San Francisco DA Chesa Boudin announces lawsuit over alleged fraudulent disability access claims

San Francisco District Attorney Chesa Boudin announced Monday that his office is filing a civil lawsuit against a San Diego-based law firm for allegedly filing thousands of fraudulent disability-access lawsuits against small businesses in California.

Boudin said the law firm, Potter Handy LLP, has filed more than 250 lawsuits against small businesses in San Francisco alone, allegedly targeting small and immigrant-owned businesses and pressuring them into cash settlements to avoid fighting the lawsuits in court.

Boudin estimated that Potter Handy has garnered upwards of $10 million in settlements with the state's small businesses over allegedly fraudulent disability access lawsuits.

The San Francisco District Attorney's Office jointly filed the state lawsuit with the Los Angeles District Attorney's Office.

"Potter Handy has intentionally and repeatedly targeted economically vulnerable businesses that typically cannot afford the cost of going to court, of hiring lawyers or of dealing with the legal process, especially during the pandemic," Boudin said Monday during a news conference at a Chinatown ice cream shop that was sued by Potter Handy.

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Representatives for Potter Handy did not respond to a request for comment on the lawsuit.

Potter Handy's allegedly fraudulent lawsuits are frequently filed in federal court under the 1990 Americans with Disabilities Act, according to Boudin, which does not provide for financial damages.   However, the firm couples its federal claims with state-level claims under the Unruh Civil Rights Act, allowing it to seek at least $4,000 per violation, according to the lawsuit filed by the two district attorney's offices.

Boudin said an investigation conducted over the last year by his office found that the law firm has centered its business model around the allegedly fraudulent claims of improper access for people with disabilities, even suing businesses that have not even been certified as ADA compliant.

He alleged that attorneys at Potter Handy, some of whom lived in Los Angeles County but filed lawsuits in the Bay Area, claimed in many lawsuits that a lack of access for people with disabilities deterred them from returning to a certain business.

According to the lawsuit brought by the two district attorneys' offices, Potter Handy filed more than 800 ADA-compliance cases on behalf of a "serial filer" named as Orlando Garcia and 1,700 cases on behalf of a serial filer named as Brian Whitaker.

"Our investigation has shown that these serial filers could not have possibly visited businesses and encountered the violations they claim," Boudin said. "Some of the businesses, for example, were not open to the public at the time of the alleged violations; they were only open for takeout."

San Francisco Supervisors Aaron Peskin, whose district includes Chinatown, and Connie Chan, who represents Golden Gate Park and the Richmond district, said they have heard "heart-wrenching" and "devastating" stories from business owners about facing allegedly fraudulent lawsuits in addition to the COVID-19 pandemic.

Peskin added that similar legal tactics were used against small businesses and immigrant-owned businesses in the city even before the pandemic. 

"These people are making money ... and profiting from other people's loss and pain and dashing their dreams of becoming a small-business owner in San Francisco," Chan said.

Boudin said he hopes the lawsuit will result in an injunction to stop Potter Handy from mass-filing similar ADA-compliance claims in the future, as well as civil penalties.

He also expressed hope that Potter Handy will be forced to return the money it has collected from small businesses as a result of its allegedly fraudulent claims.

"These lawsuits have nothing to do with vindicating the rights of the disabled, and Potter Handy's conduct undermines the intention and purpose in functioning of disability rights legislation," Boudin said.