BILL ANALYSIS Ó SENATE JUDICIARY COMMITTEE Senator Noreen Evans, Chair 2011-2012 Regular Session SB 1186 (Steinberg & Dutton) As Amended August 30, 2012 Hearing Date: August 31, 2012 Fiscal: Yes Urgency: Yes NR PURSUANT TO SENATE RULE 29.10 SUBJECT Disability Access: Liability DESCRIPTION This bill would reduce statutory damages and provide litigation protections for specified defendants who timely correct construction-related accessibility violations of the Unruh Civil Rights Act. Specifically, this bill would: Cap statutory damages at $1,000, instead for $4,000, for any defendant who corrected all violations in the claim within 60 days of being served the complaint and was either (1) a defendant who had hired a certified access specialist (CASp) and met all applicable compliance standards, or (2) a person who had new construction or an improvement approved by the local building department on or after January 2008. Allow a small business defendant, as specified, to have minimum statutory damages reduced to $2,000 when that defendant corrects the violation within 30 days of being served the complaint. Allow any one of these defendants who promises to correct the violation within the specified time period to request an early evaluation conference (EEC) and grant that defendant an immediate stay of the proceedings. Additionally, this bill would require the court, in assessing statutory damages in a construction-related accessibility claim, to consider the reasonableness of the plaintiff's conduct in light of the plaintiff's obligation to mitigate damages in any action alleging multiple claims for the same (more) SB 1186 (Steinberg & Dutton) Page 2 of ? construction-related accessibility violation on different particular occasions. SB 1186 (Steinberg & Dutton) Page 3 of ? This bill would also: ban prelitigation "demands for money" and create rules for demand letters and complaints in claims involving construction-related accessibility violations; require any demand letter or complaint asserting a construction related accessibility claim to contain facts sufficient to allow the defendant to identify the basis for the claim, including an explanation of the specific access barrier the claimant encountered, and the date(s) of the violation(s); require any demand letter alleging a construction-related accessibility violation to be sent to the State Bar and the California Commission on Disability Access (CCDA), as specified; allow either party to request a mandatory evaluation conference (MEC) to be conducted by the court within 120 to 180 days of the request; require a property owner and/or lessor to notify the tenant, for any property leased after January 1, 2013, if the property has undergone a CASp inspection, and if so, whether the property meets all applicable construction-related standards; require the CCDA to promote and facilitate accessibility compliance, as specified; and require cities and counties to inform business licensees of their responsibilities to comply with accessibility laws, as specified, and promote compliance by sharing information regarding how to comply. Finally, this bill would add $1 to business license fees and similar instruments to pay for more local CASp, reduce costs of CASp testing and certification, and strengthen the CASp program, as specified. These collected monies would be split between local public entities and the Division of the State Architect, as specified. This bill would contain Legislative intent language, as specified. BACKGROUND Since 1969, persons with disabilities have enjoyed protection under Civil Code Sections 54 and 54.1, which entitle individuals with disabilities and medical conditions to full and free access to and use of roadways, sidewalks, buildings and facilities open to the public, hospitals and medical facilities, and housing. After Congress enacted the Americans with Disabilities Act (ADA) in 1990, the state made a violation of the ADA also a violation of SB 1186 (Steinberg & Dutton) Page 4 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. Additionally, under the Unruh Civil Rights Act, 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. (Civil Code Sec. 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 in no event less than $4,000, and any attorney's fees as the court may determine to be proper. (Civil Code Sec. 52.) The California Legislature has taken further steps to ensure disability access laws are complied with. 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 the 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). In 2003 and 2005, several bills were introduced after multiple lawsuits were filed 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, two bills were introduced relating to disability SB 1186 (Steinberg & Dutton) Page 5 of ? access. AB 2533 (Keene, 2008), SB 1766 (McClintock, 2008) would have both imposed prelitigation hurdles on plaintiffs claiming violations of construction-related disability access laws. Both of these bills failed in the Judiciary Committees of their respective houses. 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. That bill failed passage in this Committee. Alternatively, SB 1608 (Corbett et al., Ch 549, Stats. 2008), which took effect January 1, 2009, did not create any pre-litigation hurdles for a person with a disability but instead, among other things, provided for an early evaluation of a filed complaint if the defendant is a qualified defendant who 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. This bill seeks to further address the issue by enacting a comprehensive package of disability litigation reforms. When first heard in this Committee, this bill also contained language indicating the intent of the Legislature to examine the state and federal access laws, to facilitate compliance with these laws through increased education, and to examine measures that would lead to greater compliance to the benefit of both the business and the disability communities. Accordingly, the contents of SB 1186 relating to disability access that were heard and passed by this Committee on May 8, 2012 have been largely amended to effectuate that Legislative intent. CHANGES TO EXISTING LAW Existing federal law , 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.) Existing law 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 SB 1186 (Steinberg & Dutton) Page 6 of ? 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.) Existing law 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.) Existing law 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.) Existing law , the Unruh Civil Rights Act, declares 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.) Existing law 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.) Existing law 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 not SB 1186 (Steinberg & Dutton) Page 7 of ? required from a pro per plaintiff. (Civ. Code Sec. 55.3.) Existing law defines terms for a disability access action, specifically, existing law: defines a qualified defendant as a defendant in an action that includes an accessibility claim against 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 is pending a determination by a CASp; defines a certified access specialist whose inspection report would be the basis for a defendant to qualify for the early evaluation conference; defines the construction-related accessibility standard that a CASp would use to inspect and prepare a report on the place of public accommodation. With respect to this standard, the bill would provide that standards adopted in state law would be used unless standards under federal law are higher; and 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.) Existing law 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.) Existing law 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 standard 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 SB 1186 (Steinberg & Dutton) Page 8 of ? site in a way that may impact compliance with construction-related accessibility standards. (Civ. Code Sec. 55.53.) SB 1186 (Steinberg & Dutton) Page 9 of ? Existing law outlines the specific process to be followed when filing a disability access claim: 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; 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; 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; 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; directs the parties to appear in person at the time set for the conference; 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; 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; specifies that the court shall lift the stay when 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; specifies that the court may lift the stay at the conclusion of the EEC upon a showing of good cause by the plaintiff; 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 specifies the determinations the court would make at the EEC. (Civ. Code Sec. 55.54.) Existing law 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.) Existing law provides that the stay and early evaluation conference shall not be construed to invalidate or limit any SB 1186 (Steinberg & Dutton) Page 10 of ? 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.) Existing law 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.) Existing law 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.) This bill would reduce a defendant's minimum liability for statutory damages in a construction-related accessibility claim against a place of public accommodation as follows: to $1,000 for each violation 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 is either determined to be "CASp-inspected" or to "meet applicable standards", and there were no modifications or alterations that impacted compliance after the date of that determination; or to $1,000 for each violation 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 the structure or area of alleged violation was new construction or improvement that was approved and passed by the local building department after January 1, 2008, as specified; or to $2,000 for each 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. SB 1186 (Steinberg & Dutton) Page 11 of ? This bill would provide that defendants who meet the above criteria would be eligible for a mandatory stay of the proceedings and an early evaluation conference. This bill would 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. This bill would require an allegation of a construction-related accessibility claim in a demand letter or complaint to state facts sufficient to allow the defendant to identify the basis for the claim, including a plain language explanation of the specific access barrier(s) encountered or by which the plaintiff was deterred, with sufficient information to enable the defendant to identify that barrier. This bill would require that the plaintiff verify any complaint asserting a construction-related accessibility claim. This bill would define "demand letter" and require an attorney to provide a written advisory informing the potential defendant of his or her obligations and rights under the law with each demand letter or complaint, as defined, sent to or served upon a defendant for any construction-related accessibility claim. This bill would require the Judicial Council to update the form containing the advisory notice by July 1, 2013. This bill would define "demand for money" and prohibit prelitigation demands for money from, or at the direction of, an attorney including requests or demands for money, or offers/agreements to accept money. With respect to potential monetary damages, this bill would provide that a demand letter 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." This bill would require an attorney to include his or her State Bar license number in a demand letter, and, with the exception of legal services providers, to submit copies of the demand letter and complaints to the California Commission on Disability Access (CCDA) and demand letters to the State Bar, until January 1, 2016. The bill would provide that a violation of this requirement may subject the attorney to disciplinary action by SB 1186 (Steinberg & Dutton) Page 12 of ? the State Bar commencing on January 1, 2013. This bill would require the State Bar, commencing July 31, 2013, and annually each July 31 thereafter, to report specified information to the Legislature regarding the types and frequencies of the demand letters it receives. This bill would modify the duties and powers of the CCDA, as specified, and eliminate the biennial reporting requirement. The bill would instead provide that a priority of the CCDA is the development and dissemination of educational materials and information to promote and facilitate disability access compliance, including a requirement that the CCDA work with the Division of the State Architect (DSA) and the Department of Rehabilitation to develop educational materials for use by businesses. This bill would require the CCDA to compile data with respect to any demand letter or complaint and post that information on its Web site. The bill would also require the CCDA to post educational materials and information to assist business owners with compliance on its Web site. The bill would require the CCDA to report findings and data to the Legislature. This bill would require 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 Web site. This bill would require 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 CASp and the results of that inspection. This bill 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. This bill would require the State Architect, in administering CASp program, 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, SB 1186 (Steinberg & Dutton) Page 13 of ? civil engineer, or structural engineer, an application fee for certification that exceeds $250. 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, reduce costs of CASp testing and certification, encourage more private CASp, and strengthen the CASp program by enabling the DAS to develop procedures to maintain quality controls and develop best practices for the CASp program. The monies collected would be divided between local public entities and the DAS, as specified. This bill would also Legislative declarations and findings. COMMENT 1.Stated need for the bill Senator Steinberg, joint author of this bill writes: 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. Senator Dutton, joint author of this bill writes: SB 1186 is the culmination of months of hard work with staff and all the various stakeholders in the community. ŬThe bill] will not only provide a reasonable amount of time for small businesses to fix minor infractions, but will also help expand the California Access Specialist Program in California and provide any more tools for businesses to comply with this SB 1186 (Steinberg & Dutton) Page 14 of ? vital civil rights law. 2.Qualified defendants would be eligible for reduced statutory damages and specified procedural benefits This bill would reduce statutory damages and grant certain procedural benefits to qualified defendants for non-intentional violations of construction-related accessibility laws. In order to avail themselves of these advantages, a defendant must establish that he or she has corrected the alleged violation within 30 or 60 days of being served with the complaint, depending on the defendant. The author contends that the policy goal of this provision is to incentivize property owners to correct their violations, as opposed to settling the case and doing nothing, by reducing the minimum statutory damages and potential attorney's fees award to the plaintiff when they correct the violation. a) Three types of qualified defendants The first type of qualified defendant under this bill would be a defendant who had hired a certified access specialist (CASp) and met applicable compliance standards. The second type of qualified defendant would be a person who had new construction or an improvement approved by the local building department on or after January 1, 2008. Both of these defendants would be liable for minimum statutory damages of $1,000 per offense, instead of $4,000 per offense, when the defendant corrects the alleged construction-related accessibility violation within 60 days of being sued. The third type of qualified defendant under this bill would be a small business defendant, defined as having 25 or fewer employees and no more than $3.5 million in gross receipts. A small business defendant could have its minimum statutory damages liability reduced to $2,000 for each offense, instead of $4,000, in the event that it corrected an alleged physical accessibility violation within 30 days of being served the complaint. This bill would also allow procedural benefits for the above qualified defendants. Specifically, this bill would grant the option to request an early evaluation conference (EEC) and an immediate and mandatory stay of the SB 1186 (Steinberg & Dutton) Page 15 of ? 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 would freeze the litigation at the point of the court order, which arguably freezes the plaintiff's attorney's fees at that point. An EEC could be useful to end a case at an early stage, particularly when the defendant had corrected the asserted violation. SB 1186 (Steinberg & Dutton) Page 16 of ? b) Concerns raised by the opposition A number of disability rights organizations and advocates have written in opposition to this bill. The majority of the opponents are supportive of many provisions of the bill, but stand strongly opposed to reduced statutory damages, especially for businesses who have seemingly taken no prior steps to be in compliance with existing accessibility laws. Disability Rights California (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. ? 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." In response to the concerns that this bill will encourage businesses to wait to be sued the author writes: ŬIt] is a false assumption that this bill will simply encourage businesses to wait until they are sued and then fix. It is wrong because this remedy only applies to the fixes that can occur in 30 days. It is foolhardy for a small business to say, "I will just wait and be sued," because there is no guarantee that the violation can be fixed in 30 days, and if not fixed, he is liable for the full $4,000 in statutory damages plus the plaintiffs' attorney's fees which can be at least $5,000 per case and can be often much, much more than that. Many opponents have also pointed to the distinction between the small business qualified defendants and the other two types. These opponents note that while there may be some justification for lowering the statutory damages for the so SB 1186 (Steinberg & Dutton) Page 17 of ? called "good actors," or businesses who have made prior compliance efforts, that justification does not necessarily extend to all small businesses. The Certified Access Specialist Institute (CASI) argues that "offering reduced statutory damages and litigation protections to small businesses that do not hold a CASp report at the time the suit is filed undermines the Construction Related Accessibility Standards Compliance Act and does not encourage a small business to proactively comply with the ADA. SB 1186 proposes measures to inform a small business owner of the responsibility for a compliant facility (information received upon issuance or renewal of a business license and CASp report disclosure upon rent or lease). Accordingly, if the small business owner chooses not to proactively identify and correct compliance issues after being properly informed, then reduced statutory damages and litigation protections should not be a reward." Regarding the distinction between the different types of qualified defendants and the question of why the Legislature should reward small business defendants who have not taken proactive steps like the other qualified defendants, the author writes: The small business defendant provision is a compromise. It furthers the purpose of the ADA and good public policy to extend the reduced damages provisions to a large number of defendants who would not otherwise be incentivize to fix the violation. The bill recognizes that these defendants are different that the "good guy" defendant who in good faith relied on a CASp or building inspection approval, and so SB 1186 would only reduce the statutory damages to be reduced to $2,000, not $1,000, and gives them less time to fix. This provision is truly designed to assist small businesses to comply when they are sued for minor violations which can be fixed in 30 days, such as a parking sign without the tow operator's number. c) Intentional vs. unintentional actions by defendants This bill would authorize reduced statutory damages for qualified defendants only in the case of unintentional violations of access-related construction accessibility laws. Prior to 2009, there was a split of opinion on the issue of whether Unruh authorized minimum damages of $4,000 SB 1186 (Steinberg & Dutton) Page 18 of ? per violation even where there was no intentional discrimination. However, in Harris v. Capital Growth Investors XIV 52 Cal.3d. 1142 (1991), the California Supreme Court interpreted California Civil Code Section 52(a) as providing damages only in cases of intentional discrimination. The next year, the Legislature amended the Unruh Civil Rights Act. The Ninth Circuit found, relying on that amendment, that statutory damages were available regardless of any showing of intentional discrimination. (See Lentini v. California Ctr. For the Arts, 370. F.3d 837 (9th Cir. 2004.) The California Fourth District Court of Appeal declined to follow Lentini in a subsequent ruling, holding that when a violation of Unruh was premised on an ADA violation, statutory damages were only available where intentional discrimination was shown. (See Gunther v. Lin, 144 Cal.App.4th 223, 234 (4th Dist. 2006).) The split of opinion was settled in the California Supreme Court case of Munson v. Del Taco, Inc., 46 Cal.4th 661, which concluded that recovery of statutory damages for ADA violations under Unruh is permitted even if evidence of intentional discrimination is lacking. Accordingly, because this bill would authorize statutory damages absent a showing of intentional discrimination in construction-related accessibility claims, albeit reduced damages, it is arguably consistent with Munson. However, opponents of this provision argue that creating a new category of statutory damages for disability access violations singles this type of discrimination out as less egregious than other types of discrimination prohibited under Unruh. The Disability Rights Education & Defense Fund (DREDF) writes, "by reducing money damages for incidences of disability discrimination by public accommodations that are currently commonly available under the Unruh Act, SB 1186 creates a state-sanctioned policy that diminishes the rights of people with disabilities as compared with the rights of other protected minorities. This policy therefore confers second-class status on people with disabilities and that effect is unacceptable." In response to these concerns, the author writes: It is true that SB 1186 will reduce the statutory damages for an unintentional violation of the ADA when a defendant fixes the source of the discrimination (the access barrier), but as these statutory damages are not SB 1186 (Steinberg & Dutton) Page 19 of ? available to any other class under Unruh, it cannot be said that SB 1186 treats the disability community differently than other protected classes under Unruh. In fact, rather than to harmonize the standard for all classes under Unruh and thus treat everyone alike, this bill maintains the special right of persons victimized by a unintentional violation of the ADA to collect minimum statutory damages - which is not available to any other person who suffers the other forms of discrimination under Unruh. The amount, however, is reduced when the defendant corrects the violation within a certain amount of time after the complaint is filed. This is appropriate. 1.Provisions designed to limit risk of protracted litigation and excessively high damages claims This bill would allow either party to request a mandatory evaluation conference (MEC) conducted by the court within 120 days to 180 days of the request. The MEC would be available to any party, not only the qualified defendants discussed above (see Comment 2). At the MEC, the status of the case would be evaluated, and the current condition of the property at issue considered. The evaluator would also consider whether the defendant had made repairs or plans to make repairs, the asserted damages and attorney's fees of the plaintiff, and whether the case may be settled in whole or in part. The author notes that the mandatory court evaluation conference could assist in resolving the case at an early stage and promote compliance, whether because the defendant has corrected the violation or because the plaintiff is able to obtain injunctive relief. This bill would also require the court to consider the reasonableness of a plaintiff's conduct in light of his or her obligation to mitigate damages in any action involving multiple claims for the same construction-related accessibility violation on different occasions. According to the author, this provision is needed "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 $4,000 in statutory damages for each of the multiple claims. 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. SB 1186 (Steinberg & Dutton) Page 20 of ? 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." Staff notes that the uncodified intent language in the bill would arguably guide the court in addressing damages in cases where multiple claims are asserted for the same conduct on different occasions. Specifically, the uncodified language would state that 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. 2.Ban on demands for money and guidelines for demand letters This bill would prohibit demands for money from or at the direction of an attorney to potential defendants in construction-related accessibility claims. This bill would also create guidelines for what is appropriate in demand letters, and establish rules by which plaintiffs must indicate in demands and complaints the details, with specificity, surrounding the barriers which they encountered. The author contends that 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 inflated claim of damages or else incur greater liability and legal costs if a lawsuit is filed. a) Demands for money This bill would define "demand for money" as a prelitigation written document or oral statement that is issued to a building owner or tenant where a plaintiff alleges a construction related accessibility violation and makes a demand for money or an offer or agreement to accept money. This bill would ban these demands for money made by or at the direction of an attorney. In opposition, Californians for Disability Rights, Inc. (CDR) writes that "banning attorneys or others from demanding (or even initiating discussion) regarding SB 1186 (Steinberg & Dutton) Page 21 of ? attorney's fees recoverable and/or costs available under the ADA frustrates the ability of lawyers to adequately represent their clients and obtain rapid and cost effective settlement of all rights and remedies available to their clients without resort to litigation." In response the author writes, "right now, what we are seeing is defendants are choosing to settle rather than fixing. Faced with an automatic judgment of maybe $9,000 to $14,000, plus his own attorney's fees, many defendants are simply choosing to settle for perhaps $6,000 to $8,000 without fixing the violation. That is not good policy, and the law should not encourage that." Uncodified legislative intent language would further support the author's contentions and 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 erodes public support for and confidence in our laws. b) Demand letters and pleading requirements The bill would also give guidance on what contents are permissible in demand letters issued to potential defendants. Permissible demand letters alleging a construction-related violation or asserting a claim would be allowed to offer pre-litigation settlement negotiations, but may not include a specific request or demand for money. These letters would also be restricted from containing any specific potential monetary liability for any claim or claims, and may only assert "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." Furthermore, this bill would create more stringent pleading standards by requiring any demand letter or complaint asserting a construction-related accessibility claim to state facts sufficient to allow the defendant to identify the basis for the claim, including an explanation of the specific access barrier(s) the claimant encountered, the date(s) of the alleged violations, and the manner in which the barrier was encountered. The author writes that this pleading standard was 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, SB 1186 (Steinberg & Dutton) Page 22 of ? 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 order to address concerns raised before the Assembly Judiciary Committee that the specific pleading requirement may limit the ability of plaintiffs to draft a sufficient demand letter or claim, the bill was amended to require specificity in plain language only. Thus, under this bill, plaintiffs would not need to cite the actual code sections which have allegedly been violated in order to draft a legally valid letter or claim. Another provision adds the 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. 1.Cause for discipline; the State Bar retains prosecutorial discretion This bill would, for a three-year period, require a copy of any demand letter sent by or at the direction of an attorney to a potential defendant, alleging a construction-related accessibility violation to be sent to the State Bar and the California Commission on Disability Access (CCDA). For ease of identification, this bill would require that these letters contain the attorney's name and State Bar license number. Attorneys filing access violation claims would also be required to submit copies of those complaints to the CCDA. This bill would require the State Bar to review these demand letters, and 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 to accept money, would be cause for attorney discipline. The author notes that "even though certain acts shall be subject to discipline, the commencement of an actual disciplinary action is at the prosecutorial discretion of the State Bar's Office of Chief Trial Counsel. Nothing in the bill would require the Bar to bring an action for any offense, and it is certainly possible SB 1186 (Steinberg & Dutton) Page 23 of ? that the Bar may just send the lawyer offending the provision an advisory letter for a first violation. The bill further delays operation of the bar discipline provisions to January 1, 2013 to allow lawyers time to learn about and adjust to the new rule." Proponents of these provisions argue that this data collection is necessary to identify the unscrupulous attorneys who have been filing abusive construction-related accessibility claims against small businesses. Opponents argue that these requirements will chill the willingness of attorneys to represent disabled clients in these types of cases. Californians for Disability Rights, Inc. (CDR) writes: Bar reporting requirements, unrelated to any allegation of wrongdoing, will unquestionably have a chilling effect on rights of disabled people who act to preserve and advance their civil rights. The reporting proposals will also undermine the practices of many lawyers who have honorably and competently devoted much of their careers to the representation of people with disabilities. The chilling impact of unreasonable scrutiny applied to lawyers in the field of disability rights will make it likely that no young lawyer will be eager to be associated with the field of law. The Disability Rights Education and Defense Fund (DREDF) also opposes this provision, and argues that the "requirement that attorneys provide copies of demand letters alleging discrimination caused by violations of construction-related accessibility law by covered entities to the California State Bar for review, in effect segregates people with disabilities and their representatives into a separate and unequal category within the otherwise progressive Unruh Act." A number of amendments were taken in the Assembly Judiciary Committee which sought to address these concerns while maintaining that the State Bar collect information related to demand letters in these cases, in order to better prevent and discipline attorneys engaging in abusive practices. Specifically, those amendments exempted legal services providers, such as Legal Aid and other legal nonprofits, from the requirement of sending demand letters to the State Bar and the CCDA, and clarified the definition of "demand letter." As a result, only the initial demand letter must be sent to the State Bar, and not all correspondence between the two parties. Further, the author notes that while sending the demand letters would be required, "attorney discipline would not be mandatory, SB 1186 (Steinberg & Dutton) Page 24 of ? as the bill cannot interfere with the State Bar's prosecutorial discretion in determining whether or not to file a particular case." 2.Education, outreach, and funding This bill contains a number of provisions to increase compliance with accessibility laws in the state through education, funding, and strengthening of existing programs. Specifically, this bill would make it a priority of the California Commission on Disability Access (CCDA) to develop and disseminate information and educational materials to promote and facilitate disability access compliance. The bill would require the CCDA to work with other government agencies to gather, develop, and post education materials on its Web site. In furtherance of this directive, this bill would require the CCDA to tabulate information from the demand letters it receives (see Comment 5)-specifically the types and frequency of violations alleged. The CCDA would be required to compile a list of the top ten frequently alleged violations and post this information to its Web site. The CCDA would also be directed to report the compiled data to the Legislature. In response to concerns that many businesses who rent their premises do not know the compliance status of their property, this bill would also require the property owner and lessor to notify the tenant in a 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. The author indicates that 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. The author writes, "with fewer than approximately 230 private CASp to serve the State of California, a delayed operative date was deemed appropriate." In order to better fund existing programs, this bill would also require cities and counties to collect a $1 fee upon issuance or renewal of a business license or similar instrument to strengthen and fund the CASp program and enable the Division of State Architect (DSA) to develop audit procedures for the program, maintain quality control, develop "best practices" guidelines, and pay for development of more educational and SB 1186 (Steinberg & Dutton) Page 25 of ? training resources at state and local level to promote compliance. Monies collected with be split between local public entities and the DSA. The author argues: 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, $1,650 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. Finally, this bill would 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 administer the program. Also, this bill would reduce the application fee for a licensed architect, landscape architect, civil engineer, or structural engineer to a maximum of $250. 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; California Citizens Against Law Suit Abuse; California Council of the Blind; California Grocers Association; California Restaurant Association; County Building Officials Association of California; International Council of Shopping Centers; NAIOP of California, the Commercial Real Estate Development Association; Regional Council of Rural Counties; A number of individuals Opposition : California Foundation for Independent Living Centers; Disability Rights California; California for Disability Rights, Inc.; Disability Rights Education & Defense Fund; Independent Living Center of Southern California; A number of individuals HISTORY Source : Author SB 1186 (Steinberg & Dutton) Page 26 of ? Related Pending Legislation : None Known SB 1186 (Steinberg & Dutton) Page 27 of ? Prior Legislation : AB 2282 (Berryhill), which would have authorized an aggrieved person to bring a disability access suit only if: (1) the person has suffered an injury in fact; (2) the injury in fact was caused by the violation; and (3) the violation is redressable, was held under submission in the Senate Appropriations Committee. AB 1878 (Gaines), which is substantially similar to SB 1163 but applies to "microbusinesses," defined by the bill, failed passage in the Assembly Judiciary Committee. SB 1163 (Walters) would have established notice requirements for an aggrieved party to follow before he or she can bring a disability access suit and give the business owner a 120-day time period to remedy the violation. If the property owner cures the violation, the aggrieved party cannot receive any damages or attorney's fees, except for special damages. This bill failed passage in this Committee. SB 783 (Dutton, 2011), which was identical to SB 1163, failed passage in this Committee. SB 384 (Evans, Ch. 419, Stats. 2011) clarified that attorneys who file complaints or send demand letters related to disability access violations must provide a written notice of legal rights and obligations whether or not the attorney intends to file an action in state or federal court. SB 209 (Corbett & Harman, Ch. 569, Stats. 2009) required a CASp inspection report, to remain confidential rather than be under seal and subject to protective order. SB 1608 (Corbett et al., Ch. 549, Stats. 2008) See Background; Comment 6. SB 1766 (McClintock, 2008) See Background. AB 2533 (Keene, 2008) See Background. SB 855 (Poochigian, 2005) See Background. Prior Vote : Assembly Floor (Ayes 9, Noes 0) Assembly Committee on Appropriations (Ayes 17, Noes 0) SB 1186 (Steinberg & Dutton) Page 28 of ? Assembly Committee on Judiciary (Ayes 10, Noes 0) Senate Floor (Ayes 36, Noes 0) Senate Committee on Judiciary (Ayes 4, Noes 1) **************