect themselves from those frequent claims. Reduced Statutory Damages And Procedural Benefits For Defendants. One of the most significant features of the bill with strong support from business advocates is the new SB 1186 Page 13 subdivision (f) to be added to Section 55.56, which provides reduced statutory damages and certain procedural benefits to certain defendants for non-intentional violations. In order to avail themselves of these advantages, a defendant must establish that it has corrected the alleged violation within either 30 or 60 days of being served with the complaint, depending on the defendant. This period is intentionally short because it is designed to be available for relatively less-extensive violations and is not subject to enlargement. A defendant who had hired a certified access specialist (CASp) and had met applicable compliance standards, or a person who had new construction or an improvement approved by the local building department on or after January 1, 2008, would be liable in minimum statutory damages of $1000 per offense, instead of $4000 per offense, when the defendant corrects the alleged construction related accessibility violation within 60 days of being sued. Also, a small business defendant (defined as having 25 or fewer employees and no more than $3.5 million in gross receipts) could have its minimum statutory damages liability reduced to $2000 for each offense, instead of $4000, when it corrects an alleged physical accessibility violation within 30 days of being served the complaint. However, the provisions would not apply to reduce statutory damages where the violation was intentional. The amendments revising the definition of "intentional" are designed to broaden, not negate, the one previously identified example. Also, new subdivision (f) would not affect the availability of actual damages or the treble actual damages or attorney's fees. For the defendants who satisfy the requirements of section 55.56(f), the bill would also grant the option to request an early evaluation conference (EEC) and an immediate mandatory stay of the proceedings, similar to the litigation protections now given to a qualified defendant who had hired a CASp to inspect the property and issue a report on its compliance status. A mandatory stay freezes the litigation at the point of the court order, which serves to freezes the plaintiff's attorney's fees at that point. An EEC could be useful to end the case at an early stage, particularly when the defendant has corrected the asserted violation. The authors state that the policy goal of new subdivision (f) is to incentivize property owners to correct their violations, as opposed to settling the case and doing nothing, by reducing the SB 1186 Page 14 minimum statutory damages. Revised Advisory Notice to Defendants and Recipients of Demand Letters. The bill also expands and strengthens the existing advisory notice that recipients of civil complaints and demand letters to provide information regarding the new rights and restrictions under the bill. As with notification to the State Bar and CCDA, these notices are to be sent once at the outset and do not need to be re-sent in the same dispute unless new claims are asserted. New Provisions To Prevent Stacking Of Multiple Claims To Increase Statutory Damages. New subdivision (h) is added to Section 55.56 to address the so-called "stacking" problem. This occurs when the plaintiff is allegedly deterred by the same construction-related accessibility violation on different occasions and thereby asserts a claim of $4000 in statutory damages for each of the multiple claims. According to the authors, the most egregious example is the Mundy v. Magic Real Estate case, where the person asserted 30 violations over a short period of time (less than 30 days reportedly) and sought $120,000 in statutory damages. While the obligation to mitigate damages under current law would likely result in a much lower award in a court trial, the mere threat of multiple stacked claims and the purported minimum statutory damages based on multiple claims is intimidating to many property owners who are pressured to quickly settle for lesser damages. New subdivision (h) would state in the law that in assessing statutory damages in a deterrence claim, the reasonableness of the plaintiff's conduct in light of the plaintiff's obligation (if any) to mitigate damages must be considered by the court in any action alleging multiple claims for the same construction-related accessibility violation on different particular occasions. Uncodified intent language states that this new provision reiterates that where multiple claims are asserted for the same conduct on different occasions, a plaintiff must have a reasonable explanation for the asserted need for multiple visits to a site where a known barrier violation would deny full and equal access, in light of the obligation to mitigate damages. The uncodified intent language recognizes also that a case involving multiple claims for the same violation may be appropriate where there is a reasonable explanation, and there are clear instances where the needs of a person with a disability and circumstances may make any mitigation futile or SB 1186 Page 15 impossible. Mandatory Evaluation Conference At Option Of Either Defendant Of Plaintiff. This bill would allow either party to request a mandatory evaluation conference (MEC) conducted by the court within 90 days to 120 days of the request. Similar to the EEC under existing law, the MEC would evaluate the status of the case and consider the current condition of the property and whether the defendant has made repairs or plans to make repairs, what are the asserted damages and attorney's fees of the plaintiff, and whether the case can be settled in whole or in part. While these defendants would not be eligible for the court stay of the proceedings, the mandatory court evaluation conference could assist in resolving the case at an early stage and promoting compliance, whether because the defendant has corrected the violation or because the plaintiff is able to obtain injunctive relief. This Bill Would Require Commercial Property Owners To Provide Casp-Inspection Notice In Leases. This bill will require property owner and lessor to notify the tenant in the lease form or rental agreement executed on or after July 1, 2013, whether the property being leased or rented has undergone inspection by a CASp, and if so, whether the property has been or has not been determined to meet all applicable construction-related accessibility standards. This provision responds to concerns that many businesses who rent their premises do not know the compliance status of their property. Many would comply if they knew, but many just do not know, it is asserted. By specifically providing the knowledge on which they can choose to act, it is hoped that many violations can be avoided or be subject to lower statutory damages. The delayed operative date is intended to allow property owners who wish to offer a CASp reviewed property for rental to obtain a CASp inspection if they have not already done so. With fewer than approximately 230 private CASp to serve the State of California, a delayed operative date was deemed appropriate. Required Information Regarding Disability Access Compliance To Businesses Upon Renewal Of Business License. As part of the effort to educate businesses of their obligations under the law with respect to disability access, this bill would require a SB 1186 Page 16 city, county, or city or county, to inform the licensee that under federal and state law, compliance with disability access laws is a serious and significant responsibility that all applies to all California building owners and tenants with buildings open to the public. The bill would further require the local entity to inform the licensee that information about the compliance requirements and how to comply is available at various state agencies, and to list the website addresses of those agencies. New $1 Fee To Business License Fee To Strengthen Casp Program And Develop Educational And Training Resources At State And Local Level To Promote Compliance. This bill would require cities and counties to collect a $1 fee upon issuance or renewal of a business license or similar instrument to pay for more CASp in local building departments, to reduce costs of CASp testing and certification to encourage more private CASp, to strengthen the CASp program by enabling the Division of State Architect (DSA) develop audit procedures for the CASp program to maintain quality control, develop "best practices" guidelines, and pay for development of more educational and training resources at state and local level to promote compliance. Monies collected with be split 70% to locals/30% to DSA. Local public entities could use 5% of monies for admin costs and the rest would go to pay for hiring and training of more CASp for local building departments. The other 30% would go to newly created Disability Access and Education revolving fund in DSA for the purposes noted above. Getting more public and private CASp is essential to promoting compliance and helping businesses, particularly those in older buildings, comply and avoid lawsuits. Currently, only about 450 CASp, split evenly between private and public employment, serve the needs of all of California. High costs of certification and examination, $1650 for a three year certificate, has been a significant hurdle. This $1 fee proposal is intended to help fund more public and private CASp and make the program stronger. Some funds will also be spent on state and local educational programs to assist building owners understand and meet their compliance obligations. The bill would also require the State Architect to periodically review its CASp certification and examination fees to ensure they are not excessive, while still covering the cost to SB 1186 Page 17 administer the program. Also, the bill reduces the application fee for a licensed architect, landscape architect, civil engineer or structural engineer to a maximum of $250. The only work is required to verify that they are qualified to take the CASp examination is to verify that they are licensed. The current $500 fee is a significant disincentive for these professionals to become a CASp. ARGUMENTS IN SUPPORT : Indicative of the bill's supporters is the following statement in support by a coalition of business groups, including the California Business Properties Association, the California Building Industry Association, the California Chamber of Commerce and the California Restaurant Association: This measure seeks to curb lawsuit abuse regarding the American's With Disabilities Act (ADA) while promoting increased compliance with disabled accessibility building codes throughout the state. A "win-win" situation for the State of California. Please be advised that the groups listed above are in strong support of SB 1186 as co-authored by Senator Darrell Steinberg and Senator Bob Dutton. We collectively extend our thanks to the authors and their staffs for the substantial amount of time and effort put forth on this effort over the past four months. ARGUMENTS IN OPPOSITION : The bill has received opposition from a number of disability rights organizations and individual advocates. Disability Rights California states that is opposed unless amended because the bill includes a provision which will reduce statutory damages for small businesses who have not taken any proactive steps to comply with federal or state access laws. DRC writes: We believe there are many provisions in SB 1186 that advance the good public policy of promoting access to places of public accommodation, such as rental agreements and business license renewal notifications to businesses about access requirements. We are encouraged by the $1.00 business license renewal fee which will increase the number of Certified Access Specialists in local planning and building departments, and thereby ensure better compliance with long-standing access laws. We also support giving SB 1186 Page 18 businesses incentives, such as reduced damages and early evaluation conferences, for proactive attempts to make their facilities accessible to people with disabilities. However, our Board does not support providing damage reductions to businesses that have not made any proactive attempts to make their facilities accessible. We believe this is poor public policy and gives incentives to businesses to wait until they are sued to make corrections. California access laws and policies have been in effect for decades and we are troubled that full compliance by businesses still falls significantly short of what is required. Because compliance is so often dependent on individual complaints and lawsuits, provisions that restrict damages for businesses that wait until they are sued to comply does not meaningfully advance our mutual public policy goal of full, free use, and enjoyment of public facilities and accommodations The California Foundation for Independent Living Centers (CFILC) representing 22 organizations statewide states in part: CFILC has been an active participant in a work group comprised of representatives of the disability community and various business associations convened by the authors. The work group was asked to readdress the problems caused by abuses in the filing of lawsuits for alleged violations of physical accessibility requirements under the Americans with Disabilities Act (ADA) and state law. These abuses stem from the practices of a handful of plaintiff and defense attorneys who have been filing or defending, respectively, the submission of multiple demands of monetary settlement demand letters to business owners alleging violations of the ADA and state laws relating to the physical accessibility standards for places of public accommodations. These are issues previously addressed by reforms enacted by SB 1608 (Corbett) of 2008. Over the course of several months, the work group met and examined various proposals that would deter abusive practices and that would hold these attorneys accountable for professional discipline. CFILC strongly believes that, despite the best intentions of the authors, the evaluation process was not given adequate time to produce a truly fair SB 1186 Page 19 outcome for the disability community. Many of the proposals included in the most recently amended version of SB 1186 are also strongly opposed by disability rights organizations that litigate on behalf of people with disabilities. CFILC does not litigate cases involving alleged violations of physical accessibility requirements. However, to the extent that they state valid reasons for opposing various reforms, we wish to formally associate our position with the arguments to be posed by Disability Rights California, the Disability Rights Defense and Education Fund, and Californians for Disability Rights. We will focus our attention to our objections in this letter to specified amendments to SB 1186. They would authorize significant reductions in the statutory damages allowed under the state Unruh Civil Rights Act. These are statutory damages that otherwise would be available to people with disabilities seeking to enforce their civil rights under the ADA and state law. CFILC has long considered Senator Steinberg to be a strong supporter of the rights of people with disabilities. However, we believe that the proposed reductions in statutory damages go too far in unnecessarily infringing upon the rights of people with disabilities. The overwhelming majority of persons who are denied access to places of businesses have had nothing to do with the underlying problems caused by these attorneys. Nevertheless, based upon questionable public policy grounds, we are being asked to bear a burden and forfeit some of our vested statutory rights. CFILC most strongly objects to a provision to reduce a plaintiff's statutory damages from $4,000 to $2,000 per violation in cases for a "small business." This is defined as one having 25 or fewer employees and no more than $3.5 million in gross receipts. In these cases, the reduction in statutory damages would be allowed if the defendant agrees to fix and actually fixes the violations within 30 days after being served the complaint. If this does not occur, the court would be able to hold the small business owner liable for the full $4,000 if the violation is not fixed within the 30-day time period. SB 1186 Page 20 This concept undermines many of the provisions of SB 1608 that identified a number of ways to encourage voluntary compliance. Many of these business owners would have incentives to postpone any remediation of a violation until such time as the aggrieved party actually files a lawsuit. This is problematic because all too many of these individuals with disabilities are already reluctant to go to the trouble of filing a lawsuit. In addition, we believe that this erosion of the right to statutory damages sets a dangerous precedent for further future reductions in the rights of people with disabilities, at a time when those rights are already are under constant attack at the national, state, and local levels. We can easily foresee that the business community will come back to the Legislature to ask for an extension to 60 days, 90 days, 180 days, or more after asserting that the 30-day period is an inadequate period of time to fix a violation. SB 1186 would also allow a court to reduce a plaintiff's statutory damages from $4,000 to $1,000 per violation where it was determined that the defendant had acted in good faith to make their building or facility accessible. It would arise in situations where the defendant had contracted for a CASp report that found it to be in compliance, or where there was new construction or improvements to an existing structure that were approved by a local building department. The defendant would then have to fix the violation within 60 days after being served. These two provisions are relatively less objectionable because they would at least require a demonstration of an intention to act in good faith and the violation was assumed to not exist based upon reasonable reliance on a CASp report or the actions by a local building department. Nevertheless, , we are still concerned that these provisions once again are placing the burden of solving these problems at the expense of the rights of people with disabilities who are denied access. It presumes that there is an adequate dollar figure that adequately compensates a person denied access for the emotional and psychological harm for having their rights to equal access denied. There is also a presumption that those feelings are somehow worthy of even less compensation if the defendant fixes a SB 1186 Page 21 violation within 60 days. We understand that the authors genuinely believe that small business owners would have incentives to apply the expenses otherwise paid for statutory damages to actually fixing the violation voluntarily. However, there is no evidence that such an outcome would be achieved, so we challenge whether such a change is supportable by sound public policy considerations. We do not see any such grounds sufficient legally and morally to permit yet another intrusion into the statutory rights of people with disabilities. It is also noteworthy that the reduction of statutory damages available to small business owners, as defined, does not even require the same level of good faith and reliance upon a report issued for the purpose of evaluating compliance with accessibility standards. We also have concerns about the precedent set by these additional provisions and fully expect that an extension of the 60-day period will come up again and again in future sessions of the Legislature. The Disability Rights Education & Defense Fund (DREDF) opposes the bill. An excerpt of DREDF's letter makes the following points: 1186 creates a disincentive for businesses to comply with the Americans with Disabilities Act (ADA). Reduced Unruh Act damages for individuals with disabilities signals that California does not consider discrimination based on disability as egregious as other forms of discrimination. Prohibition on pre-litigation demand for money creates barriers to enforcement. State Bar and California Commission on Disability Access notification segregates people with disabilities and their representatives into a separate and unequal category within the otherwise progressive Unruh Act. Californians for Disability Rights, Inc. (CDR) states that it strongly opposes SB1186, as drafted. Among the points raised in opposition, CDR states: SB 1186 Page 22 The "no demand for money" provisions of SB 1186 violate the First Amendment to the United States Constitution and will also be preempted by the Americans with Disabilities Act of 1990. The "no demand for money" ban violates the First Amendment The attempt to ban "demands for money" would, as written, be preempted because this ban conflicts with and limits rights under the Americans with Disabilities Act of 1990. Threatening attorneys with discipline and forcing them to report for scrutiny by the State Bar or the CCDA for advancing their client's rights creates a violation of section 503 of the Americans with Disabilities Act. We do not believe the Legislature should draw out one class of persons protected by the Unruh Act and limit their damages for acts of discrimination. Basing a reduction of damages because a violator of civil rights law consulted a professional is a radical and dangerous proposition. Post litigation behavior should never be rewarded. This radical departure from current law is being undertaken without a reasonable period to review the proposed language and object. Proposed section 55.56(f) will degrade an already beleaguered CASp program. REGISTERED SUPPORT / OPPOSITION (as amended) : Support American Institute of Architects, California Council Building Owners and Managers Association of California California Apartment Association California Building Industry Association California Building Officials California Business Properties Association California Chamber of Commerce SB 1186 Page 23 California Council of the Blind California Grocers Association California Restaurant Association International Council of Shopping Centers NAIOP of California, the Commercial Real Estate Development Association Regional Council of Rural Counties Oppose California Foundation for Independent Living Centers The Certified Access Specialist Institute Disability Rights California California for Disability Rights, Inc. Disability Rights Education & Defense Fund A number of individuals Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334