A FEDERAL JUDGE in San Francisco has ordered a disabled plaintiff and his lawyers to pay $35,000 for what he said was their “concerted, bad-faith sanctionable conduct” in the course of a lawsuit they brought under the Americans with Disabilities Act.
U.S. District Judge Vince Chhabria on Tuesday found that serial ADA plaintiff Brian Whitaker and Potter Handy LLP, the San Diego-based law firm that represented Whitaker in the case, “feel so strongly about their mission” that they were “willing to peddle whatever lie they thought necessary to allow their lawsuit to survive.”
Chhabria used unusually harsh language to describe their conduct. He called one of their allegations “facially preposterous,” termed some of their statements “clear lies,” and found the law firm and client to have “engaged in an egregious pattern of bad faith misconduct.”
He imposed the monetary sanctions on Whitaker and Potter Handy “jointly and severally,” meaning that each is liable for the full amount should the other fail to pay its share.
Dennis Price, a partner at Potter Handy and a frequent spokesperson for the firm, declined to immediately comment on Chhabria’s decision, stating only “We need to evaluate it with our client before making any public comment.”
The case has been closely watched in ADA litigation circles and drew sharp reactions from defense lawyers. ADA defense attorney Philip Stillman called it “a nuclear strike at Potter Handy and one of their chief plaintiffs.”
The decision is the latest development to emerge from the cottage industry of ADA litigation in the Bay Area.
A ‘settle’ form of litigation
The ADA allows disabled plaintiffs who encounter barriers to accessibility in a store or restaurant to sue to remediate the barriers. If they win, their legal fees are paid by the defendant and they also can get statutory damages under California state law.
Most of the cases settle with the defendant agreeing to remedy the problem and making a cash payment to the plaintiff and his or her lawyer.
In 2021, ADA litigation in the U.S. District Court for the Northern District of California exploded. Filings tripled from 2020. ADA cases amounted to more than 25 percent of all new filings in the district that year, according to a Bay City News analysis.
Nearly 85 percent of the cases were brought by the Potter Handy law firm on behalf of a dozen disabled clients. One of the most prolific litigants was Whitaker, a quadriplegic who uses a wheelchair for mobility.
Whitaker filed hundreds of cases that year in the district, although he was living in Los Angeles. He alleged in every case that he had gone to patronize the defendant’s Bay Area place of business but encountered barriers to accessibility. In each case, he said that he intended to return when the barriers were removed.
Whitaker’s alleged “intent to return” was crucial to getting his cases into federal court; without a genuine intent to return he would not have proper legal standing and his case would be dismissed.
In April of this year, then-San Francisco District Attorney Chesa Boudin teamed up with his counterpart in Los Angeles to file a civil lawsuit against Potter Handy in San Francisco Superior Court, alleging that the law firm had filed thousands of lawsuits in federal court based on false testimony from its clients about their legal standing.
Whitaker was one the plaintiffs that the district attorneys specifically singled out.
Potter Handy fired back, publicly accusing Boudin, then facing what would ultimately be a successful recall, of filing the suit for political purposes.
The law firm vowed to fight the case and in August proved successful when the state court dismissed the case on grounds that the firm’s conduct was protected by California’s “litigation privilege,” a doctrine that prevents statements made in one court from being challenged in another.
Pursuing Potter Handy
The district attorneys’ lawsuit attracted the attention of Chhabria, a well-respected federal judge, known for a probing intellect and a no-nonsense style.
Like dozens of the other federal judges and magistrates in the district, Chhabria had a number of Potter Handy cases on his docket.
Acting on his own initiative, on April 18 and 19, he issued orders in at least 10 of his cases directing Potter Handy and its clients to file declarations under penalty of perjury laying out the factual basis for the claim that the plaintiffs had proper legal standing to bring their cases in federal court.
The orders all said that after the declarations were submitted, Chhabria would likely schedule an in-person evidentiary hearing “to test the veracity” of the declarations.
Potter Handy and its clients filed declarations but Chhabria, in one case, said the filings were “boilerplate submissions” that “were incomplete and misleading.”
A number of the cases settled and were dismissed, but in several the defendants took the opportunity to conduct “discovery” — depositions and compelled turnover of documents — from the plaintiffs.
One of those cases involved Peet’s Coffee Inc., owner of numerous coffee shops in the Bay Area. Peet’s was represented by Brett Burns, a litigation lawyer from Hunton Andrews Kurth LLP in San Francisco.
In the course of his discovery, Burns learned, and later presented to Chhabria, that in September 2021, Whitaker flew to San Francisco from Los Angeles, where he lived, supposedly as a part of an alleged plan to move to the city.
However, Whitaker did not engage with real estate agents or look at rental properties. Instead, over a two-hour period, he visited dozens of restaurants and stores, in each case allegedly intending to dine or shop. As a result of those visits, he filed 34 lawsuits.
Whitaker never actually moved to San Francisco; within a month of the trip he signed a new lease in Los Angeles.
For Peet’s sake
In his suit against Peet’s, Whitaker alleged that Peet’s outdoor tables did not have room for a wheelchair user to get his or her legs underneath. Whitaker didn’t go into the Peet’s, buy anything or talk to anyone, though he said he took photos.
Burns followed up the deposition by asking for Whitaker to produce documents — receipts, tickets, invoices — that would corroborate the statements that Whitaker made during the deposition, but the requests were largely stonewalled by Whitaker and his lawyers, even after the judge ordered production.
A hearing to consider the evidence about Whitaker’s standing was scheduled for May 31. Thirteen minutes before the hearing was to start, Whitaker’s lawyer filed a document that said that Peet’s had fixed the ADA violation and therefore Whitaker’s claim had become “moot” and there was no need for a hearing.
At Burns’ request, Chhabria went forward with the hearing and Whitaker had to testify under oath.
Whitaker admitted that that he didn’t have a plan to go back to all the businesses he had sued in the past — some 1,800 — but said that he had recently come up with a plan to return to the businesses he sued “going forward.”
In argument and post-hearing briefing, Potter Handy tried to convince the court that Whitaker did intended to return to Peet’s. It also argued that it had complied with the court’s discovery orders and, if it had not, any failure was an excusable mistake.
Chhabria was not persuaded.
The judge noted that he had the power to sanction litigants and lawyers who “unreasonably and vexatiously” multiply court proceedings. Such a sanction cannot be imposed for filing the initial complaint, but can punish bad faith actions taken thereafter if they prolong or multiply the proceedings.
Chhabria said Potter Handy should have immediately withdrawn the case when Peet’s challenged Whitaker’s standing, because standing was based on the lie that Whitaker planned to return to Peet’s when the barriers to accessibility were removed.
The judge said, “Whitaker all but conceded he had no intent to return to the Peet’s location at the time he filed his lawsuit. But speaking out of the other side of his mouth, Whitaker clung to the assertion that he had such an intent.”
The judge found that Whitaker’s false testimony and Potter Handy’s conduct in connection with the discovery justified ordering them to pay a portion of the legal expenses that Peet’s incurred in the proceeding.
Never going back
Chhabria is not the first judge in the district to conclude that Whitaker lied about his intent to return to a place he sued.
In May, U.S. District Judge Jacqueline Scott Corley dismissed Whitaker’s suit against the owners of the Alhambra Irish House, one of 14 suits that resulted from a one-day excursion from Los Angeles to Redwood City. She found that Whitaker’s sworn testimony was “not credible.”
“Nothing in the record supports a finding that in May 2021 he intended to return to every business he had sued, let alone an intent to return to the Alhambra Irish House,” the judge concluded.
In June, U.S. District Judge Yvonne Gonzalez Rogers dismissed Whitaker’s suit against the owner of Deja Vu Juice Bar in San Mateo, concluding that Whitaker did not plausibly allege that he intended to return to the juice bar when the alleged barrier to accessibility — tables without sufficient clearance for a wheelchair — was remediated.
“It’s unfortunate to think about how many local businesses in the Bay Area, especially mom-and-pop shops barely surviving the pandemic, may have been affected by this kind of ADA litigation and settled because they didn’t have the financial resources to mount a defense.”Moji Saniefar, Palo Alto ADA attorney
While other judges have discredited Whitaker’s testimony, Chhabria’s imposition of monetary sanctions and the fact that the sanctions are directed at Potter Handy as well as Whitaker raises the stakes considerably.
A Bay City News analysis found that nearly 6,000 Potter Handy ADA cases were resolved in California in the four years preceding the district attorneys’ lawsuit. Not all of the cases settled, but most did.
The district attorneys alleged in their suit that Potter Handy cases generally settle for between $10,000 and $20,000 per case. If the lower end of the district attorneys’ estimate were to be used as an order-of-magnitude estimate, the firm’s settlements on behalf of its clients for that period would approach $60 million.
Moji Saniefar is a lawyer at the firm Sheppard Mullin in Palo Alto who has defended ADA cases. After reading Chhabria’s decision, she commented, “It’s unfortunate to think about how many local businesses in the Bay Area, especially mom-and-pop shops barely surviving the pandemic, may have been affected by this kind of ADA litigation and settled because they didn’t have the financial resources to mount a defense.”