Serial ADA plaintiffs alter tactics and venues as they launch new litigation in state courts

After running into opposition in the federal courts over their thousands of lucrative ADA compliance cases, so-called "serial plaintiffs" with accessibility claims are now pursuing those settlements in the state courts. (Illustration by Glenn Gehlke/Local News Matters via Freepik)

In the first week of February, a disabled man named Orlando Garcia filed eight lawsuits in state court in San Francisco. Those suits joined 28 cases he filed in the same court in 2023.

Each of the 36 lawsuits alleged that Garcia was suing because he had encountered an unlawful “barrier” to accessing goods or services at the defendant’s premises that were freely accessible to people without a disability.

In each case, he asked for the violation to be remedied. He also asked to be awarded financial damages for having encountered the violation and for his legal fees to be paid by the defendant, usually a small business owner that ran a restaurant or a shop.

Garcia was a practiced plaintiff. According to court records, he had filed almost a thousand such lawsuits since 2014, most against small businesses.

What made these 36 filings somewhat different, however, was that he did not file these cases in federal court, where most of his lawsuits have been lodged in the past.

Garcia, like a number of other so-called “serial plaintiffs” with accessibility claims, was now suing in state court.

The ADA litigation business

Federal courts hear a wide range of lawsuits; cases involving everything from free speech to antitrust and securities law to billion-dollar intellectual property battles to mass tort litigation all fall within their jurisdiction.

Despite that broad range, in 2021 more than a quarter of all new case filings in federal court in San Francisco were lawsuits brought under the Americans with Disabilities Act.

A Bay City News analysis in April 2022 showed that 85 percent of those filings were brought by a group of 10 plaintiffs, all of them represented by a Southern California law firm named Potter Handy LLP.

A screen capture of the Potter Handy LLP website, taken in August 2022. The San Diego-based law firm represented 10 plaintiffs who in 2021 were responsible for 85 percent of the 2,463 ADA compliance cases filed in U.S. District Court for Northern District of California that year. (Local News Matters file image)

Orlando Garcia was one of those prolific plaintiffs, though he was not the most prolific. That honor belonged to a disabled attorney from Carmichael — Scott Johnson — and a Southern California man named Brian Whitaker.

In 2021, Johnson filed 1,064 cases in the district, Whitaker 590 and Garcia 269, according to a search on the U.S. Courts’ PACER system.

The trio’s 2021 filings were part of an explosion of ADA lawsuits in the U.S. District Court for the Northern District of California, the federal district court that hears cases from the Bay Area.

In that year, ADA filings in the district leapt from 873 in the prior year to 2,463 and showed no sign of stopping.

As the year began, Potter Handy was filing an average of three ADA lawsuits a day in the district, seven days a week.

But then everything changed. According to court records, only 460 ADA cases were filed in the district in 2022, and in 2023, new ADA filings fell to 145.

The Boudin Effect

The astonishing drop in new cases owed much to former San Francisco District Attorney Chesa Boudin.

A flurry of ADA suits against small businesses in Chinatown in 2021 had provoked an outcry and Boudin launched an investigation into the claims.

On April 11, 2022, Boudin joined with his counterpart in Los Angeles to sue the Potter Handy law firm and 15 of its lawyers, claiming that many of the firm’s ADA lawsuits in the district were unlawful and fraudulent.

The suit alleged that Potter Handy and its clients “schemed” to bring their new cases in federal court because state courts had imposed a $1,000 per case filing fee charge for so-called “high-frequency litigants,” that is, those who filed more than 10 accessibility cases a year.

Former San Francisco District Attorney Chesa Boudin joined with his counterpart in Los Angeles to bring a civil lawsuit against the Potter Handy law firm alleging it had filed thousands of fraudulent ADA compliance lawsuits in federal court. (Bay City News file photo)

The district attorneys claimed that Potter Handy’s clients lied about their intent to return to the businesses they sued, if and when the alleged violations were remedied. And because a bona fide “intent to return” was necessary for federal courts to hear the cases, the plaintiffs’ legal “standing” to bring suit was bogus. The lawsuits, they said, amounted to a “shakedown” of small businesses.

The district attorneys argued that Potter Handy should be enjoined from filing new suits based on the questionable standing of their clients and that the firm should disgorge the money that thousands of small businesses had previously paid to settle the claims.

The lawsuit attracted media attention and focused a spotlight on a cottage litigation industry that involved a great deal of money. BCN estimated that if refunds for Potter Handy settlements in the previous four years were indeed ordered, the firm’s exposure would approach $60 million.

Potter Handy moved to dismiss the case on a variety of grounds.

It also argued that the case was brought for political reasons, noting that it was filed while Boudin was being recalled and suggesting that the case was an attempt to curry favor with small businesses and their owners.

Potter Handy said that its attorneys are “a group of committed attorneys who have successfully facilitated the correction of countless ADA violations over the years.”

Its clients were fulfilling the “grand promise” of the ADA that “[n]o individual shall be discriminated against based on disability in the full and equal enjoyment … of goods, services, facilities, privileges, advantages, or accommodations.”

Rather than apologizing for the serial lawsuits its clients filed, Potter Handy said that the disabled litigants were doing just what the law contemplated.

DAs win by losing

The district attorneys lost their case.

On Aug. 29, 2022, San Francisco Superior Court Judge Curtis Karnow dismissed the case on the grounds that the Potter Handy lawyers and their clients enjoyed a “litigation privilege” to bring claims free of worry that they would be sued in another court for asserting their rights.

The privilege was intended to protect access to courts, “not because we desire to protect the shady practitioner,” Karnow said, quoting an earlier court case, “but because we do not want the honest one to have to be concerned” about later challenges in other courts.

Karnow dismissed the case without giving the district attorneys an opportunity to amend their complaint.

San Francisco District Attorney Brooke Jenkins, having taken the reins after Boudin was recalled, authorized her lawyers to appeal, but she had no better luck. On Dec. 8, 2023, the California Court of Appeal affirmed the lower court ruling, giving Potter Handy a decisive victory.

But even though the firm defeated the district attorneys’ suit, things did not work out well for its ADA practice.

Karnow’s decision on litigation privilege meant that the firm couldn’t be sued by the district attorneys, but it did not vindicate the way the firm’s cases got to federal court. And after all the media attention on the standing issue, Potter Handy found it had a new and critical focus on their cases by the judges on the federal bench.

Soon a number of judges were requiring proof that the plaintiffs had proper standing to sue in federal court. Several convened evidentiary hearings where Potter Handy clients were forced to testify about their intent to return.

In one hearing, attorney Ara Sahelian — an ADA defense litigator representing a bar in Redwood City — produced evidence that Potter Handy’s client Whitaker lived in Los Angeles, four and a half hours by car from the bar, and came to Redwood City, not to shop or eat, but primarily to prospect for and file lawsuits. Sahelian asserted that Whitaker had never returned to any of the 1,733 establishments that he had sued in the past.

Sahelian said if Whitaker actually tried to go back to all of the places that he sued, it would be a multi-year undertaking. From that, he argued Whitaker’s professed intent to return was a sham.

The judge agreed and found that Whitaker’s testimony was “not credible.” A few months later, another federal judge used even sharper language. He said that Whitaker and Potter Handy “feel so strongly about their mission” that they were “willing to peddle whatever lie they thought necessary to allow their lawsuit to survive.” He ordered the plaintiff and the lawyers to pay $35,000 for what he said was their “concerted, bad-faith sanctionable conduct.” By the time the dust settled, Potter Handy’s ADA practice in federal court in San Francisco was virtually dead.

But if that was the end for federal ADA cases in the Bay Area, it did not mean that small business owners could forget about lawsuits brought by disabled plaintiffs. Several of Potter Handy’s top clients — including Garcia and Johnson — did not give up suing. They found new lawyers and changed their focus to state court.

Phoenix rising

California’s Unruh Act is a civil rights law that essentially tracks the ADA.

The act provides statutory damages of $4,000 per violation and each visit by a plaintiff to a place where there is an unlawful barrier to access is a separate violation. In addition to damages, a successful plaintiff gets his or her legal fees and court costs paid by the defendant.

Moreover, according to ADA defense lawyer Dan Danet of the Karlin Law Firm, there is no requirement in the act that a plaintiff have an intent to return to the business in order to sue.

In other words, a state court suit allows a plaintiff to get similar relief to what he or she could have obtained in federal court, though offset to some extent by the supplemental filing fee of $1,000, which puts an initial cash flow burden on the law firm. (Plaintiffs’ law firms frequently advance court costs for their clients, expecting to get the money back when the case is resolved.)

Danet says that because state court cases eliminate the “intent to return” issue that was the crux of fighting in federal court, to some extent, state court cases are easier and simpler for the plaintiff. However, in state court cases, a plaintiff has to show that he or she had a “genuine intent to patronize” the business being sued.

That requirement may open up some of the same questions that plagued those plaintiffs who filed so many cases that it was difficult to prove they had a genuine intent to return if the violation was remedied.

Danet said, “it’s not enough to just drive by a place and see that the tables wouldn’t fit your wheelchair. You have to actually intend to go there and obtain goods or public accommodations.”

The developments in federal court led to a switch of new filings to state court.

The switch can be seen from the litigation histories of Johnson, Whitaker, and Garcia.

From the time of the district attorneys’ lawsuit in April 2022, a total of 1,675 state court cases have been filed by the trio — Johnson (207), Whitaker (772) and Garcia (605) — based on searches on UniCourt, an online service that monitors court filings.

The state cases

A Potter Handy breakaway group named Seabock Price APC of Pasadena now represents Johnson, though Johnson, the all-time California ADA litigation leader, has had a rough go of it.

Johnson was indicted in May 2019 for not paying federal taxes on the settlements he procured from his ADA work in 2012 through 2014. He contested the case for years but ultimately entered a plea agreement. Among other things, the agreement said Johnson received $1.3 million in lawsuit settlement proceeds in 2013 alone, though he only declared $346,000 on his return.

He was sentenced on April 11, 2023, and required to serve 18 months of home detention.

According to a statement from the Internal Revenue Service at the time of sentencing, “The sentence included the terms that … during the period of home detention he may not leave home for the purpose of seeking violations of the ADA or Unruh Act in order to file suits in federal or state courts.”

Johnson’s lawyer Dennis Price said the restriction is on “his movements, not his ability to utilize the court system.”

According to Price, “A prohibition on allowing Mr. Johnson to prosecute violations of his rights would be an affront to the First Amendment.”

Court records show that Johnson has filed 24 cases since his sentencing, including seven cases in Santa Clara County in 2024.

Price confirmed that the new suits all involve barriers to accessibility that Johnson discovered before his home confinement.

While Whitaker filed 772 cases since the district attorneys’ suit, his new cases sharply fell off in the middle of 2023 and he has filed no new state court cases in California in 2024.

Garcia’s recent filings in San Francisco may or may not be a part of a trend. Most of his 2023 cases were in Los Angeles and while his 2024 cases have been filed predominately in San Francisco, the year is still new.

Sahelian doesn’t think that filings will return to federal court in the Bay Area any time soon. The way he sees it, federal court was a great home for Potter Handy’s ADA cases until the firm “got greedy” and the judges “caught on.”

In the end he says, “Potter Handy overstayed its welcome.” Sahelian says that on a statewide basis, “state court filings are rising, and they will match the number of cases that were filed in the district courts, eventually … I’d say in a year.”

Leave a Reply

The Exedra comments section is an essential part of the site. The goal of our comments policy is to help ensure it is a vibrant yet civil space. To participate, we ask that Exedra commenters please provide a first and last name. Please note that comments expressing congratulations or condolences may be published without full names. (View our full Comments Policy.)

Your email address will not be published. Required fields are marked *