The California Court of Appeal, Second Appellate District, issued a decision on August 1 holding that websites without any connection to physical place of business are not “places of public accommodation” under Title III of the Americans with Disabilities Act.
BACKGROUND
Forum shopping has been a feature of a wave of lawsuits claiming that websites that are not fully accessible to persons with disabilities violate Title III of the Americans with Disabilities Act (ADA). There are two primary reasons for this forum shopping. First, Title III of the ADA does not permit plaintiffs to sue for damages, but some states’ anti-discrimination statutes do. Second, the circuits are divided as to whether the operative phrase in Title III—“place of public accommodation”—refers to physical places only.
For several years, plaintiffs’ firms have turned to California’s Unruh Civil Rights Act (Unruh Act) to compensate for the ADA’s lack of a private right of action for damages. The Unruh Act enables plaintiffs to recover statutory damages of $4,000 per violation and expressly makes an ADA violation an Unruh Act violation. However, the US Court of Appeals for the Ninth Circuit, where California is located, has adopted the majority view that a “place of public accommodation” must be a physical place and that websites thus do not qualify.[1] This resulted in plaintiffs filing lawsuits in California state court and pleading their claims to avoid removal: they asserted Unruh Act claims based on ADA claims, but did not assert any federal ADA claims directly; and where the defendant was diverse, they expressly limited the value of the relief sought to below the amount-in-controversy threshold for federal diversity jurisdiction.
These strategies were successful for several years. Plaintiffs successfully obtained remand of cases removed to federal court and, in many cases, obtained favorable rulings from California trial judges who concluded they were not bound by the Ninth Circuit’s interpretation of the ADA. Because these successes created significant uncertainty for defendants, plaintiffs were able to leverage quick settlements on a massive scale.
Much of that changed with the California Court of Appeal’s August 1 decision in Martinez v. Cot’n Wash Inc.
MARTINEZ V. COT’N WASH INC.
The parties in Martinez were a plaintiff with a vision impairment and a company selling cleaning products exclusively through its website. The defendant was not alleged to operate any physical stores. The plaintiff alleged that the defendant’s website was not accessible to him and, based on an alleged violation of Title III of the ADA, asserted a single claim under the Unruh Act. There were no viable grounds for removal, and the case proceeded in California state court.
Martinez presented to the Court of Appeal for the first time the question of whether a website is itself a “place of public accommodation” under Title III of the ADA. After analyzing the statute’s text, applicable regulations, and statutory and rulemaking history, the Court of Appeal joined the Ninth Circuit (and the Third, Fifth, and Sixth Circuits) and held that a “place of public accommodation” must be a physical place. Because the defendant operated online only—i.e., its website did not have any connection or nexus to a physical store—it was not subject to Title III of the ADA.
TAKEAWAYS
For now, at least, Martinez represents a significant blow to the strategies that for years have resulted in hundreds of settlements to plaintiffs asserting Unruh Act claims based on allegedly inaccessible websites and apps. Because of its significance, the Martinez plaintiff is expected to seek review from the California Supreme Court—an effort Morgan Lewis will be monitoring closely.
[1] See Earll v. eBay, Inc., 599 F. App’x 695, 696 (9th Cir. 2015); Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104, 1114–15 (9th Cir. 2000).
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