BILL ANALYSIS Ó
AB 54
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Date of Hearing: January 15, 2016
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 54
(Olsen) - As Amended January 13, 2016
PROPOSED CONSENT
SUBJECT: CALIFORNIA COMMISSION ON DISABILITY ACCESS: DEMAND
LETTERS AND COMPLAINTS: STANDARDIZED REPORTING
KEY ISSUE: SHOULD INFORMATION ABOUT DEMAND LETTERS OR
COMPLAINTS IN CONSTRUCTION-RELATED ACCESSIBILITY CLAIM CASES
THAT MUST BE SUBMITTED TO THE CALIFORNIA COMMISSION ON
DISABILITY ACCESS ADHERE TO A STANDARD FORMAT SPECIFIED BY THE
COMMISSION IN ORDER TO INCREASE THE EFFICIENCY OF THE
COMMISSION'S REVIEW AND EVALUATION OF SUCH INFORMATION?
SYNOPSIS
As introduced last year, this bill would have established a
controversial notice and right-to-cure procedure limited to
construction-related accessibility standards that had changed
within the previous three years. In addition, this bill sought
to authorize a tax credit of up to $250 for business owners who
spend money to bring a place of public accommodation into
compliance with construction-related accessibility standards.
On April 21, 2015, the author agreed to amend the bill in this
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Committee to eliminate the notice and right-to-cure procedure,
but retain the tax credit. AB 54 was approved by this Committee
and referred to the Revenue and Taxation Committee, where it
subsequently was held as a two-year bill. On January 4, 2016,
the author made wholesale amendments to the bill to delete the
tax credit provisions and replace the contents of the bill with
substantially the same language contained in the enrolled
version of SB 251 (Roth), which was vetoed by Governor Brown in
October 2015. The bill was then re-referred by Rules Committee
back to this Committee for hearing.
As most recently amended on January 13th, the bill no longer
seeks to enact the majority of the language from last year's SB
251. Instead, the author has amended the bill to facilitate
more efficient reporting of information about demand letters and
complaints to the California Commission on Disability Access
("Commission"). Specifically, with respect to
construction-related accessibility claim cases, this bill would
require attorneys to submit information about the demand letter
or complaint to the Commission in a standard format specified by
the Commission. The requirement for submission in a standard
format is intended to ensure that this data can be more
effectively compiled by the Commission and provided to the
Legislature, while maximizing efficient use of Commission staff
resources. The recent amendments also clarify that the above
requirement is intended to apply upon the effective date of this
legislation, and not intended to be repealed with other related
reporting provisions that are scheduled to sunset on January 1,
2019. As a result of these amendments, all of the disability
advocates who opposed the bill in its previous form have now
taken a neutral position on this bill, and there is no known
opposition to the bill. If approved by this Committee, the bill
will be referred to the Assembly Appropriations Committee.
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SUMMARY: Modifies existing requirements for the reporting of
information about demand letters and complaints to the
California Commission on Disability Access. Specifically, in
construction-related accessibility claim cases, this bill:
1)Requires an attorney who provides a demand letter, within five
business days of doing so, to submit information about the
demand letter to the Commission in a standard format specified
by the Commission.
2)Requires an attorney who sends or serves a complaint, within
five business days of doing so, to submit information about
the complaint to the Commission in a standard format specified
by the Commission.
3)Clarifies that these requirements shall apply after the
effective date of this legislation and shall not be repealed
with other related reporting provisions that are scheduled to
sunset on January 1, 2019.
EXISTING LAW:
1)Provides the California Commission on Disability Access
("Commission"), an independent state agency composed of 19
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 Section 8299 et seq.)
2)Requires an attorney, when serving a demand letter or a
complaint on a defendant alleging a construction-related
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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. (Civil Code Section 55.3. All
further references are to this code unless otherwise stated.)
3)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.)
4)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 or 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.)
5)Requires, until January 1, 2019, an attorney to submit a copy
of any demand letter to the Commission and the State Bar, and
to submit a copy of a complaint to the Commission, and
subjects the attorney to possible disciplinary action for
violations of this requirement. (Section 55.32.)
6)Requires the Commission to review and report on the demand
letters and complaints it receives until January 1, 2016.
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
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that it receives. (Section 55.32.)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: As introduced last year, this bill would have
established a controversial notice and right-to-cure procedure
limited to construction-related accessibility standards that had
changed within the previous three years. In addition, this bill
sought to authorize a tax credit of up to $250 for business
owners who spend money to bring a place of public accommodation
into compliance with construction-related accessibility
standards. On April 21, 2015, the author agreed to amend the
bill in this Committee to eliminate the notice and right-to-cure
procedure, but retain the tax credit. AB 54 was approved by
this Committee and referred to the Revenue and Taxation
Committee, where it subsequently was held as a two-year bill.
On January 4, 2016, the author made wholesale amendments to the
bill to delete the tax credit provisions and replace the
contents of the bill with substantially the same language
contained in the enrolled version of SB 251 (Roth), which was
vetoed by Governor Brown in October 2015. The bill was then
re-referred by the Rules Committee back to this Committee for
hearing. After negotiations with the Committee, the author
agreed to amend the bill to facilitate more efficient reporting
of information about demand letters and complaints to the
California Commission on Disability Access. As such, the bill
no longer seeks to enact the majority of the language from SB
251. (However, that language has recently been amended into
another bill currently in this Committee's possession, SB 269
(Roth and Vidak).)
Data reported to and compiled by CCDA provides an empirical
profile of recent ADA-related litigation. There has been
widespread media coverage about the problem of what has been
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described as "serial ADA litigation." For example, in 2014, the
Modesto Bee and the Merced Sun-Star reported a series of
articles, describing "how the Americans with Disabilities Act
has been misused to create profit centers for opportunistic
lawyers. These attorneys recruit people - some with minor
disabilities, some with criminal records, some here illegally -
to visit small businesses in hopes of spotting the most minute
ADA violations. The lawyers then demand $4,000 for each
violation." The author contends further that "businesses up and
down the state have become vulnerable targets for frivolous
lawsuits, forcing many small businesses to lay off employees or
shut their doors."
Empirical data, however, indicate that it is a handful of highly
litigious plaintiffs that have targeted small businesses, often
those without the financial resources and sophistication to
challenge such lawsuits on their merits. According to data
compiled by the Commission, more than half (54 percent) of the
construction-related accessibility complaints filed between 2012
and 2014 were filed by two law firms; and 46 percent of all
complaints were filed by just 14 parties. These figures
indicate that the vast majority of all construction-related
accessibility claims filed in this state are initiated by a very
small number of plaintiffs (and their attorneys). As a result,
small businesses are justifiably fearful about being sued, while
disabled consumers are often viewed with blame or suspicion,
even though they have a legal right to full and equal access and
justifiably should be able to expect all public accommodations
to comply with the 25-year old requirements of the ADA.
But it is also important to put these figures into perspective.
According to data compiled by the Commission, from January 2014
until January 2015, there were 3,468 demand letters and
complaints sent or filed in the state. In contrast, according
to the Judicial Council of California, a total of 800,091
lawsuits were filed in the state in 2013 (the most recent year
data are available). Meanwhile, California has approximately
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3.3 million small businesses. These figures mean that less than
one percent of small businesses (and a far smaller percentage of
all businesses) were sued in 2014 for access violations; and the
3,468 demand letters or complaints regarding accessibility
violations represent less than one-half of one percent (0.43%)
of the total number of lawsuits filed in the state. The actual
percentage is even smaller, because the Commission figure
includes demand letters that are not complaints.
At the same time, there is no evidence that lawsuits filed by
high-frequency litigants 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. By
contrast, only two out of 201 complaints reviewed identified a
single violation, such as a soap or seat cover dispenser being
too high.
As amended, this bill furthers recent legislation intended to
facilitate more efficient data collection and reporting by the
Commission. Last year the Legislature approved and the Governor
signed into law AB 1521, authored by this Committee, which,
among other things, requires attorneys in disability access
cases to notify the Commission, within five business days of any
judgment, settlement, or dismissal of the claim or claims
alleged in the complaint, of certain information in a standard
format specified by the Commission. Specifically, the
information required to be reported to the Commission includes:
(1) the date of the judgment, settlement, or dismissal; (2)
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whether or not the construction-related accessibility violations
alleged in the complaint were remedied in whole or in part after
the plaintiff filed a complaint or provided a demand letter; (3)
if the construction-related accessibility violations alleged in
the complaint were not remedied in whole or in part after the
plaintiff filed a complaint or provided a demand letter, whether
or not another favorable result was achieved after the plaintiff
filed the complaint or provided the demand letter; and (4)
whether or not the defendant submitted an application for an
early evaluation conference and stay pursuant to Civil Code
Section 55.54, whether the defendant requested a site
inspection, the date of any early evaluation conference, and the
date of any site inspection. (See Civil Code Section
55.32(b)(2).)
Existing law already requires an attorney who provides a demand
letter or who sends or serves a complaint in a
construction-related accessibility case to send a copy of the
demand letter or complaint to the Commission within five
business days. (Existing law also requires a copy of the demand
letter to be sent to the State Bar, but only until January 1,
2019.) As recently amended, this bill would require these
attorneys to submit additional information about the demand
letter or complaint to the Commission in a standard format
specified by the Commission, so that data about accessibility
claims can be more effectively compiled by the Commission and
provided to the Legislature. The amendments also clarify that
the above requirement for reporting in a standard format is
intended to apply upon the effective date of this legislation,
and not intended to be repealed with other related reporting
provisions that are scheduled to sunset on January 1, 2019.
According to Commission staff contacted by the Committee, the
Commission has already received approximately 300 total
documents from attorneys (including demand letters, complaints,
and other reportable information) since AB 1521 went into effect
on October 21, 2015. This bill, like AB 1521, may help the
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Commission better organize and review the information it
receives from attorneys by requiring such information to be
submitted in a standard format-thereby increasing the efficiency
of CCDA staff resources. As the Commission continues to adjust
to recent changes to the law, it is thought that additional
clarification may be identified and potentially addressed in the
future. The author has agreed to work closely with the
Committee if additional amendments are needed to address those
concerns with this bill.
Related 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 as a two-year bill.
AB 1468 (Baker) seeks to provide, 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 ADA, serves as presumptive evidence of
compliance with the ADA. This bill is currently in this
Committee as a two-year bill.
SB 67 (Galgiani) seeks to exempt small businesses from statutory
damage liability in connection with a construction-related
accessibility claim and to extend 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
as a two-year bill.
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SB 269 (Roth and Vidak) is substantially similar to SB 251
(Roth) of 2015 (see below), with the notable exception that it
does not contain tax incentives for eligible access expenditures
by businesses. This bill is currently in this Committee.
Related previous legislation. AB 1230 (Gomez), Chapter 787,
Statutes of 2015, establishes the California Americans With
Disabilities Act Small Business Capital Access Loan Program
within the California Capital Access Loan Program in order to
create a self-sustaining program to provide loans to assist
small businesses in financing the costs of projects that alter
or retrofit existing small business facilities according to
certain criteria, to comply with the ADA.
AB 1342 (Steinorth) would have provided additional revenue to
the California Commission on Disability Access. In addition,
the bill would have required a commercial property owner to
state on every lease form or rental agreement executed after
July 1, 2016, whether or not the property being leased has
undergone inspection by a CASp, and would have required a
commercial property owner to provide additional information to
the tenant or lessor about the condition of the rented or leased
property. AB 1342 was vetoed by the Governor.
AB 1521 (Assembly Committee on the Judiciary), Chapter 755,
Statutes of 2015, establishes new pre-filing procedures for
"high-frequency litigants" and provides new tools for businesses
to use when they are served with complaints alleging violations
of construction-related accessibility claims.
SB 251 (Roth), among other things, would have established a list
of "technical violations" that are presumed to not cause a
person difficulty, discomfort or embarrassment for the purpose
of awarding the plaintiff minimum statutory damages, where
certain conditions are satisfied. This would have protected a
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business from liability for minimum statutory damages for
violations of construction-related accessibility standards
during the 120 day period after the business obtains a CASp
inspection of the interior, the exterior, or the entirety of the
premises, provided that all violations were corrected within the
120 period and other conditions were satisfied. The bill also
would have provided a tax credit for eligible expenditures to
increase accessibility. SB 251 was vetoed by the Governor.
REGISTERED SUPPORT / OPPOSITION:
Support
California Grocers Association
California Small Business Association
Opposition
None on file
Analysis Prepared by:Anthony Lew / JUD. / (916) 319-2334
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