California: Gold Mine for Legal Extortion

Provisions in California’s version of the Americans with Disabilities Act (ADA) have made the Golden State a gold mine for shakedown lawsuits. But a few simple fixes would ensure access for persons with disabilities while halting the litigation epidemic fleecing California businesses.

Federal and state ADA laws require businesses to make “reasonable accommodations” for individuals with disabilities by removing physical barriers that hinder access.

California’s access law allows civil-litigation plaintiffs to sue non-compliant businesses in order to be “made whole” and to recover unlimited emotional distress and punitive damages. Plaintiffs can also recover attorney fees. Only Florida and Hawaii have similarly generous provisions. It is not surprising that in recent years more than 14,000 accessibility lawsuits have been filed in California. The state is an ADA litigator’s paradise.

Exhibit A is Theodore Pinnock, a disabled lawyer in San Diego. Pinnock & Wakefield, his law firm, has filed more than 2,000 ADA lawsuits against California businesses, touting a 95-percent settlement rate. In March, he demanded $10,500 from each of 40 businesses in Alpine, California, or he would sue alleging ADA violations. The incident surprised many local storeowners, who believed they were in compliance.

In January, Pinnock finished filing four class-action lawsuits against dozens of businesses in Julian, California. The suits stemmed from Pinnock’s visit to the historic Gold Rush town two months earlier. Pinnock claims his weekend was spoiled by the noncompliance of a number of small businesses.

Days after Pinnock returned home from vacation, 67 Julian mom-and-pop stores received letters demanding varying amounts of money in compensation—the smallest being $2,500—and ordering physical changes to the business establishments. If his demands were not met, Pinnock threatened to sue under state law, making them potentially liable for $125,000 in attorney fees, payable to Pinnock of course.

Because Pinnock is disabled, he often files ADA lawsuits on his own behalf or under one of his unincorporated associations. According to an insider, Pinnock admits to being the only disabled member of one association, with the remainder being family members. Pinnock says the money he demands is for his legal work. If Pinnock’s money demands are not met, he sues.

A few Julian storeowners negotiated settlements with Pinnock in exchange for temporary lawsuit immunity. Pinnock has given some of these businesses three years to fix access issues, confirming that money, not quick compliance, drives his lawsuits. So far, two of the four lawsuits have been settled.

Many businesses have refused to settle, fearing they will become easy targets and be sued again, though all favor making reasonable accommodations to comply with access laws. Some owners have offered to use their money to make access changes instead of settlement payments, but Pinnock has refused, again confirming that money is his motivation.

The longer a business delays settling, the higher Pinnock raises the settlement amount, ultimately suing the holdouts. Four businesses, including Bell, Book and Candle, a Julian specialty shop, have closed their doors citing Pinnock as the last straw.

Though distasteful, Pinnock’s actions are legal. His siege of businesses in Julian and Alpine illustrates how legal extortion thrives in the Golden State. Flaws in state law make it easy for professional shakedown artists to file suits, line their pockets, and shutter businesses.

Pinnock is determined to continue this practice. After local media began reporting on the Julian siege, Pinnock issued a warning on his firm’s website:  “I am putting businesses on notice today to hire an ADA consultant, do a survey, take out a loan, and remove all barriers immediately. The ADA plaintiffs will increase lawsuits immediately. . . . I have no more compassion for businesses and respect for certain news reporters.”

ADA shakedowns are out of control in California. But a few simple reforms would fix the problem:  Businesses should be notified of a violation and allowed to remove access barriers within a short time before an ADA lawsuit is filed. At trial, access improvements should be in lieu of damage awards. Finally, punitive damages should not be allowed and the losing party should pay both sides’ attorney fees.

The goal of the ADA is access for persons with disabilities, not making lawyers rich and bankrupting storeowners. A few reasonable accommodations to this well-intentioned but flawed state law would encourage speedy compliance while stopping shakedowns of California businesses.