SAN FRANCISCO (CBS SF) – District attorneys in San Francisco and Los Angeles have filed a joint lawsuit against a law firm that has filed thousands of lawsuits against small businesses alleging violations of the Americans with Disabilities Act (ADA).
The lawsuit filed by San Francisco District Attorney Chesa Boudin and Los Angeles District Attorney George Gascón claims that the law firm Potter Handy LLP is filing fraudulent lawsuits against companies to seek damages and enforce cash settlements from vulnerable business owners.
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Authorities estimate that more than 250 companies in San Francisco, many of them in Chinatown, have been affected by these ADA lawsuits, District Attorney Chesa Boudin calls “fraudulent.” The DA’s office says the Potter Handy LLP has raised millions and possibly more than $ 10 million in settlements.
According to the complaint, Potter Handy is bringing the fraudulent lawsuits, whether there are actual ADA violations at the companies or whether compliance is “easily achievable” under the ADA.
“After receiving reports last year that hundreds of small businesses had been served with fraudulent lawsuits under the ADA, our office launched a comprehensive investigation, and today we filed a civil lawsuit against the law firm, which has filed thousands of these illegal trials. ” said Boudin in a prepared statement. “We will hold accountable those who exploit vulnerable business owners, harm immigrant communities and undermine the intent of laws designed to promote accessibility.”
The lawsuit alleges that after filing these fraudulent cases in a federal court, Potter Handy pushes his goals to pay the settlement of up to $ 10,000 each – often from small businesses that can not afford to hire lawyers to sue. a federal court. Potter Mobile’s business model is designed to shake small businesses down to pay cash instead of ensuring ADA availability; yes, the Serial Filers used by this law firm almost never return to the companies after the conciliators to monitor compliance.
The complaint also alleges that the firm was able to sue a standing federal court because of the false allegations of ADA violations; Otherwise, Potter Handy would have had to file the cases in a state court, which is subject to procedural restrictions in litigation under the California Unruh Act. Because the ADA does not allow monetary damages claims, Potter Handy claims parallel violations under the Unruh Act, which allow plaintiffs to sue for a minimum of $ 4,000 in damages for each alleged ADA violation.
The California State Legislature previously amended the Unruh Act to create barriers to filing boiler claims like these in state court. The amendments include stricter requirements and a $ 1,000 application fee that only applies to plaintiffs who file ten or more Unruh Act claims per year – thus preventing what the legislature described as a practice of filing “boilerplate complaints” against small businesses. , which “seeks quick cash settlements rather than correction of the accessibility violation.” (Cal. Code of Civil Procedure Section 425.55 (a) (2).)
DA offices said that the serial registrars represented by Potter Handy under the pseudonym “Center for Disability Access” erroneously claim that the serial registrar visited the company, personally encountered obstacles there and intends to return once those obstacles have been removed. Boudin’s office said their investigation revealed several cases in which Potter Handy sued companies for alleged ADA violations that could not possibly have existed, such as suing Chinatown restaurants for having inaccessible outdoor dining tables at a time when those restaurants only offered takeaway. service due to COVID-19. -19 pandemic.
It’s an eerily long working day for Amanda Yen, who saved tips, dollar after dollar, for years, working on the tables as a new immigrant, to finally take over Hons Wun-Tun House shortly before the pandemic.
“It was really hard for small business owners,” said Hons Wun-Tun House owner Amanda Yen.
But in May last year, after months of pandemic closure and only take-out service, Yen was beaten with an ADA lawsuit alleging that her restaurant including the seating counter did not comply.
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She felt helpless, in corners and pressured to settle down.
“I have already paid $ 17,000,” Yen said.
Unable to pay a lump sum, she pays monthly payments.
“We support ADA laws. We want to be compliant. We support our communities with disabilities, but that’s not the way to go,” said San Francisco District 1 Supervisor Connie Chan.
“These lawsuits have never been about disability rights or disability access. They have always been designed to shake down small businesses,” Boudin said.
Boudin’s lawsuit after more than a year of investigative work requires the San Diego-based firm to stop filing these lawsuits, pay civil fines and return all the money obtained to companies that have settled, including Amanda Yens.
“The fact that this has continued throughout the pandemic is unscrupulous,” said San Francisco Supervisor Aaron Peskin.
“Small, immigrant-owned businesses in my district and throughout San Francisco have fallen victim to fraudulent lawsuits trying to extort money from them,” Supervisor Peskin said in a prepared statement. “I am grateful to DA Boudin’s office for standing up for vulnerable victims and stopping the exploitation of immigrants.”
“We are deeply concerned that Potter Handy has created a business model based on suing – and making victims of – small, monolingual business owners under false pretenses,” said Cally Wong, CEO of API Council in a prepared statement. “We are pleased that the San Francisco District Attorney’s Office is standing up for victims, immigrants and small businesses through courageous action to hold those who abuse the law accountable.”
KPIX 5 has contacted Potter Handy for a statement.
Kenny Choi contributed to this report.
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