California Court of Appeals Ends Lawsuits Against Online-Only Businesses in California and Calls on DOJ and Congress for Inaction.
In a precedent, 35-page opinion, the California Court of Appeals yesterday closed the door on California lawsuits against online-only businesses, agreeing with the United States Court of Appeals for the Ninth Circuit that the websites are not “public accommodations” covered by Title III of the ADA. She also held that the creation and maintenance of an inaccessible website cannot constitute intentional discrimination within the meaning of the Unruh law.
The blind applicant in Martinez c, Cot’n Wash, Inc. alleged that the sole online retailer engaged in disability discrimination in violation of California Unruh law by having a website it could not use with its screen reader software. There are two ways to establish a violation of the Unruh law: prove (1) intentional discrimination; or (2) a violation of Title III of the ADA. Martinez asserted that he alleged enough facts to establish a violation under both theories.
Martinez struck on both counts.
With respect to the theory of intentional discrimination, Martinez argued that the retailer’s failure to take action in response to its letters of demand complaining about barriers to website accessibility constituted a intentional discrimination. The Court disagreed, reiterating that “[a] the applicant cannot “rel[y] on the effects of an apparently neutral policy on a particular group…to infer…a discriminatory intent. The Court also said that “failure to address the known discriminatory effects of a policy” is not sufficient to establish intentional discrimination under the Unruh Act.
As to Martinez’s claim that the online-only retailer violated Title III of the ADA, the Court held that “even after reviewing the wording of the statute and considering the maxims of statutory interpretation and legislative history prior to the adoption of the law, we remain without a clear answer on the question of whether a purely digital merchant site can constitute a “place of public accommodation” within the framework of Title III. is therefore turned to what it called “the third and final stage of the interpretive process”.The Court explained:
In this phase of the process, we apply reason, practicality and common sense to the language at hand. Where there is uncertainty, we must consider the consequences that will flow from a particular interpretation. Based on such an analysis, we ultimately conclude that adopting Martinez’s proposed interpretation of “place of public accommodation” would be tantamount to adopting the view that Congress (through its inaction since the enactment of the ADA) and the DOJ (through its reluctance to write regulations) have both tacitly rejected.
The Court observed that since 2010, Congress and the DOJ have recognized the need to determine by statute or regulation whether and under what circumstances a website constitutes a “place of public accommodation,” but have chosen to do nothing. suggesting that neither the DOJ nor Congress “officially approves” the ADA’s coverage of websites. The Court said that:
The failure of Congress to provide clarification in the face of known confusion – and, to a lesser extent, the similar failure of the DOJ – is no reason for us to step in and provide such clarification. On the contrary, it is a reason for us not to do so. This is especially true, given that providing clarification into how Martinez’s demands could have far-reaching effects far beyond this case, neither of which has been the subject of a legislative inquiry.
In short, the Court said it was not for it “to adopt an interpretation of the law that is not dictated by its language, especially in the face of…legislative and agency inaction.”
Martinez will likely file a petition for review by the California Supreme Court, but that court’s review is entirely discretionary and less than five percent of petitions are granted. Thus, this decision will likely set a binding precedent for all California trial courts.
The importance of this decision for online only businesses cannot be overstated. This means that plaintiffs cannot successfully sue them for having inaccessible websites in California state courts or federal courts. As noted, the United States Court of Appeals for the Ninth Circuit has long held that a website is not a public accommodation covered by Title III of the ADA. This decision will certainly reduce the number of lawsuits filed in California state courts and federal courts by plaintiffs lured by the Unruh Act’s $4,000 minimum damages provision.
The data underscores the importance of this decision. Relatively few website accessibility lawsuits have been filed in federal court in California, likely due to the Ninth’s Circuit’s stance on online-only businesses. The California plaintiffs preferred a state court where a few judges, so far, have been willing to allow lawsuits against online-only businesses and even found that having an inaccessible website could amount to intentional discrimination. under the Unruh.
Companies should keep in mind, however, that this ruling has little impact on claims relating to websites that relate to a physical facility where goods and services are offered to the public. Such websites would likely be considered a benefit or service of a physical public hosting location and would fall under the Title III non-discrimination mandate.