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Voracious Lawyers Are Wildly Abusing Federal Disability Law To Run People Out Of Business

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Image CreditFlickr/Ian MacKenzie

The American Disabilities Act created a new regulatory weapon to be used against any small business with a web presence.

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Imagine a town with a Wal-Mart and a small family shop. Both are ground level and perfectly wheelchair accessible, but a new wheelchair ramp requirement — conspicuously supported by Wal-Mart — passes as a town ordinance. Wal-Mart builds its unnecessary ramp, but the small family shop can’t afford the construction expense and must close.

This is a simple explanation of how the American Disabilities Act (ADA), passed in 1990, can hurt small businesses. This charter has increased legal requirements that benefit disabled people, but it’s also fashioned a new regulatory weapon to be used against small business. Now it’s being weaponized against small businesses too, through litigation that claims their websites discriminate against the disabled.

It’s common knowledge that most regulation tends to disadvantage small businesses. Major corporations with higher profits can better afford to pay for fines, facilities, legal defense, and other expenses associated with regulation, while smaller businesses can’t.

Large companies also go on offense by lobbying rent-seeking politicians to pass regulations that favor themselves and hurt their smaller competitors. The regulatory impact on small businesses was especially evident during the pandemic, as large corporations lobbied hard for business closures that disproportionately applied to their mom-and-pop competitors.

Sometimes, this type of lawfare becomes its own cottage industry — and the ADA is a prime example. One California man filed more than 180 disability lawsuits, including one that demanded $75,000 in compensation from a family restaurant where “Someone bumped into his wheelchair, which jostled him as he was eating.”

Frivolous ADA Website Lawsuits

A new frontier in this lawfare is in the borderless digital world: ADA website compliance.

The ADA was passed before most Americans used the internet, so it doesn’t provide specific guidance for websites. But disabilities like vision impairment are an issue for online customers, meaning the ADA can be used against any company with a web presence that lacks various software add-ons, such as coded text descriptions that can be robotically read aloud for every image on the page. In 2022, an estimated 97 percent of websites are still non-compliant.

As a result, an enterprising group of 10 law firms has been filing thousands of ADA website lawsuits every year. For many small businesses, like the boutique Avanti Hotel in Palm Springs, California, the cost of compliance, along with fines and the ADA’s punitive attorney fee rules, make settling easier than fighting it out in court.

“I would really like to fight it, but it just comes down to finances,” Avanti’s manager Jim Rutledge told the Los Angeles Times. Most business owners settle with the plaintiffs, which has prevented courts from developing a clear body of case law regarding compliance.

Legislation Needed

These frivolous lawsuits are the digital version of ambulance-chasing. A group of 103 congressional representatives, led by Rep. Ted Budd, R-N.C., made exactly this argument in a letter to then-Attorney General Jeff Sessions in 2018, asking the Department of Justice to clarify its website ADA rules. But Assistant Attorney General Stephen Boyd responded that the Department of Justice would not be issuing any clarifying guidelines on ADA for websites, encouraging Congress to pass legislation instead.

Budd immediately sought to do so, introducing a rules clarification bill called the Online Accessibility Act (H.R. 8478) with bipartisan co-sponsorship. Budd is a rare tech-savvy congressman, with a better-than-average understanding of technical issues like online censorship and cryptocurrency.

But most of his fellow members on the House Committee on Energy and Commerce are not, and H.R. 8478 failed to pass in the 116th Congress. Budd has reintroduced his bill in the current session. He is also running for U.S. Senate in North Carolina — so business owners may have some hope this issue will be resolved in coming years.

Lainey Feingold, one of the attorneys who has made a career out of filing ADA website settlements to recoup legal fees, penned an article in favor of current vague ADA guidelines for websites. That’s because as long as the rules are not clearly defined, winning settlements is easy, and there will always be plenty of targets — the 97 percent of businesses that have not yet taken steps to correct their websites. Feingold believes that as long as there is “a Democrat in the White House and Democratic control over the House and Senate,” the ADA will never be clarified.

The alliance between large corporations, these ambulance chasers, and the Democrats will continue hurting small businesses until somebody stands up for them. Congress must recognize, albeit 20 years late, that websites are the new storefronts — and the law should be clear about how they’re handled.