Page 1
Fee Award Against Disability-Access Law Firm Is Reversed
Court of Appeal Says ADA Does Not Authorize Orders to Plaintiff’s Lawyers to Pay Defense Counsels’ Fees
By a MetNews Staff Writer
Federal law, while authorizing an order to pay attorney fees to a defendant that has prevailed in a frivolous action against it for disability discrimination, does not permit such an award against the plaintiff’s lawyers, Div. Two of this district’s Court of Appeal held yesterday.
It also determined that a fee-shifting provision in the Americans with Disabilities Act (“ADA”) does have applicability although no cause of action is under the ADA where an alleged violation expressly underlies the stated claims.
Justice Victoria M. Chavez authored the unpublished opinion which relieves the controversial Center for Disability Access of an order to pay $55,414.84 to Zarco Hotels Incorporated to compensate it for attorney fees it incurred in defending against an action for alleged lack of access to its website by a woman who suffers from partial blindness.
Los Angeles Superior Court Judge Stephen I. Goorvitch made the order under 42 U.S.C. §12205, a part of the ADA, which provides:
“In any action or administrative proceeding commenced pursuant to this Act, the court or agency, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee, including litigation expenses...and costs....”
That provision has been judicially construed to permit awards against plaintiffs only where the action was frivolous.
Alleged Violation
The center—a division of the San Diego law firm of Potter Handy LLP—uses a stable of handicapped persons to serve as plaintiffs, filing voluminous numbers of lawsuits, generally against small businesses, based on alleged access violations. An action was filed against Zarco by Traci Morgan, represented by the center, because she was allegedly unable to book a reservation, using screen reader software, on the website of the defendant’s Hollywood Hotel.
Suit was brought under the Unfair Competition Law (“UCL”) and the Unruh Civil Rights Act. Although she did not state a cause of action directly under the ADA, the supposed UCL violation was predicated on the website being non-ADA compliant and the Unruh action sought damages based on an alleged defiance of ADA requirements.
Zarco moved for summary judgment. Morgan filed no opposition and, before the motion could be heard, dismissed the action.
Goorvitch’s Ruling
In opposing a motion for fee-shifting, Morgan argued that the ADA does not apply because no cause of action was stated under it. Goorvitch ruled:
“Plaintiff’s causes of action are predicated exclusively upon an alleged violation of the ADA. There is no independent basis for either cause of action, i.e., there would be no violation of the Unruh Civil Rights Act or section 17200 without a violation of the ADA. That supports the Court’s view that this action was ‘commenced pursuant to’ the ADA (in addition to the express allegations in the complaint).”
Represented by Russell Handy and others with Potter Handy, Morgan argued on appeal:
“[T]here is no federal cause of action in this complaint. It is unclear why Zarco Hotel believes that it has an entitlement to fees under 42 U.S.C. § 12205. This is the fee provision for causes of action brought under the Americans with Disabilities Act (‘ADA’). No such cause of action is present in this case. The mere fact that the Unfair Competition Law and the Unruh Civil Rights Act invoke the violation of rights under the ADA as a predicate act for liability does not mean that there was an ADA cause of action in the present case. Nor has Zarco Hotels made this novel argument.”
Potter Handy Lambasted
Zarco’s brief embraces Goorvitch’s reasoning as to the applicability of the ADA and maintains that, under the fee-shifting provision, the order was proper. Lawyers at Jeffer Mangels Butler & Mitchell LLP took aim at opposing counsel, saying:
“Potter Handy’s scheme is well known by district attorneys, businesses, judges, defense attorneys, and news outlets….
“Not wanting to be yet another victim of the intimidation scheme by paying an unjustified settlement, on August 18, 2022, Respondent reluctantly decided to undergo the expense and risk of filing a motion for summary judgment to have the case dismissed….It should not be underestimated how much of a challenge this was for a relatively small hotel emerging from the devastation of the pandemic. Even with a solid case, the court could deny the motion and reserve factual issues for trial.
“However, not wanting to actually face the truth and defend the merits of her claims, Appellant dismissed the case on September 26, 2022, before the motion court be heard….Respondent found it revealing that Appellant would adamantly refuse to dismiss the case until having to actually support the case with evidence before the court.”
Chavez’s Opinion
In her opinion reversing the order, Chavez said:
“We reject plaintiff’s counsel’s argument that section 12205 does not apply because plaintiff asserted no cause of action under the ADA. As the trial court noted, plaintiff in her complaint clearly and expressly invoked the ‘remedies, procedures and rights’ of the ADA.”
She wrote, however, that an award was improperly made against the center, explaining:
“Section 12205 of the ADA does not expressly authorize an award of attorney fees as sanctions against a party’s counsel. The statute’s silence as to whether attorney fees may be assessed against a party’s counsel does not authorize a court to do so….Defendant cites no case in which attorney fees under the ADA have been assessed against a party’s counsel, and we have found none. Rather, case law supports the presumption that fee-shifting statutes apply only to parties unless the statute expressly states otherwise.”
Under other fee-shifting statutes, she wrote, “courts have uniformly disallowed an attorney fees award against a party’s counsel,” and declared:
“We interpret section 12205 of the ADA similarly.”
The case is Morgan v. Zarco Hotels, B332319.
Copyright 2024, Metropolitan News Company