Gov. Gavin Newsom and state lawmakers recently took a significant step toward protecting small businesses from frivolous lawsuits. However, more must be done.
Recently, the governor and state lawmakers took action to reform the Private Attorneys General Act, which allows predatory trial lawyers to take advantage of minor issues in employment or labor conditions and force egregious settlements that line the pockets of the attorneys and offer little reward for the supposed victims.
The new reform to PAGA included caps on penalties, increased the ability for employers to cure violations before litigation, and generally made adjustments to make it harder for attorneys to shake down businesses.
It is a modest step and took the threat of a ballot measure to get any buy-in from lawmakers, but they deserve credit for finally doing the right thing.
Now try it with the Americans with Disabilities Act.
Like PAGA, predatory trial lawyers abuse the ADA to sue businesses over minor infractions. This disproportionately affects minority-owned small businesses, depressing social mobility and economic progress for disadvantaged communities and killing the entrepreneurial spirit.
The ADA, enacted in 1990, was designed to ensure that individuals with disabilities have equal access to public spaces and services. This noble intention should be preserved. But the law itself has been hijacked by a faction of opportunistic lawyers who exploit minor, often unintentional, compliance violations to file frivolous lawsuits.
These lawsuits often target small businesses that lack the resources to mount a robust legal defense, leaving them with little choice but to settle out of court or face financial ruin.
California has become a hotspot for such legal exploitation, accounting for nearly 25% of all ADA claims nationwide in 2023.
Beyond that shocking statistic are the experiences of countless small business owners who live in fear of having to navigate an increasingly treacherous legal landscape to keep their businesses alive.
A shocking example is the case of a legally blind individual who sued an Echo Park restaurant, claiming its website violated the ADA because they weren’t able to access it. This is in spite of the fact that the business owners are willing to assist customers who are unable to access the site individually. Just weeks later, the same trial attorney filed an identical suit against a local clothing store in Huntington Beach. Court documents reveal that this plaintiff has filed dozens of similar lawsuits in recent years, highlighting a pattern of behavior that suggests a systematic abuse of the law.
The other common denominator in these suits is that the targets are small, locally-owned businesses that don’t have the resources to fight back, which is why the burden of these lawsuits falls disproportionately on minority-owned businesses — the backbone of their local economies. Operating on thin margins, these businesses are particularly vulnerable to the financial strain of legal battles.
As outlined in a recent Reason exposé, trial firms target small businesses, “particularly those owned by immigrants and individuals for whom English is a second language, who are often less familiar with the complexities of the American legal system, are rarely able to afford the risk and expense of defending themselves in court,” because they see them as an easy payday.
Many of these businesses are forced to close their doors, not because they are unwilling to comply with ADA standards, but because the cost of defending against these lawsuits is simply too high.
So this problem is both societal and economic, exacerbating existing economic disparities and stifling the growth potential of these businesses, punishing local economies and dependent families.
It needs to be said that preying on and exploiting minority-owned small businesses is wrong and lawmakers should do something. One tried, but unfortunately too many of his colleagues were fine ignoring the issue.
Sen. Roger Niello drafted a commonsense piece of legislation, Senate Bill 595, which would have allowed businesses to cure any ADA issues before a lawsuit is initiated. Seems simple enough — after all, many of these businesses are learning of these compliance issues for the first time and giving them a chance to remedy seems fair and promotes the intention of the law.
Niello stated the intention of the bill is to “protect the rights of people with disabilities to have physical access while also protecting the rights of business owners to have meaningful access to justice, equal representation, and protection from meritless litigation.”
But the same thing happened that often happened. A bill of obvious merit and substance died likely because it was authored by a Republican and was opposed by special interests with money on the line.
However, with lawmakers and the governor making progress on PAGA, small businesses should remain hopeful that they will turn their attention to ADA. Lawmakers can build off their progress and solve the issue of lawsuit abuse more holistically, by likewise addressing reforms that prevent frivolous ADA suits.
By doing so, we can ensure that the ADA continues to serve its original purpose of promoting accessibility without undermining the entrepreneurial spirit that drives our communities forward.
Matt Fleming is an opinion columnist for the Southern California News Group and CEO of Sower Strategies, a digital marketing and public affairs firm.
