BILL ANALYSIS Ó AB 54 Page 1 Date of Hearing: April 21, 2015 ASSEMBLY COMMITTEE ON JUDICIARY Mark Stone, Chair AB 54 (Olsen) - As Amended March 16, 2015 SUBJECT: PUBLIC ACCOMMODATIONS: CONSTRUCTION-RELATED ACCESSIBILITY CLAIMS KEY ISSUES: 1)SHOULD A PERSON WHO IS DENIED FULL AND EQUAL ACCESS TO A PLACE OF PUBLIC ACCOMMODATION IN VIOLATION OF THE UNRUH CIVIL RIGHTS ACT BECAUSE OF A CONSTRUCTION-RELATED ACCESSIBILITY STANDARD WHICH HAS CHANGED IN THE PAST THREE YEARS BE REQUIRED TO COMPLETE A PROCEDURAL HURDLE BEFORE FILING A LAWSUIT --NOTIFYING THE OWNER, AGENT, OR OTHER PARTY RESPONSIBLE FOR THE PREMISES ABOUT THE VIOLATION -- THAT NO OTHER VICTIM OF DISCRIMINATION IN VIOLATION OF THE UNRUH CIVIL RIGHTS ACT IS REQUIRED TO COMPLETE? 2)SHOULD A PERSON WHO IS DENIED FULL AND EQUAL ACCESS TO A PLACE OF PUBLIC ACCOMMODATION BASED UPON A VIOLATION OF A CONSTRUCTION-RELATED ACCESSIBILITY STANDARD WHICH HAS CHANGED IN THE PAST THREE YEARS BE PRECLUDED FROM BRINGING A COMPLAINT AGAINST THE OWNER OR OPERATOR OF THE PLACE OF PUBLIC ACCOMMODATION BASED UPON THE VIOLATION IF THE OWNER CORRECTS THE VIOLATION WITHIN 60 DAYS OF NOTICE ABOUT THE VIOLATION? 3)DOES THIS MEASURE, IN ITS EFFORT TO PROVIDE RELIEF TO SMALLER BUSINESSES THAT FEEL THEY ARE UNFAIRLY SUBJECT TO LAWSUITS UNDER OUR DISABILITY DISCRIMINATION LAWS, INADVERTENTLY AND UNFAIRLY SINGLE OUT PEOPLE WITH DISABILITIES BY FORCING THEM AB 54 Page 2 TO OVERCOME ADDITIONAL AND SUBSTANTIAL NEW BARRIERS TO THE ENFORCEMENT OF THEIR CIVIL RIGHTS AND BY DENYING REMEDIES TO VICTIMS OF DISABILITY DISCRIMINATION? 4)SHOULD A BUSINESS OWNER WHO SPENDS MONEY TO BRING A PLACE OF PUBLIC ACCOMMODATION INTO COMPLIANCE WITH CONSTRUCTION-RELATED ACCESSIBILITY STANDARDS BE GRANTED A TAX CREDIT FOR UP TO 50 PERCENT OF THE EXPENDED FUNDS, NOT TO EXCEED 250 DOLLARS? SYNOPSIS There are two main provisions of this bill. One enacts a notice and right to cure procedure similar to ones that have been repeatedly rejected by the Legislature in recent years: prior to filing a lawsuit alleging a construction-related accessibility claim based upon a denial of access to a place of public accommodation, the plaintiff must somehow notify some person who is responsible for the premises and give the owner of the facility an opportunity to correct the violation within the next 60 days. The distinguishing feature about this bill's version of notice and right to cure is the fact that it is limited to those construction-related accessibility standards which have changed within the past three years. This aspect of the bill is not only controversial and the reason why the bill is opposed by groups which advocate for the rights of the disabled, who argue that it imposes an onerous requirement on the victims of just one form of discrimination, but it also presents a number of logistical problems. This provision requires a disabled plaintiff to know which construction-related accessibility standard caused the denial of their access to the public accommodation and whether it has changed within the past three years; if so, to identify the owner of the public accommodation which has discriminated against them; provide written notice of their allegation that they were denied access, with "facts sufficient to allow a reasonable person to identify the basis of the construction-related accessibility claim;" wait at least 60 days after providing this written notice to verify whether the violation has been remedied; and if so, they are prohibited from either filing a complaint, collecting damages, or being AB 54 Page 3 reimbursed for legal fees. Likewise, if notice is not provided or is inadequate, the disabled person has no legal remedy, even if the public accommodation is in clear violation of Unruh. The other main provision is a tax credit for the owner of a business that is a public accommodation who spends money to hire a certified access specialist to advise the owner about how to bring the business into compliance with construction-related accessibility standards. It is similar to, and really an expansion of, an existing tax credit which allows the owner of a business that is a public accommodation to claim a tax credit of up to half of the expended funds, not to exceed 250 dollars, for the construction costs of bringing the facility into compliance with construction-related accessibility standards. This provision is non-controversial and is likely supported by both the business groups that are in support of the bill, as well as the groups advocating for the rights of the disabled, that oppose it. According to the author, the bill is necessary because many small businesses are out of compliance with longstanding state and federal disability access laws, leaving them vulnerable to lawsuits. Some of these suits, the author and supporters allege, are brought by plaintiffs for personal financial benefit, not out of an altruistic desire to improve disability access for disabled consumers, and some of these suits are brought against businesses that are willing to comply but are hampered by the complexity of the law. Disability rights advocates oppose the bill, but they agree with the supporters on a number of points, including that many businesses are not in compliance with access laws despite their long duration and that many lawsuits are filed, some by plaintiffs seeking monetary recovery. Opponents argue that they have supported prior legislation to increase business awareness of access obligations, improve voluntary compliance, and reward responsible behavior and those reforms should be furthered, not circumvented. Opponents argue that this bill singles out people with disabilities for unprecedented obstacles to the enforcement of civil rights, deprives them of a remedy for actual violations, and will deter, not encourage, compliance with AB 54 Page 4 disability discrimination law. Moreover, opponents state that the promise of the bill may be misleadingly unattainable because the requirements it would impose are inconsistent with federal disability discrimination law and therefore would not preclude the law suits from which businesses seek protection. Unlike two prior measures, SB 1608 (Corbett and Harman) of 2008 and SB 1186 (Steinberg and Dutton) of 2012, historic bipartisan and bicameral measures to reduce disability access violations and unnecessary lawsuits, this bill is not the result of open stakeholder meetings and mutual compromise. Rather, it reflects no input from disabled advocates or amendments as a result of its harsh impact on disabled citizens and their rights. This bill is supported by business groups, including the California Chamber of Commerce and the Civil Justice Association of California, and opposed by disability rights advocates, including Disability Rights California and the American Civil Liberties Union of California. SUMMARY: Provides that statutory damages recovered in a construction-related accessibility claim against a place of public accommodation resulting in a denial of full and equal access to the place of public accommodation that is based upon a violation of a construction-related accessibility standard which has changed within the past three years can only be recovered by that plaintiff under certain conditions and allows business owners who spend money to bring a place of public accommodation into compliance with construction-related accessibility standards a tax credit of up to 250 dollars. Specifically, this bill: 1)Requires that at least 60 days prior to bringing a claim for damages based upon a violation of a construction-related accessibility standard which has changed within the past three years, the plaintiff must provide a written notice regarding the violation to the owner, agent, or other party responsible for the place of public accommodation where the alleged violation occurred. 2)Requires that the written notice of the violation must do one of the following: AB 54 Page 5 a) State facts sufficient to allow a reasonable person to identify the basis of the construction-related disability claim and state that the recipient of the notice may be civilly liable for actual and statutory damages for a violation of a construction-related accessibility requirement if the access barriers that constitute the basis of the construction related accessibility claim are not removed within 60 days; b) Offer, in a written demand letter, pre-litigation settlement negotiations in accordance with Section 55.31. 3)Prevents any claim for damages based upon the denial of the plaintiff's access to the place of public accommodation if the barriers that are alleged to have prevented the plaintiff's access to the accommodation and which are described in a written notice meeting the above criteria, are removed within 60 days of the date when the written notice is provided to the owner, agent, or other party responsible for the place of public accommodation where the alleged violation occurred. 4)Allows a business owner who hires a certified access specialist (CASp) to advise the owner about how to provide access to disabled customers and come into compliance with construction-related accessibility standards to claim a tax credit for up to half of the expended funds paid to the CASp, not to exceed two hundred and fifty dollars ($250). 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)Pursuant to the Unruh Civil Rights Act (Unruh), provides that all persons, regardless of sex, race, color, religion, ancestry, national origin, disability or medical condition, AB 54 Page 6 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. (Civil Code Section 51 et seq. All further statutory references are to the California Civil Code, unless otherwise indicated.) 3)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. (Section 54.) 4)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. (Section 54.1.) 5)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 injunctive and actual damages - plus treble actual damages but not less than $1,000, and attorney's fees as the court deems proper. (Section 55.) 6)Provides the California Commission on Disability Access (Commission), an independent state agency composed of 19 AB 54 Page 7 members, with general responsibility for monitoring disability access compliance in California, and with authority to make 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 letter or a complaint on a defendant alleging a construction-related accessibility claim or noncompliance, to provide a written advisory with each demand letter or complaint, as defined. The written advisory shall include information about 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. The written advisory is only required from any attorney, and not from a pro per plaintiff. (Section 55.3.) 8)Requires an attorney alleging the construction-related accessibility claim or noncompliance to state facts sufficient to allow the defendant to identify the basis for the claim. (Section 55.31.) 9)Prohibits such a demand letter from including a request or demand for money or an offer or agreement to accept money unless the claim involves a physical injury and special damages. After receiving a duly-provided demand letter, a building owner, tenant, authorized agent or employee may request a settlement figure or specification of damages. Upon such a request, an attorney may present a settlement figure or specification of damages. (Section 55.31.) 10)Requires, until January 1, 2016, an attorney to submit a copy of the complaint to the Commission and subjects the attorney to disciplinary action for violation. (Section 55.31.) 11)Requires the Commission to review and report on the demand letters and complaints it receives until January 1, 2016. AB 54 Page 8 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. (Section 55.31) 12)Requires an attorney to include his or her State Bar license number in such a demand letter, and to submit copies of the demand letter to the Commission and, until January 1, 2016, to the State Bar. (Section 55.32.) 13)Provides that upon being served with a complaint asserting a construction-related accessibility claim, a defendant may move for a court stay and early evaluation conference if the defendant is any of the following: (A) Until January 1, 2018, a defendant whose site had new construction or improvement between January 1, 2008, and January 1, 2016 and was approved pursuant to the local building permit and inspection process; (B) a defendant whose site had new construction or improvement that was approved by a local public building department inspector who is a CASp; or (C) a defendant who is a small business, as described. The stay to the construction-related accessibility claim, as provided, may be provided for 90-days unless the plaintiff has obtained temporary injunctive relief. (Section 55.54.) 14)Authorizes 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, and authorizes a plaintiff to make that request if the defendant does not make that request. (Section 55.54.) 15)Requires a local agency, commencing on July 1, 2010, to employ or retain at least one building inspector who is a CASp. Commencing on January 1, 2014, a local agency shall employ or retain a sufficient number of building inspectors who are CASp. (Section 55.53.) AB 54 Page 9 16)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. (Section 55.56.) 17)Requires 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. (Section Sec. 55.56.) 18)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. (Section 55.56.) 19)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. (Section 55.56.) 20)Requires a commercial property owner to state on a lease form AB 54 Page 10 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. (Section 1938.) 21)Allows a tax credit for the amount paid or incurred by the owner of a public accommodation for improvements to the property in order to provide access to disabled individuals of up to 50 percent of the eligible access expenditures for the taxable year, but not to exceed two hundred fifty dollars ($250). (Revenue & Taxation Code Section 23642.) FISCAL EFFECT: As currently in print this bill is keyed fiscal. COMMENTS: The author describes the purpose of this bill as follows: The spirit of the ADA is being violated each and every time we allow small businesses to serve as an ATM for abusive attorneys and plaintiffs. We need to curb lawsuit abuses that wreak havoc on communities across California and harm small business owners, employees, and consumers alike. AB 54 will help small businesses stay open and employ people by providing them with a 60-day window to fix an alleged violation of a construction-related accessibility standard, if the standard related to the alleged violation has changed within three years. Recent and objective evidence gives perspective about the magnitude of this problem. California has approximately 3.3 million small businesses. According to data compiled by the Commission, from January 2014 until January 2015, 3,468 demand letters and complaints were filed in the state. This means that less than one percent of small businesses (and a far smaller percentage of all businesses) were sued in 2014 for violations of construction-related accessibility standards. AB 54 Page 11 Nevertheless, some of the information reported to the Commission is alarming in terms of the number and frequency of construction-related accessibility lawsuits being filed by a small number of law firms in California. According to the Commission, between September 2012 and October 2014, 5,392 complaints (including demand letters) were filed (in both state and federal courts). More than half (54%) of the complaints were filed by just two law firms. Forty-six percent of all complaints were filed by just 14 parties. However, data from the Commission shows that more attorneys are choosing to file lawsuits in federal court, perhaps to avoid complying with California-specific requirements, such as sending demand letters to the Commission and the State Bar. Interestingly, the Commission reports that the state's total share of complaints and demand letters has gone down. Between September 2012 and December 2013, state complaints/demand letters represented 68% of all the complaints/demand letters that the Commission received. However, between January 2014 and October 2014, state complaints/demand letters represented only 46% of all complaints/demand letters that the Commission received. In other words, more complaints are now being filed in federal court than in state court, which undermines the author's argument that plaintiffs are solely choosing to file lawsuits in state court in order to obtain damages. What can be done or should be done about (the small number of) attorneys who file large numbers of Unruh Act-ADA lawsuits? The Ninth Circuit Court of Appeals addressed this issue in Molski v. Evergreen Dynasty Corp. (9th Cir. 2008) 521 F.3d 1215. The plaintiff, Molski, was paralyzed from the chest down, needed a wheelchair to get around, and filed about 400 lawsuits in the federal courts within the districts in California. (Id. at p. 1051.) Upon motion of the defendant businesses (including the named defendant, a restaurant) the district court declared Molski a vexatious litigant and granted the defendants' request for a pre-filing order (requiring court approval before Molski could file additional lawsuits). (Ibid.) The Ninth Circuit AB 54 Page 12 acknowledged that "pre-filing orders are an extreme remedy that should rarely be used" and that courts "should not enter pre-filing orders with undue haste because such sanctions can tread on a litigant's due process right of access to the courts." (Id. at p. 1057.) Nevertheless, the Ninth Circuit upheld the order, finding that it was within the district court's power, "In light of the district court's finding that Molski did not suffer the injuries he claimed . . . to conclude that the large number of complaints filed by Molski containing false or exaggerated allegations of injury were vexatious" and the pre-filing requirement could be issued. (Id. at p. 1059.) Also, there is no evidence that these lawsuits are "frivolous." The Merriam-Webster Dictionary defines "frivolous" as "of little weight or importance," or "having no sound basis (as in fact or law) ." In other words, a lawsuit alleging a violation of the Unruh Act because of a denial of access would only be "frivolous" if it had no basis in the law (i.e. it did not state an actual violation). In fact, there is no evidence that the complaints which are filed are without merit. According to data collected by the Commission, most complaints identify multiple access violations. For example, of the cases filed in July 2014, most complaints identified multiple or significant single violations, such as missing grab bars. Only two out of 201 complaints identified a single violation, such as a soap or seat cover dispenser being too high. Should state law single out one minority group for special barriers to enforcement of civil rights protections? Under the federal ADA, a business that constitutes a place of public accommodation (e.g., many places of lodging, entertainment, recreation, restaurants, bars, theaters, stores, health clubs, etc.) is prohibited from discriminating on the basis of disability if its operations affect interstate commerce. Prohibited discrimination can take a number of forms - e.g., denial of participation in the facility, or a service, benefit, or good of the business; denial of equal participation in a good, service, or facility; or provision of a different or separate facility, service or good (unless necessary to provide services and the like that are as effective as that provided to AB 54 Page 13 others). Government facilities are also covered by the access obligations of the ADA. Public accommodations in California are required to comply with not only the ADA, but also with the state's Unruh Act, which incorporates the ADA into its provisions and makes a violation of the ADA punishable as a violation of Unruh. (Section 51.) All violations of Unruh are subject to statutory damages of at least four thousand dollars per violation, except some cases where the violation is based on a construction-related accessibility claim, in which case lower damages (a minimum of one thousand or two thousand dollars, depending on the circumstances of the case) apply. Persons with disabilities are just one of the many groups protected from discrimination in the use and enjoyment of public facilities and accommodations. Under the state's Unruh Civil Rights Act, other protected characteristics include race, national origin, sex and sexual orientation. In recent years, Unruh has been amended in a manner which has affected only the rights and remedies of disabled citizens under the Act. Depending on one's perspective, these amendments are either modest and necessary reforms, or changes that singled out and significantly undermined civil rights. Regardless of one's perspective, however, it is undeniable that current law already imposes a number of special limits and barriers on the legal remedies available to the disabled who are denied access to public accommodations for violations of construction-related accessibility standards. For example, statutory damages are already significantly lower for some violations of Unruh that are based upon denial of access to the disabled (as low as one thousand dollars ($1,000) in some cases) than for any other types of Unruh violations. Attorneys for plaintiffs who are denied access to public accommodations on the basis of construction-related accessibility claims are required to send copies of their complaints to the State Bar and to the Commission, but are not required to do so for clients who are denied access for any other reason. AB 54 Page 14 This bill would impose new obstacles on the disabled, requiring them to know which construction-related accessibility standard caused the denial of their access to the public accommodation and whether it has changed within the past three years; if so, to identify the owner of the public accommodation which has discriminated against them; provide written notice of their allegation that they were denied access, with "facts sufficient to allow a reasonable person to identify the basis of the construction-related accessibility claim'; wait at least 60 days after providing this written notice to verify whether the violation has been remedied; and if so, they are prohibited from either filing a complaint, collecting damages, or being reimbursed for legal fees. Likewise, if notice is not provided or is inadequate, the disabled person has no legal remedy, even if the public accommodation is in clear violation of Unruh. These proposals significantly alter the Unruh Act, which is designed to ensure access to public accommodations for all persons in the state and provide special protections and remedies to those who are particularly vulnerable to discrimination because of "sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation." (Section 51 (b).) The Committee should be wary of any proposed law that limits access to the courts, especially for vulnerable minority groups. "Because the right to access the courts implicates due process and First Amendment rights, courts have been exceedingly reluctant to restrict such access" (Moy v. United States (9th Cir. 1990) 906 F.2d 467, 470.), especially one which appears on its face to discriminate against a class of citizens who are entitled by state and federal law to special protections. Notification requirement. The bill requires, in "a construction-related accessibility claim alleging a violation of a construction-related accessibility standard within three years of a change in that standard," the disabled person who has been denied access to a public accommodation to provide "the owner, agent, or other party responsible for the place of public accommodation where the alleged violation occurred with sufficient written notice of the allegations and alleged access AB 54 Page 15 barriers on which the claim is based at least 60 days prior to the filing of any action[.]" In addition, the notice must state "facts sufficient to allow a reasonable person to identify the basis of the construction-related accessibility claim under subdivision (a) of Section 55.31." This notice is obviously crucial because a disabled person is prohibited from either filing a complaint, or collecting damages if he or she fails to satisfy the pre-filing notice requirement. There are many logistical and procedural questions about these notification requirements, any of which could lead, if not satisfied, to a disabled consumer being deprived of legal redress for discrimination, including but not limited to, the following: 1)How would the disabled person know what the construction-related accessibility standard is which has prevented or obstructed his or her access to the public accommodation? The disabled person knows that he or she has been denied access, but may not know anything about the specific standard which caused the denial of access. 2)Assuming the disabled person could identify the construction-related accessibility standard which caused the denial of access, how would the disabled person know whether that particular standard has changed within the past three years? The plaintiff should not have to be an expert on state building standards, or federal ADA law in order to file (or have the right to file) a complaint. 3)How would the disabled person know the identity and location of the business owner, landlord or other violator when the disabled person has been denied access to the facility? He or she may not have any information beyond the name of the business and the address of the facility. It is unlikely that a person who is not represented by an attorney would be able to satisfy these notice requirements given the specific requirements of the bill. Since the AB 54 Page 16 information contained in the notice must apparently be specific to each and every violation, this obligation would likely result in most claimants needing the assistance of an attorney. However, the need for an attorney would be frustrated by the prospect that attorney's fees would not be awarded, even if the plaintiff's claims were meritorious. That is because the bill provides that if a disabled person finds the right person to assist him or her, crafts exactly the right notice, and accomplishes the required delivery to the right person by the prescribed method, the victim would nevertheless be prohibited from any recovery, including recovery for attorney's fees for a genuine act of discrimination if the cause of the problem were later rectified. The defendant would not be required to compensate the plaintiff for the denial of his or her rights, only to address the problem in the future. It is highly unusual for a violation of any law to be overlooked or forgiven because the victim has not given notice in advance. It is even more unusual for a violator to avoid any legal responsibility for the violation simply by correcting the problem in response to the violation. The general principle of our civil (and criminal) laws is that everyone is held accountable for the wrongs they have committed, even if they are not warned in advance and even if they comply with the law in the future. The Committee is unaware of any comparable provision in civil rights law. This bill would remove all incentive for a business to comply with construction-related accessibility standards until and unless they are sued. Apart from the question of precedent, it may be asked whether this bill promotes voluntary compliance and prevents violations, as should be the goal of any law, or whether it might instead inadvertently encourage and reward noncompliance by allowing a business to avoid taking any steps to follow the law -- unless and until a notice is provided, at which point it can avoid responsibility for the legal wrongs and injuries it has caused. At the same time, businesses could potentially be misled about AB 54 Page 17 their exposure to liability under the federal ADA. This bill might immunize many ADA violations as a matter of state law. But the ADA itself imposes none of the requirements of this bill. Of course, state legislation cannot affect liability under federal law, and acts that violate the ADA would therefore still be actionable in state and federal court. Thus, despite the beguiling appeal of protection from state law violations, businesses that violate the ADA would continue to be subject to costly litigation, including money damages, civil penalties and attorney's fees, irrespective of this bill. Frequency of changes to construction-related accessibility standards. According to the author, the main premise for the notice and right to cure provision of this bill is that "Construction-related accessibility standards often change and are hard for small businesses to stay on top of. AB 54 is a commonsense bill that will allow small businesses to keep their doors open, while increasing access to the disabled community." How often do standards change and how hard is it for businesses to comply with them? The federal ADA Standards for Accessible Design (Standards) were originally published in 1991 and updated in 2010. However, because of safe harbor provisions, revised Standards do not necessarily affect existing businesses. According to the U.S. Department of Justice, Civil Rights Division, Disability Access Section's ADA Compliance Primer for Small Businesses: If your business facility was built or altered in the past 20 years in compliance with the 1991 Standards, or you removed barriers to specific elements in compliance with those Standards, you do not have to make further modifications to those elements - even if the new standards have different requirements for them - to comply with the 2010 Standards. This provision is applied on an element-by-element basis and is referred to as the "safe harbor." AB 54 Page 18 State building codes change because of changes in state law, as well as (very infrequent) changes in federal ADA Standards. Because of changes in state law, the Division of State Architect (DSA) updates the California Building Code every three years. The last time the federal ADA Standards changed (in 2010), the DSA released Bulletin BU 11-07 in order to "describe the applicability of the accessibility provisions in the California Building Code . . . and the Americans with Disabilities Act Standards for Accessible Design . . .for Title II and Title III construction projects in California." According to the DSA: New construction shall comply with the 1991 Standards if the date when the last application for a building permit or permit extension is certified to be complete by a State, county, or local government . . . is after January 26, 1992, and before September 15, 2010 . . . Alterations shall comply with the 1991 Standards if the physical alteration begins after January 26, 1992, and before September 15, 2010. . . . New construction and alterations shall comply with the 2010 Standards if the date when the last application for a building permit or permit extension is certified to be complete by a State, county, or local government (or, in those jurisdictions where the government does not certify completion of applications, if the date when the last application for a building permit or permit extension is received by a State, county, or local government) is on or after March 15, 2012, or if no permit is required, if the start of physical construction or alterations occurs on or after March 15, 2012. ( http://www.documents.dgs.ca.gov/dsa/bulletins/BU_11-07.pdf ) While these timelines can be complicated, the bottom line is that, because of "safe harbor" provisions similar to those in the federal ADA Standards, a business is only required to comply with standards that are in place when the business is originally constructed, or if later altered, the standards that were in AB 54 Page 19 place at that time. Health and Safety Code Section 18938.5 makes it clear that a "public accommodation" must only comply with "the standards in effect on the day the initial permit was submitted to the building department." (Health and Safety Code Section 18938.5.) If a business is only subject to the laws in place when the business is constructed or altered, under what scenario could a business be liable for violation of a standard which has changed in the past three years, as envisioned by this bill? The only scenario for a business being liable for a recently enacted standard would seem to be where the facility was constructed or altered within the past three years and did not comply with the ADA Standards or state laws that were in effect at that time. The Committee may wish to consider whether it is reasonable to excuse a business from complying with the law when it opens. Not surprisingly, the author provides no examples of businesses that were compliant with construction-related accessibility standards, but found to be liable under either the Unruh Act or the federal ADA because standards later changed and they were sued for those violations within three years. It is possible that no such cases exist. High price for minimal benefit. This bill alters the Unruh Act in a way that hurts only one protected class of vulnerable persons: the disabled. It imposes onerous new requirements on disabled persons to file lawsuits and obtain compensation for discrimination. At the same time, as explained above, these changes are likely to decrease access, decrease compliance and solve a problem - businesses that comply with construction-related accessibility standards when they open and are held liable for standards that later changed-that may not exist. This bill undermines recent bipartisan negotiated collaboration and compromise on disability access reform, pre-litigation relief to small businesses, and the important role and work of the Commission. In response to complaints that small businesses were the victims of predatory lawsuits alleging ADA violations, AB 54 Page 20 a bipartisan and bicameral effort with disability rights organizations and business advocates over a period of years ultimately led to the adoption of SB 1608 (Corbett and Harman) in 2008. It was the product of extended and careful consideration by thoughtful legislators and input and support from members of the disability and business communities including Disability Rights California, California Chamber of Commerce, California Foundation for Independent Living Centers, California Restaurant Association, Business Properties Association, California Hotel Association, and several others. SB 1608 enacted several reforms to increase voluntary compliance with state and federal laws requiring access to the disabled in any place of public accommodation. It established incentives for compliance and protection from litigation by responsible businesses, including a process by which businesses, if sued for violation of accessibility standards, could obtain a temporary stay of any litigation along with an in-person early evaluation conference with the court, attended by persons with authority to resolve the dispute between the parties, for the purpose of deterring frivolous cases and evaluating prospects for early settlement. Moreover, it clarified the standards for awarding damages and attorney's fees with respect to a claim alleging a violation of construction-related accessibility standards. It also required an attorney, when serving a written demand for money or a complaint on a defendant, to include a written advisory to the defendant of the defendant's rights and obligations. In addition, the bill required architects to complete coursework regarding disability access requirements and imposed continuing education requirements on local building officials relating to disability access requirements and established the Commission "to develop[] recommendations that will enable persons with disabilities to exercise their right to full and equal access to public facilities, and that will facilitate business compliance with the laws and regulations to avoid unnecessary litigation." (Government Code section 8299.) Four years after SB 1608 was signed into law, Senate Bill 1186 enacted a number of additional reforms to the laws governing construction-related accessibility claims. According to the AB 54 Page 21 Senate Judiciary Committee's analysis of SB 1186, Senator and President Pro Tempore Darrell Steinberg, who was the joint author of the bill, described it as follows [emphasis added]: 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, the Senate Minority Leader and joint author of SB 1186, described the bill as: . . . the culmination of months of hard work with staff and all the various stakeholders in the community. [The 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 many more tools for businesses to comply with this vital civil rights law. The policy goal of SB 1186, according to the authors, was "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." AB 54 Page 22 Unlike both SB 1608 and SB 1186, this bill is not the product of compromise or negotiation. It has never been amended in response to or consideration of concerns raised by the persons who are directly impacted by the widespread lack of compliance with construction-related access standards: the disabled community. There is no indication that anyone who is affected by construction-related disability access standards and litigation, other than business groups, has been consulted in the development of the bill's provisions. It is also noteworthy that many of the business groups that now support this bill supported SB 1186 when it was before the Legislature and claimed that it would greatly improve existing law by deterring frivolous lawsuits and serial litigants from filing Unruh Act-ADA lawsuits. Amendments recommended by the Committee. In light of the concerns expressed above, the Committee suggests the following amendments. 1)Amend SECTION 1 of the bill as follows: (a) The Legislature finds and declares that the federal Americans with Disabilities Act of 1990 (ADA) is a well-intentioned law empowering private citizens to bring claims against businesses that do not make their establishments accessible to those with disabilities. However,because the ADA authorizes damages of up to $4,000 on top of legal fees, California is a hotbed for predatory, serial litigants seeking to win settlements froma large number of businesses in California are out of compliance with the ADA. (b) The Legislature further finds and declares all of the following: (1) Current law permits defendants to request a court stay and an early evaluation conference upon being served with a AB 54 Page 23 construction-related accessibility claim if, among other things, the site in question had new construction approved by a local public building department inspector who is a certified access specialist (CASp), no subsequent modifications or alterations have been made, and all violations are corrected within 60 days. (2) The purpose of this tax credit is to promote increased compliance with disabled accessibility building codes throughout the state by encouraging business and property owners to become CASp certified. Using the relief provided by this tax credit, business and property owners will be more likely to obtain a CASp inspection whenever modifying or altering a site. (c) The California Commission on Disability Access shall post information about this tax credit on its website and include in its annual report to the Legislature the impact the tax credit has had on reducing ADA compliance lawsuits. 4)Strike SECTIONS THREE and FOUR from the bill in their entirety. Similar pending legislation. AB 52 (Gray) - provides, among other things, that the defendant's maximum liability for statutory damages in a construction-related accessibility claim against a place of public accommodation is $1,000 for each offense if the defendant has corrected all construction-related violations within 180 days of being served with the complaint. This bill is currently in this Committee. AB 1230 (Gomez) - establishes, among other things, the California Americans with Disabilities Act Small Business Compliance Finance Act, which would provide loans, funded in part by bond issuances, to assist small businesses finance the costs of projects that alter or retrofit existing small business facilities to comply with the federal American with Disabilities Act. This bill is currently in Assembly Banking and Finance. AB 54 Page 24 AB 1342 (Steinorth) - provides, among other things, additional revenue to the California Commission on Disability Access. This bill is currently in this Committee. AB 1468 (Baker) - provides, among other things, that a public entity's possession of a close out letter from the State Architect certifying that the buildings, facilities, and other places meet the applicable construction-related accessibility standards of the federal Americans with Disabilities Act, serves as presumptive evidence of compliance with the federal Americans with Disabilities Act. This bill is currently in this Committee. SB 67 (Galgiani) - among other things, exempts a small business from statutory damage liability in connection with a construction-related accessibility claim and extends the period for correcting construction-related violations that are the basis of a claim from 60 days to 120 days of being served with the complaint, for purposes of reducing a defendant's minimum statutory damage liability to $1,000. This bill is currently in Senate Judiciary. SB 251 (Roth) - relating to civil rights and disability access, is currently in Senate Rules. REGISTERED SUPPORT / OPPOSITION: Support Air Conditioning Trade Association Apartment Association, California Southern Cities Apartment Association of Orange County Building Owners and Managers Association California California Citizens Against Lawsuit Abuse California Chamber of Commerce AB 54 Page 25 California Building Industry Association California Small Business Association California Restaurant Association California Business Properties Association CSAC Excess Insurance Authority California Small Business Association California Southern Cities Camarillo Chamber of Commerce Chamber of Commerce Mountain View Chamber of the Santa Barbara Region Civil Justice Association of California Council of California Goodwill Industries East Bay Rental Housing Association Fairfield - Suisun City Chamber of Commerce Fullerton Chamber of Commerce Goleta Valley Chamber of Commerce Greater Fresno Chamber of Commerce International Council of Shopping Centers Lake Tahoe South Shore Chamber of Commerce Lodi Chamber of Commerce NAIOP -Commercial Real Estate Development Association North Lake Tahoe Chamber Commerce Nor Cal Rental Properties Association North Valley Property Owners Association Oxnard Chamber of Commerce Palm Desert Area Chamber of Commerce Rancho Cordova Chamber of Commerce Redondo Beach Chamber of Commerce & Visitors Bureau San Diego Regional Chamber of Commerce Simi Valley Chamber of Commerce Southwest California Legislative Council South Bay Association of Chambers of Commerce Solano Economic Development Corporation San Diego County Apartment Association San Diego County Tahoe Chamber of Commerce Plumbing-Heating-Cooling Contractors Association of California Western Electrical Contractors Association (Two individuals) Opposition AB 54 Page 26 American Civil Liberties Association of California California Foundation for Independent Living Centers Californians for Disability Rights, Inc. Consumer Attorneys of California Disability Rights California United African-Asian Abilities Club (One individual) Analysis Prepared by: Alison Merrilees and Anthony Lew /JUD./(916) 319-2334