Demanding Action Austin's ADA Lawsuit Industry

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Demanding Action Austin's ADA Lawsuit Industry

http://story.kxan.com/austin-ada-lawsuit-industry/
Roni and Chris Clark say they poured over $100,000 into revamping their business property on South Congress Avenue, including a $38,000 electric lift for disabled customers to access their three-tiered building.

So, it came as a shock when a man named John Deutsch slapped the Clarks with a federal lawsuit alleging discrimination and violations of the Americans with Disabilities Act, which requires certain amenities guaranteeing disabled people access to businesses.

"They're your heartbeat of Austin, your local mom-and-pop business owners that are getting hit with all the ADA lawsuits," Roni Clark said. "This guy just rakes Austin business owners over the coals."

The Clarks quickly learned their lawsuit was one amid 382 others filed by a single plaintiff, Deutsch, and his attorney, Omar Weaver Rosales. The pair's lawsuits, which checker South and East Austin, have hit everything from famed local restaurants to tattoo parlors, women's clothing stores, self-storage lots and even an adult novel publishing company.

Now, deposition transcripts, court records, interviews and attorney correspondence obtained by KXAN pull back the curtain on this ADA lawsuit cottage industry and a growing effort to end it.

'Systematic abuse'

The Clarks could have settled, paid the plaintiff a few thousand dollars and likely settled their case. That might have been the easy route; nearly half the businesses sued by Deutsch have settled out of court.

But paying and moving on did not seem right, Roni Clark said.

"That's not really part of my character. I mean, we could have done that, but I wanted to be a part of the solution," she said.

The Clarks acknowledged ADA law is critical, violations should be remedied and everyone should have access to businesses. They say they immediately repainted the striping of one van accessible parking space, which is the only ADA issue they have acknowledged and "rectified" since the lawsuit arrived.

Deutsch and Rosales have seemingly positioned themselves as fighters for ADA compliance and disability rights. Now 25 years into the ADA's existence, too many businesses are inaccessible, Rosales said.

Rosales declined multiple requests for an on-camera interview. KXAN ultimately caught Rosales on the federal courthouse steps, where he spoke on camera briefly.

But with hundreds of lawsuits stacking up, the Clarks and their attorney, Jim Harrington, say the serial plaintiff and his counsel appear motivated more by money than access.

Harrington wrote as much in a recent federal court filing.

"Because Defendant believes [Deutsch] and [Rosales] are engaged in a systematic abuse of the Americans with Disabilities Act for self-enrichment, Defendant's main objective in disposing of this lawsuit is putting a stop to such abuse," Harrington wrote in the report filed in Federal District Court.

Harrington, who founded the Texas Civil Rights Project, said he plans to take the Clark case to trial, if it is not dismissed. He said he is defending the Clarks pro bono, along with six other businesses.

No stranger to ADA litigation, Harrington traveled the country organizing campaigns promoting ADA law in the 90s. He spent decades filing lawsuits against businesses with ADA violations, a practice similar to what Rosales currently does.

But Harrington says his approach was "night-and-day" different from Rosales.

"In the cases that we filed, neither the plaintiff nor the lawyer made personal money off these cases," Harrington said. "We did it on principal."

Harrington has spent hours deposing Deutsch. KXAN obtained transcripts of the depositions, which Harrington says reinforced his concerns about the slew of suits and reveal the process behind them.

The Process

The Deutsch and Rosales lawsuits seem to follow a pattern.
For the Clarks and several others interviewed by KXAN, the federal suit arrived unannounced in the mail. The lawsuit noted technical outdoor ADA violations, such as the number and width of disabled parking spaces and the height of the lip at the threshold of the business' doors. No warning about ADA violations from Deutsch or Rosales preceded the suit. Some lawsuits also note disabled parking signage violations, according to court records.

John Deutsch, who has filed hundreds of ADA lawsuits with his lawyer Omar Rosales.
None of the lawsuits cite indoor ADA violations. The language in the case against the Clarks seems to be styled in a template format Deutsch and his attorney use, according to every case reviewed by KXAN.

Rosales has said his client's ADA lawsuits are above board and necessary. In one email, the attorney described Deutsch as an ADA "tester." Deutsch has been a paraplegic for two years; he said he became paralyzed after back surgery, according to the deposition.

In general, Deutsch said he has been "dismissed" and "looked down upon" when he complained about ADA issues and accessibility.

Businesses have had decades to come into compliance with ADA law, Rosales said, and simply asking for repairs does not work.

"In a perfect world everything would work, but unfortunately it takes a lawsuit," Rosales said. "We're just exercising our rights that are established by the constitution and the federal law under the ADA."

With the stated goal of reaching a quick settlement, Deutsch and Rosales also send a demand letter.

Lawyer Omar Rosales, who has filed hundreds of ADA lawsuits in the name of his client John Deutsch.
KXAN obtained two demand letters. The notes ask for fixes to the ADA violations and a settlement of $7,000, though that figure is negotiable. The letters warn the cost of litigation could climb above $100,000, if a settlement is not reached.

Demand letters are allowed under ADA law.

In return for a settlement, Rosales drops the lawsuit. Harrington said he believes the Clarks did not receive a letter asking for settlement. Harrington said the Clarks did not receive the letter because he intervened in the lawsuit before Rosales had a chance to send one.

The demand letter language alarmed longtime ADA activist and wheelchair-user David Wittie. He is a community organizer with disability rights group ADAPT.

ADAPT and the Texas Civil Rights Project have organized an annual campaign that includes filing lawsuits against businesses for ADA violations. Wittie said he never made much money off any of the lawsuits, just a "couple hundred dollars" in the past 15 years or so, he said.

“In a perfect world everything would work, but unfortunately it takes a lawsuit.” – Omar W. Rosales
Though there is no requirement that plaintiffs or attorneys ask for compliance, Wittie said ADAPT would typically ask for remedies to ADA violations before filing a lawsuit.

"I've never seen a letter that was this strongly worded," Wittie said, regarding a Rosales demand letter.

Commenting on a list of businesses Deutsch sued, Wittie said he has eaten several times at Maudie's Tex-Mex on South Lamar Boulevard without problems, and ADAPT has had an annual holiday celebration with dozens of disabled people at El Mercado, a Mexican restaurant on South First Street. Deutsch sued both restaurants.

When questioned, Deutsch could not remember how many cases he has settled, and could not recall specific obstacles he faced at a variety of businesses he sued, deposition transcripts stated.

Deutsch did give a reason for visiting certain businesses, though. Many of the businesses are on lists given to him by his attorney.

The list
"I gave [Deutsch] the list of places to visit based on my legal training and based on what I observed," Rosales said during a deposition. "[Deutsch] looked at them. And then he went to go check which properties he thought were not compliant."

The existence of the list appears to strike at the core of Harrington's concerns with Deutsch and his litigation.

In each lawsuit examined by KXAN, Deutsch alleges he patronized the business in a specific month; he experienced "discomfort" and "difficulty" when confronted with accessibility problems; and the ADA violation denied him full access to the facility.

Under questioning, Deutsch could not recall why he visited a variety of businesses, including what specific car work he needed done at half a dozen auto shops in August of 2015, according to a deposition and his lawsuits.

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Regardless, during the deposition Deutsch said he visited the locations, and they were inaccessible.

Deutsch later said some businesses he sues are not on the list, and he finds them during the course of his daily routine, according to deposition records.

Anatole Barnstone represents a South Austin tattoo parlor sued by Deutsch. He said the number of lawsuits filed by Deutsch gives the venture the appearance of being aimed at "profit."

"The ADA is a valuable resource for people who need access to public accommodations," Barnstone said. "It is not a get-rich-quick tool for vigilante code-enforcement officers."

Since Deutsch and Rosales use confidential settlement agreements, it is not clear how much either man is making on the lawsuits.

According to one confidential settlement agreement obtained by KXAN, once a settlement is reached the business owner is responsible for ensuring compliance with the ADA.

During a deposition, Deutsch said he does get some payment from the lawsuits, but he would not disclose how much, and Rosales said payment information is privileged, attorney-client information.

382 and counting
In addition to auto shops and Mexican restaurants, Deutsch has sued 18 bars, 15 insurance agents, 13 banks and lenders, and eight smoke shops.

The suits have hit famed restaurant properties, including Guero's Taco Bar, Hopdoddy Burger Bar and Magnolia Cafe. Since May of 2015, the lawsuits have swept across South Austin and into East Austin.

And Austin is not the first place Rosales has represented a single client in multiple ADA cases. According to federal court records, Rosales represented a single plaintiff in about 40 South Texas ADA lawsuits in 2014 and 2015.

Rosales' brother, who assisted Deutsch at a physical rehabilitation facility, introduced the two, Deutsch said during the deposition.

Through early May, Rosales and Deutsch have filed 382 lawsuits. If Rosales settled each one for $7,000, which is what he initially seeks in his settlement offers according to multiple interviews and two demand letters viewed by KXAN, it would total roughly $2.7 million.

A portion of the money Rosales and his client made this past year may have come from Jose Carranza. He owns a Shell corner store on Highway 71 and South First Street.

Carranza told KXAN he had to take out a loan to pay for costs associated with the case. Carranza said he signed a confidential settlement agreement.

"He asked me for money at the beginning," Carranza said, regarding the demand letter written by Rosales. "They scare you."

Carranza said he and his family never saw Deutsch in the parking lot of their local store.

Mishell Kneeland defended one business owner against a Rosales and Deutsch lawsuit. She asked not to reveal the name of her client because she had concerns about legal blowback, but she did say Deutsch appears to skew more toward suing small and medium businesses. "It seems Mr. Deutsch and Mr. Rosales have been sort of finding those businesses and targeting them for not complying with the ADA," Kneeland said. "They don't give those small and medium businesses, who are understandably afraid of lawsuits, a chance to fix the problems before they sue them."

She added that there is not a requirement for a plaintiff, such as Deutsch, to give notice of an ADA violation before suing.

Regarding the size of businesses he sues, Deutsch said, "I didn't look at them as small or big, I looked at them as inaccessible," according to a deposition transcript.

Fighting back
Some attorneys, such as Kneeland, are defending their clients on a case-by-case basis. Harrington, on the other hand, said he wants a systematic end to all the lawsuits.

Barnstone, who is representing a South Austin tattoo parlor, said his client was served by mail and the suit did not include an important piece of paperwork.

While mail service saves money, Deutsch's attorney "forgot" to include a required notice called a "summons," Barnstone said.

"It's a small step in filing a lawsuit but a crucial one," Barnstone said. "That is why we've asked the court to dismiss the case."

Barnstone described the oversight as an "example of the pitfalls of 'fast-food' litigating."

Despite the issues Kneeland mentioned with Deutsch and Rosales' methods, the pair do note real ADA violations in their lawsuits, she said.

"Some of the cases that Mr. Deutsch brings are bringing up valid complaints. So, there's a balance that has to be struck there. I think the real problem is the tone of the lawsuits," Kneeland said.

According to a motion filed by Kneeland, when a defendant moved to get his case dismissed, Rosales "threatened" to call the Texas Department of Insurance and to advertise the defendant's name in the Austin American-Statesman to find additional plaintiffs that had patronized his business in the past 10 years.

"You're just making it worse for yourself," Rosales wrote in an email to the defendant. "The longer we go on this case, the more money you will owe at the end."

Kneeland said in the motion, "There is no evidence that Congress intended the ADA to threaten or extort money from small and medium business owners."

In early May, Rosales filed motions of his own against Harrington for adverse inference, sanctions and to disqualify him. Rosales alleged Harrington engaged in disruptive behavior during depositions and threatened his life. Rosales asked for the issue to be referred to the Chief Justice of the Division and Harrington be held in contempt.

“Mr. Rosales’ 'pleadings’ seem reflective of someone who is losing control of his money-making scheme, perhaps feels trapped in a corner, with a touch of ill-founded paranoia.” – Jim Harrington
stated in a federal court filing
Harrington answered the allegations, saying Rosales' motions were characterized by "hyperbole, unsubstantiated allegations and wild accusation," according to an answer filed in federal court.

"Mr. Rosales is certainly upset that someone has stood up to the broad money-making scheme upon which he and his client have embarked," Harrington states in the court document. "Mr. Rosales' 'pleadings' seem reflective of someone who is losing control of his money-making scheme, perhaps feels trapped in a corner, with a touch of ill-founded paranoia. In any case, whatever is going on in his thinking is not reflective of reality."

Aside from the tone in the lawsuits, Kneeland said most people want to comply with ADA law.

"If, like in California, the federal law required notification first, I think we'd see these things resolved without going to court," she said.

A change in the law may be in the works.

Federal legislation
Halfway across the United States, U.S. Rep. Jerry McNerney, who represents a district surrounding Stockton, California, filed the so-called COMPLI Act in March. The legislation focuses on predatory ADA lawsuits and "high-frequency litigants that hurt small businesses while not always bringing resolution (to) the accessibility issue."

The COMPLI Act would require a potential plaintiff to notify the business in writing about the ADA problems and also tell the defendant the time and date the person visited.

The business owner would be given a 90-day period, with a possible 30-day extension, to fix the ADA violation, before a lawsuit or demand letter may be sent. Business owners would also be required to post notice that they have received the ADA violation notice and are in the process of remedying the issue, according to McNerney's office.

"I have heard from numerous local businesses who were forced to shut down, lay off employees, pay out large settlements, or change locations because of repeated lawsuits and threats of lawsuits," McNerney said in a March news release. Aside from the federal legislation, Harrington said it is a delicate balance fighting Deutsch's cases. Harrington said he does not want to set a bad precedent or create flawed law that would undermine the ADA's effectiveness.

Meanwhile, scores of Austin ADA cases sit pending in federal court, and the Clarks are hoping to have their case tossed out.

"We would like to see an end of the exploitation," Chris Clark said. "This is someone exploiting a law, a very good law that was designed to give the disabled community equal access."