The government is offering $10,000 grants amid a wave of lawsuits challenging disability access.
Bloomberg CityLab

By Amy Yee

March 6, 2023

Nearly 40 years ago, Paul Geffner opened Escape from New York Pizza in San Francisco and expanded to five restaurants across the city. But life ground to a halt during the Covid-19 pandemic. “It was an extinction event for small business,” said Geffner. 

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Only two of his pizzerias survive today. On top of myriad challenges facing owners — including inflation, blocked supply chains and labor shortages — he received another blow in 2021: a lawsuit for accessibility violations. 

Geffner was not the only business owner hit with litigation. The number of filings in US federal court under the Americans with Disabilities Act reached a record in 2021, and they were especially high in California and New York. Such lawsuits are a way that private citizens seek enforcement of protections under the landmark civil rights law.

But the district attorneys in San Francisco and Los Angeles have accused the law firm in the suit against Geffner of filing thousands of fraudulent ADA claims that exploit small business owners, many of them immigrants. In general, there is little support and few guidelines to help existing small businesses comply, unlike other regulations such as city health inspections.

To aid small businesses like Geffner’s and improve accessibility, San Francisco launched a program last year to help owners comply with the ADA. The city is granting businesses up to $10,000 to make renovations or hire inspectors, in what may be the first program of its kind in a major city. 

“They have so many issues and this is another cost,” said Katy Tang, executive director of the San Francisco Office of Small Business, which is running the program. Tang acknowledged that small enterprises are overwhelmed by ongoing financial and business challenges, in addition to navigating the complex law. “We hand-hold them through the process.”

Small enterprises and mom-and-pop shops are also often unaware of what confusing regulations mean for them. As part of its program, San Francisco has stepped up education about ADA regulations, sent out thousands of notices to businesses and increased outreach.

The initiative follows a 2016 ordinance that mandated access improvements but stalled during the pandemic. In September 2021, the law was amended and implementation began.

So the city is first prioritizing accessible entrances to ensure businesses are free of steps, slopes, excessively heavy doors or other structural barriers, like entryways that are too narrow for a wheelchair.

“This is not meant to put anyone out of business,” said Tang. “They have to make minor adjustments in year one.”

Other common renovations include installing a power door operator; modifying bathrooms, counters, tables and chairs; and hiring inspectors, said Tang. ADA compliance can be complex with variations depending on building age, architecture and local topography, such as hilly streets.

Geffner got a $10,000 grant to hire an inspector, change counters, buy new tables, modify entrances and more at his two restaurants. “It’s nice to see the city defend us for a change,” said Geffner. 

Renovations cost more than the grant, though the funding helped. But Geffner also paid an undisclosed amount to settle the lawsuit against him.

In an April 2022 lawsuit, the San Francisco and Los Angeles district attorneys accused Potter Handy, the law firm in the case against Geffner, of fraud and siphoning tens of millions of dollars from small businesses forced to settle litigation. Many of the businesses were in San Francisco’s Chinatown, they noted in their complaint.

Businesses in San Francisco’s Chinatown were targeted in lawsuits filed by serial plaintiffs.

Photographer: Justin Sullivan/Getty Images 

An investigation by the former San Francisco district attorney said that Potter Handy sued businesses over alleged ADA violations that could not have existed, “such as suing Chinatown restaurants for having inaccessible outdoor dining tables at a time when those restaurants were only offering takeout service due to the Covid-19 pandemic.”  

The 2022 filing by San Francisco and Los Angeles district attorneys was dismissed due to a litigation privilege, which protects the parties in a lawsuit from defamation claims. But in October 2022, Brooke Jenkins, San Francisco’s new district attorney appealed the court ruling. “California law does not allow attorneys to illegally exploit the Americans with Disabilities Act in this fashion,” said Jenkins. “We are filing this appeal to bring clarity to the law and hold Potter Handy accountable for its years-long alleged fraud scheme.” 

Potter Handy said in an email that a lawyer who represented several serial plaintiffs in ADA lawsuits is no longer employed by the firm. It didn’t respond to request for further comment.

When threatened with a lawsuit, many owners believe they have little recourse other than to pay plaintiffs’ settlements ranging from about $10,000 to $20,000, to avoid the even greater potential cost of litigation.

“It’s a soft spot in the legal system where it’s cheaper for small business to pay than to fight it,” said Geffner.

The expense and stress of litigation can be another nail in the coffin for many small businesses that are barely surviving waves of challenges.

“[The lawsuits] are particularly challenging when coming out of the pandemic and downtown neighborhoods are hollowed out due to remote work,” said David Chiu, San Francisco attorney general. 

Despite these instances of alleged abuse, private lawsuits under the Americans with Disabilities Act remain a key means of ensuring accessibility, said Michelle Uzeta, senior attorney with the Disability Rights Education & Defense Fund in Berkeley, California. But “many business owners are not aware of their obligations to disabled people until they are sued,” she said.

That’s why she called San Francisco’s new program a “model for other cities.”

David Levine, professor at University of California College of the Law, San Francisco, has also suggested a cure period, “a step where businesses have time to correct the problem. Lawsuits shouldn’t be tied to some automatic penalty.”

The desire to help rather than penalize small businesses is especially significant in San Francisco, where the pandemic and remote work have taken a particular toll on its struggling downtown.

“Downtown is a ghost town. It’s really scary,” said Geffner, who was forced to cut half his staff of about 100 during the pandemic when he closed restaurants for the first time in four decades. “We’re doing what it takes to survive.”

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