California Court Crafts New Limitation on Plaintiff's Ability to Recover Statutory Damages in California ADA Suits

A recent California appellate decision has hammered out a new legal chink in the armor of ADA serial plaintiffs in California. In Gunther v. Lin, a California appellate court held that the $4,000 statutory damage provision in California Civil Code section 52 applies only to intentional discrimination as the statute was designed "to punish intentional and morally offensive conduct." In other words, the $4,000 statutory damage award sought by serial plaintiffs for a public access violation is now only recoverable when a plaintiff can prove intentional discrimination. Though plaintiffs in public access cases can still recover statutory damages where no intent to discriminate is established, the amount is limited to California Civil Code section 54.3's statutory damage penalty of $1,000.

What Constitutes Proof of Intentional Discrimination?

The Gunther decision provides some guidance as to what may and what may not constitute proof of the type of intentional discrimination required to obtain the higher statutory damage award. For example, in new construction or a remodel, a failure to provide sufficient space for items with heightened visibility, such as accessible toilets, could be deemed evidence of intentional discrimination. The opinion notes that, by contrast, the failure to comply with other types of lesser known regulations may not constitute proof, such as a failure to wrap pipes underneath sinks in public restrooms or a failure to install visual alarms 80 inches above the floor or six inches below the ceiling, whichever is lower. The decision acknowledges the ease with which commercial property owners with the best of intentions may inadvertently violate public access regulations.

What To Do?

To avoid becoming a target for serial ADA plaintiffs, it is essential that commercial landlords ensure that new construction or any type of remodel work for which a permit is required comply with both federal and state accessibility standards. It is important to bear in mind that the fact that a building permit was issued or "signed off" by a local building inspector does not constitute a guaranty that the property complies with all pertinent accessibility regulations.

To the extent that landlords or tenants rely upon an architect or contractor to ensure that new construction or remodeling work complies with disability access laws, the services agreement with these professionals should contain appropriate language expressly requiring said professionals to be mindful of pertinent accessibility guidelines in the design and construction of the improvement in question. Where that design and/or construction falls short, the agreement should provide for an indemnity in favor of the commercial landlord.

As many of our clients know, regardless of however one decides to defend a lawsuit filed by an ADA serial plaintiff, bringing the property into compliance as soon as possible has been and remains the centerpiece of any defense strategy. There are few areas of the law where the old adage "an ounce of prevention is worth a pound of cure" has greater application. For that reason, we continue to counsel our clients to conduct accessibility surveys of their properties and, where necessary, create a plan and budget to make any necessary modifications within a reasonable period of time. Also, advise your tax professional of the purpose of any remedial construction. The ADA provides tax benefits to the owners of commercial real estate who invest in their properties to ensure compliance.

If you have any questions regarding any real estate legal matter, in San Diego please contact Brian Frasch (litigation) at bfrasch@gordonrees.com or Eric Young (transactions) at eyoung@gordonrees.com or call us at (619) 696-6700 and in San Francisco please contact Phil Wang at pwang@gordonrees.com or call him at (415) 986-5900. This Real Estate Update was prepared by Jan Buddingh of the firm's San Diego Office.