BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1521 (Committee on Judiciary) - Disability access:
construction-related accessibility claims
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|Version: August 17, 2015 |Policy Vote: JUD. 5 - 1 |
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|Urgency: Yes |Mandate: Yes |
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|Hearing Date: August 27, 2015 |Consultant: Jolie Onodera |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1521, an urgency measure, would make various
changes to the law as it pertains to construction-related
accessibility claims, as specified. This bill would create a new
fee of $1,000 to be assessed on high-frequency litigants, as
defined, in addition to the first filing fee, to be distributed
between the General Fund and Trial Court Trust Fund, as
specified.
Fiscal
Impact:
Minor one-time absorbable costs (General Fund*) for the
Judicial Council to update and develop the specified forms.
Potential increase in revenues to the Trial Court Trust Fund
and General Fund from the additional $1,000 filing fee on
high-frequency litigants, as defined. To the extent the
assessment of the additional fee serves to discourage the
filing of construction-related accessibility claims that
otherwise would have been filed, could result in some degree
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of workload relief to the trial courts.
Potential increase in the Proposition 98 minimum funding
guarantee, potentially in excess of $50,000 (General Fund)
annually should a specified portion of revenues from the
high-frequency litigant fee be considered General Fund
proceeds of taxes for purposes of calculating the minimum
school funding obligation.
Unknown, potential future litigation costs (General Fund) to
the extent imposing new requirements on one class of plaintiff
(disabled litigants), due to the volume of cases filed,
without regard to the legitimacy of the allegations or merits
of each case, should be challenged in court.
*Trial Court Trust Fund
Background: According to the Senate Committee on Judiciary analysis of
this measure (August 25, 2015), data collected by the California
Commission on Disability Access indicates that of the nearly
5,400 access-related complaints filed between September 2012 and
October 2014, 54 percent of the cases were filed by two law
firms, and 14 plaintiffs were involved in 46 percent of the
cases.
This bill seeks to limit the practice of high-volume lawsuits
motivated by the goal of obtaining quick settlements with
business owners, rather than correcting violations of
construction-related accessibility standards.
Proposed
Law: This bill would make various changes to the law as it
pertains to construction-related accessibility claims, in
summary, as follows:
Specifies that a "high-frequency litigant" means one of the
following:
o A plaintiff who has filed 10 or more
complaints alleging a construction-related
accessibility violation within the 12-month period
immediately preceding the filing of the current
complaint alleging a construction-related
accessibility violation.
o An attorney who has represented 10 or more
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plaintiffs who were high-frequency litigants at the
time when complaints alleging construction-related
accessibility violations were filed on their behalf
within the 12-month period immediately preceding the
filing of the current complaint alleging a
construction-related accessibility violation.
Requires a high frequency litigant, as defined, to include
additional information in a complaint and pay a $1,000 fee in
addition to the first paper filing fee, as specified.
Specifies for each additional $1,000 fee, the Administrative
Office of the Courts is to distribute the amounts as follows:
o $500 to the General Fund for use, upon
appropriation by the Legislature, by the California
Commission on Disability Access.
o The remainder of the fee to the Trial Court
Trust Fund.
Requires the Judicial Council to, on or before July 1, 2016,
develop an answer form for defendant businesses to respond to
a complaint alleging a construction-related accessibility
violation which includes specified information.
Requires the existing advisory, which must be provided to a
defendant with each demand letter or complaint, to include
additional information regarding the rights and obligations of
business owners and commercial tenants, as specified.
Requires an attorney to provide a defendant or potential
defendant with an answer form developed by the Judicial
Council, which would allow a defendant to respond in the event
a complaint is filed, as specified.
Requires, if requested by the defendant, the court to order
the parties and their counsel to meet at the subject premises
to jointly inspect the premises, as specified.
Requires property owners to indemnify a microbusiness tenant,
as defined, from liability arising from any
construction-related accessibility claims, as specified.
Specifies that attorneys and/or plaintiffs must certify that
specified conditions have been met, including, but not limited
to, that the action is not being presented primarily for an
improper purpose, such as to harass or to cause unnecessary
delay, as specified.
Related
Legislation: AB 52 (Gray) 2015 would provide that a defendant's
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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 the Assembly Judiciary Committee.
AB 54 (Olsen) 2015 would include any amount paid or incurred by
a taxpayer to receive an inspection by a CASp as an eligible
access expenditure for the Personal Income Tax Law and the
Corporation Tax Law which allows a credit to eligible small
businesses for 50 percent of eligible access expenditures. This
bill is currently in the Assembly Revenue and Taxation
Committee.
AB 1230 (Gomez) 2015 would establish the California Americans
with Disabilities Act Small Business Compliance Finance Act to
provide loans 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 pending on the Suspense File of this
Committee.
AB 1342 (Steinorth) 2015 would provide additional revenue to the
California Commission on Disability Access. This bill is pending
on the Suspense File of this Committee.
AB 1468 (Baker) 2015 would provide 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 the Assembly
Judiciary Committee.
SB 67 (Galgiani) 2015 would limit recovery against a small
business for construction-related accessibility claims to
injunctive relief and reasonable attorney's fees, and would
allow businesses who have undergone a CASp inspection 120 days
to correct violations in order to qualify for reduced statutory
minimum damages.
SB 251 (Roth 2015 would provide that a defendant is not liable
for certain violations if fixed within 15 days, as specified,
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and would exempt a defendant from liability for minimum
statutory damages with respect to a structure or area inspected
by a certified access specialist for a period of 120 days if
specified conditions are met. This bill is pending on the
Suspense File of the Assembly Appropriations Committee.
Prior Legislation: SB 1186 (Steinberg/Dutton) Chapter 383/2012
reduced statutory damages and provided litigation protections
for specified defendants who timely correct construction-related
accessibility violations of the Unruh Civil Rights Act. This
bill also banned pre-litigation "demands for money" and created
rules for demand letters and complaints in claims involving
construction-related accessibility violations.
AB 2282 (Berryhill) 2012 would have authorized an aggrieved
person to bring a disability access suit only under specified
circumstances. This bill was held on the Suspense File of this
Committee.
SB 1163 (Walters) 2012 would have established notice
requirements for an aggrieved party to follow before he or she
could bring a disability access suit and give the business owner
a 120-day time period to remedy the violation. This bill failed
passage in the Senate Committee on Judiciary.
Staff
Comments: The Judicial Council has indicated one-time minor and
absorbable costs to revise and develop the forms required under
this bill. Additionally, to the extent the provisions of the
bill reduce the frequency of litigation for construction-related
accessibility claims, the courts could potentially experience
some degree of reduced trial court workload.
Staff notes this measure currently includes an urgency clause
that requires a two-thirds vote of the Legislature for passage.
In the absence of the urgency clause, the new high-frequency
litigant fee created under the provisions of this bill could
potentially constitute a tax under Proposition 26 of the
November 2010 General Election, which amended Section 3 of
Article XIIIA of the California Constitution and broadened the
definition of a state or local tax to include various payments
previously considered to be fees or charges.
Specifically, $500 of the $1,000 fee assessed on high-frequency
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litigants is to be distributed to the General Fund for use, upon
appropriation by the Legislature, by the California Commission
on Disability Access. To the extent these revenues are not
considered a charge imposed for a specific benefit or government
service provided directly to the payor that is not provided to
those not charged, this portion of the high-frequency litigant
fee could potentially be considered a tax.
If these fees are deemed a tax, at least 40 percent of the new
revenue would be allocated to K-14 education pursuant to
Proposition 98. In some years, however, a notably higher share
of the associated revenue might need to be allocated to K-14
education. The exact share going to K-14 education would depend
upon various factors, including the size of the Proposition 98
maintenance factor, how the maintenance factor is repaid, and
the overall growth in state revenues.
Because the level of revenue collected for the new fee is
unknown at this time, it is difficult to assess the potential
impact on the Proposition 98 guarantee. The Senate Judiciary
Committee analysis of this measure noted that the California
Commission on Disability Access indicates that of the 5,392
access-related complaints filed between September 2012 and
October 2014, 54 percent of the cases were filed by two law
firms, and 14 plaintiffs were involved in 46 percent of the
cases. For illustrative purposes, assuming 250 filings (less
than five percent of total filings) were impacted, $125,000 of
the $250,000 in revenues collected would be distributed to the
General Fund. Based on the 40 percent allocation pursuant to
Proposition 98 would result in a $50,000 General Fund increase
in the Proposition 98 guarantee.
Should a share of the new revenues be required to be set aside
for the Proposition 98 minimum funding guarantee, the revenues
available to the General Fund for the use by the California
Commission on Disability Access, would likewise be reduced.
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