The latest ILR research, Preserving Protections, Curbing ADA Litigation Abuse, shows Americans with Disabilities Act (ADA) lawsuits have skyrocketed since 2013 and have disproportionately impacted small businesses. The ADA is an important law, but opportunistic plaintiffs’ lawyers and serial “tester” plaintiffs, those who file complaints against businesses but do not intend to actually visit the properties, exploit it to pressure small businesses into paying huge settlements.
A small group of just 18 opportunistic plaintiffs’ firms filed almost 45,000 ADA lawsuits nationwide between 2009 and 2021—which was 44 percent of all ADA case filings during that time. The most substantial filer by far—with 13,340 filings—is Potter Handy, one of the largest California-based plaintiffs’ firms. Potter Handy and several of its attorneys were investigated by the Los Angeles and San Francisco district attorneys over claims that the firms’ lawsuits against businesses relied on false allegations. In April 2022, following the investigation, prosecutors filed a 410-page unfair competition lawsuit alleging that “Potter Handy uses ADA lawsuits to shake down hundreds or even thousands of small businesses to pay it cash settlements, regardless of whether the businesses actually violate the ADA.” Both district attorney-led lawsuits detailed the firms’ unscrupulous tactics. Still, the courts dismissed both cases, holding that the claims could not proceed, even if the allegations were true, due to a feature of California law. The ruling in the Potter Handy case is now on appeal.
Other plaintiffs’ firms have brought cases on behalf of serial tester plaintiffs, like in Acheson Hotels, LLC v. Laufer, the pending U.S. Supreme Court case in which the U.S. Chamber Litigation Center filed an amicus brief. The plaintiffs allege violations of the “reservations rule” that requires owners of “hotels and guest rooms” to provide “enough detail” on their websites “to reasonably permit” disabled individuals to “assess independently whether a given hotel or guest room meets his or her accessibility needs.” To support standing, the attorneys, rather than claim an intent to visit and frustration of that goal, instead argue that the plaintiffs experienced stigmatic injury. Appeals courts have split on whether that alleged harm is enough to confer standing to file a lawsuit, a divide the U.S. Supreme Court is expected to address in Acheson.
Aside from the tens of thousands of examples of abusive and cookie-cutter ADA lawsuits against businesses, the study also found alarming trends nationwide:
- Of the total 103,172 ADA cases filed from January 2009 through April 2023, nearly 75 percent were filed in California, New York, and Florida.
- More than 80 percent of those cases have been brought by “high volume plaintiffs”—those individuals who file at least eight lawsuits annually.
- There was a 349 percent increase in ADA lawsuits filed nationwide from 2013 to 2021.
The paper outlines commonsense solutions policymakers and the courts can enact to protect small businesses. It’s time to pursue those reforms at every level of government and in our courtrooms to stop opportunistic plaintiffs’ lawyers and serial filers and testers from abusing loopholes in the law to capitalize on lawsuits at the expense of small businesses.
Do you own or work for a small business that has faced an Americans with Disabilities Act (ADA) lawsuit? We want to hear your story.