Compliance under the Americans With Disabilities Act is a common target of outside law firms looking to sue local businesses. Photo by Erik McLean on unsplash.com

A new industry-backed report has put a price tag on what it calls the state’s “lawsuit abuse” problem — $101.2 billion in lost economic output and more than 850,000 jobs annually, according to a report released by the Citizens Against Lawsuit Abuse.

The nonprofit released its latest commissioned report, which details the economic impact of lawsuit abuse in California.

Its findings reveal that Californians pay more than $2,500 a year in hidden fees through a measure of per capita economic loss called the “tort tax” — a term that represents increased costs of products and services from business owners as a result of such lawsuits.

Local companies have been victims of such lawsuits.

Compliance with the Americans with Disabilities Act (ADA) is a common target. The ADA ensures that disabled people have equal access to goods, services and employment, as well as the ability to participate in government programs.

‘Small business killer’

Though the ADA was intended to create equitable conditions for those with disabilities, others say that the law is often used to justify excessive lawsuits.

David Fansler, the Fresno-based founder of Fansler Restaurant Group, said that ADA lawsuit abuse is a small  business killer. 

Fansler is referring to the increased rate of large, out-of-area law firms who seek out small businesses in the Central Valley, looking for ADA violations in order to file lawsuits — often on the behalf of plaintiffs who have never interacted with the businesses they are suing.

“The big ones fight them, they are more sophisticated, but they just bowl over the small ones because they don’t know quite what their rights are,” Fansler said about the businesses targeted.

Fansler employs roughly 350 employees across his three restaurants — Pismo’s Coastal Grill, Yosemite Ranch and Westwoods BBQ & Spice Co.

Fansler has faced multiple ADA lawsuits over the years — with causes ranging from toilets being too close to walls to tables being too close to each other — resulting in thousands of dollars in damages.

“If the table is supposed to be at 34 inches and it’s at 34 1/2, they will cite you,” said Fansler, “It’s a minimum of $5,000, then sometimes you have to get an attorney involved and a simple issue can turn into $10,000, $20,000 in a heartbeat.”

Despite claims that the lawsuits are meant to protect people living with disabilities, he was never asked to resolve accessibility issues.

“They wouldn’t even come back to see if it was fixed. They’re just on to the next gig,” said Fansler.

Trial lawyer threat

Victor Gomez is the executive director of Citizens Against Lawsuit Abuse (CALA), a nonpartisan movement of citizens and businesses fighting lawsuit abuse in California.

Gomez described how some trial lawyers visit small family-owned businesses, actively looking for violations with the intent to file lawsuits.

“Since mid 2024, the trial attorneys have spent almost $300 million on 1.2 million ads just in the Southern California area alone,” he said.

“You can’t drive through Fresno, you can’t drive through Bakersfield, you can’t drive through LA without seeing these mega billboards, right? Advertising everywhere, essentially saying, ‘Hey, give us a call. We’ll sue whoever you want and get some money, right?’”

Gomez, a veteran restaurateur, owned and operated a franchised pizza restaurant for 17 years in Hollister that was sued over ADA violations.

Though it was up to ADA standards when it was built, Gomez said he was sued after the ramp leading to his storefront was shifted by earthquakes, making it no longer ADA compliant.

Gomez paid $17,000 in damages. Like Fansler, he was also never asked to fix the violation. The hidden cost? A six-month hiring freeze.

Website liability

In addition to its accessibility requirements for brick-and-mortar facilities, the ADA also requires businesses to comply with web accessibility rules.

ADA regulations require that all mobile apps and online content is perceivable, operable, understandable and robust, according to the organization’s website.

Websites that aren’t compatible with screen readers or keyboard navigation may be at risk.

Those with inadequate link and button color contrast, unlabeled shopping cart buttons and images without alt text, may also be at risk for ADA lawsuits.

Founded in 1969 by Richard Stockle, Richard’s Prime Rib and Seafood is a fine dining restaurant located at Belmont and Blackstone avenues in Fresno.

Without warning, the restaurant — now operated by Richard’s grandson, Ben Stockle — was sued for ADA noncompliance during the pandemic.

Stockle said that the legal papers, which he described as looking copied and pasted, seemed fake. A lawyer friend confirmed they were real.

“I had no idea, before this lawsuit, that websites had to be ADA compliant,” Stockle said.

Stockle said that the suit was filed by a person from Los Angeles — someone who Stockle believes had never visited the restaurant.

“When it was all said and done, my attorney fee, for me to redo my website and their settlement, about $10,000,” he said.

Stockle fixed the website, but said that no one confirmed that changes were made to make it more accessible, as was the case for Fansler and Gomez.

Inspect your biz

David Frankenberger, the branch managing partner at Fresno law firm Tyson and Mendes, said that he’s noticed the trend of outside firms targeting the Central Valley over the last 10 years.

The firms run online ad campaigns and rent roadside signs with the intent of gathering victims to file lawsuits against small businesses, like restaurants, hotels and nonprofits.

“You see it from the billboards to the online advertisements, and I just see it in my everyday practice,” said Frankenberger, who has been involved with 15 similar cases as a practicing attorney.

Businesses can protect themselves from becoming targets by scheduling CASp [Certified Access Specialist] inspections every two years to keep on top of changing laws and regulations, said Frankenberger.

CASp inspections are performed by certified specialists who confirm that property entrances, elevators and ramps, handicap parking stalls and more are ADA compliant.