Law Firm That Specializes in Suits Against Small Businesses Wanted Its Fees Boosted, Though It Obtained For Its Client Only $4,000 in Statutory Penalty Under California Law and Expended Minimal Number of Hours
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday affirmed an award of $15,000 in attorney fees to a firm that specializes in filing lawsuits against small businesses for breaches of the Americans With Disabilities Act, rejecting the firm’s protest that the District Court erred in finding that the full $34,873.50 it claimed was excessive in light of it obtaining only a $4,000 statutory penalty, assessed based on the lack of a handicapped parking space.
Losing the appeal was plaintiff Adam Ghadiri, who makes his living by filing actions under the federal Americans With Disabilities Act (“ADA”) and under the state Unruh Civil Rights Act which requires a minimum award of $4,000 for any violation of the ADA. Although Ghadiri filed the action in pro per, as he customarily does, he turned this one over to The Center for Disability Access (“CDA”), a division of the San Diego law firm of Potter Handy, LLP.
A three-judge panel—comprised of Circuit Judges Ronald M. Gould and John B. Owens, joined by District Court Judge Edward R. Korman of the Eastern District of New York, sitting by designation—upheld a Nov. 12, 2019 order by then-District Court Judge Andrew J. Guilford of the Central District of California (now a private judge). In a memorandum opinion, the panel found no abuse of discretion on the part of Guilford, whose order setting attorney fees, as provided for by the ADA, declares:
“The amount of time and money spent completing various tasks for this case was excessive. For example. Plaintiff’s counsel racked up nearly $2,000 in fees ‘reviewing’ Plaintiffs case file….But at that point, there had been virtually no activity in the case. So the case file consisted mostly of Plaintiff’s six-page amended complaint and Defendants’ ten-page answer. Surely, reviewing these documents didn’t warrant almost $2,000 in fees. Thus, for these and other reasons, the hours spent on this case were unreasonable, and Plaintiff’s counsel’s fee request must be reduced accordingly.”
Guilford went on to say:
“It’s obvious to the Court that it’s unreasonable to have an hourly billing rate higher than or close to 12% of the statutory damages of $4,000 awarded m this case, even with injunctive relief, which is modest in this case.
“The Court thus reduces the amount of fees requested to reflect a more reasonable rate.”
Guilford also awarded $1,969.46 in costs, as requested, and issued an injunction “requiring Defendants to make the Carpet and Linoleum City facilities accessible to individuals with disabilities to the extent required by the Americans With Disabilities Act.”
He said the $16,969.46 total award in attorney fees and costs “sufficiently incentivizes attorneys to enforce the law, while recognizing the hardship imposed by ADA litigation on small business, such as the business in this case.”
The business Ghadiri sued, along with its principals, was Carpet & Linoleum City, which both Guilford and the Ninth Circuit described as a “modest” retail store. It’s located in Long Beach.
The judge acted in response to opposition to the fee request filed by the store’s attorney, Ara Sahelian of Laguna Hills. He said in the opposition:
“The Potter Handy firm employs the same template for a motion for summary judgment, which it files in hundreds of cases. There are naturally small variations to it which require attorney time, but for the most part, the template remains intact.
“Therefore, attorney’s fees exceeding $34,000 for simply filing a motion for summary judgment is exceedingly unreasonable.”
He went on to remark:
“The sole issue in the case was the single accessible parking space which was unavailable for a short period of time, as the defendant was re-surfacing his parking lot. To bill this defendant over $35,000 is an abuse of Congress’s mandate for the private enforcement of the ADA.
“Had the Potter Handy firm been reasonable in their initial demand, this motion would not have been necessary. But it pays for Potter Handy to be unreasonable. If the demand is excessive, and a defendant capitulates, they profit. If a defendant does not capitulate, and instead disputes the amount, it gives Potter Handy an opportunity to employ a standard fee motion template, and demand that the court award an additional $4-$5000 for having to bring such a motion. Viewed from any angle it is a win-win for Potter Handy.”
Ninth Circuit Opinion
Sahelian said it was “obvious” that “the billing is well-padded,” and the Ninth Circuit panel agreed. It recited:
“Before Ghadiri retained CDA, virtually no activity had taken place in the case, so that the case file consisted mostly of a six- page complaint and a ten-page answer. In the four months that Ghadiri was represented by CDA. only one motion was filed—Ghadiri’s summary judgment motion, for which CDA did not even file a reply. Discovery in the case was also modest. The only deposition taken in the case was Appellees’ deposition of Ghadiri. As CDA itself noted in its motion for attorney’s fees before the District Court, this ‘case has not seen a tremendous amount of work.’
“Nevertheless, despite the minimal amount of work required, CDA billed 75.8 hours and moved for an award of $34,873.50 in attorney’s fees after prevailing on summary judgment.”
In declaring that there was no abuse of discretion, the opinion says:
“[T]he District Court had great familiarity with cases alleging violations of the ADA and its California state law equivalent. Indeed, at the fee hearing, the District Court mentioned that ‘[ADA] cases have come to take up...maybe 20 percent or more of the calendars of District Court judges across the Central District.’ ”
The opinion says that “[u]nder these circumstances, the District Court’s ‘assessment’ of the reasonableness of time spent on activities like case analysis, motion drafting, and discovery-related tasks” is entitled to “considerable deference.”
Plaintiff’s Litigation Activity
The memorandum opinion says of Ghadiri:
“A review of cases on PACER indicates that Ghadiri has filed over 100 lawsuits in the Central District of California since 2018, which commonly allege that small businesses in the region fail to designate handicapped parking or provide handicapped bathrooms. Ghadiri often brings lawsuits for injunctive relief and the $4,000 statutory minimum damages under California law. Ghadiri frequently files his complaints in proper, using the same template that he used in tins action. In a handful of cases. Ghadiri is represented by counsel, including his attorneys in this case….Ghadiri’s lawsuits often settle. Indeed, because it appears that Ghadiri is willing to settle for $4,000, it may not pay for a defendant to retain counsel and litigate the case at the additional risk of paying Ghadiri’s counsel fees should he prevail.”
On Sahelian’s website, Ghadiri is quoted as saying in a deposition that he has no source of income other than proceeds from his ADA actions. In a deposition appearing,
Expanding on the facts in the case, Sahelian told the METNEWS yesterday:
“Plaintiff sued a carpet and flooring store in Long Beach, over an hour away from his residence, alleging that its parking lot did not have a handicap parking space. At the time of Plaintiff’s visit the owner was having the parking lot resurfaced, and the line markings, designating parking spaces, had been erased.
“Despite the absence of line markings, Plaintiff was still able to park, to exit his vehicle, to go into the store, and to obtain samples. However, Plaintiff claimed in doing so he suffered difficulty and discomfort (anxiety), as he was concerned about falling. While Plaintiff expressed concern about falling, he could not recall whether he walked with or without the aid of an assistive device on that day, unsure whether he used a cane, a walker, or no assistive device at all.”
The case is Ghadiri v. Carpet and Linoleum City, 19-56345.
Copyright 2020, Metropolitan News Company