SAN FRANCISCO (CN) — A contingent of Chinatown merchants crammed into a small conference room on Stockton Street in San Francisco on Friday anxious for answers from District Attorney Chesa Boudin, who vowed to help them protect their livelihoods by taking “unscrupulous” attorneys and law firms to court to recover thousands of dollars already paid to settle boilerplate Americans with Disabilities Act cases.
Friday’s group represented just a handful of the 300 small business owners hit with lawsuits by Potter Handy, a San Diego-based law firm accused of exploiting state and federal disability laws to make a quick buck.
A lawsuit filed jointly by Boudin and Los Angeles District Attorney George Gascón in San Francisco County Superior Court in April claims the firm’s attorneys file thousands of ADA lawsuits on behalf of a handful of disabled clients, then pressure the owners to settle as quickly as possible for amounts between $10,000 and $20,000.
“We cannot and will not allow lawyers to enrich themselves by abusing the law and shaking down and extorting money from hardworking small business owners, particularly when they are targeting folks they know do not have access linguistically or financially to any ability to defend themselves,” said Boudin, whose office began investigating Potter Handy and its “drive-by” ADA lawsuits a year ago.
“This lawsuit is a major step in not only protecting all of you and other businesses against similar lawsuits in the future, it is also a major step in our effort to get you back the money this law firm has taken from you improperly,” Boudin said, triggering a round of applause from the crowd.
Potter Handy has not yet responded formally to the lawsuit, but partner Dennis Price called its allegations a "heinous lie" in an interview last month.
He accused Boudin and Gascón — both facing recall elections in June — of using the lawsuit to garner votes from the Asian American and small business communities.
But the district attorneys believe the sheer number of lawsuits filed by Potter Handy indicate they are bogus, since the plaintiffs could not have possibly encountered each barrier they list, let alone intend to return to the businesses that in many cases are located hundreds of miles from where they live.
At Friday’s town hall, Assistant District Attorney Gabriel Markoff called the suits wide-scale fraud and said the courts are beginning to take notice.
"The federal judges who oversee the cases Potter Handy files are beginning to issue orders requiring Potter Handy to start actually backing up what they’re saying,” he said.
These orders to show cause demand that the disabled plaintiffs show that they have standing to pursue their cases in federal court by proving a genuine intent to return to the business in the future.
“Two facts give us a lot of hope. Potter Handy has at least for now stopped filing new cases of this kind in the Bay Area,” Markoff said, citing a recent report by Bay City News. "Also it was just brought to our attention yesterday that one of the federal magistrate judges overseeing a Potter Handy case threw out one of these cases, and even pointed out numerous discrepancies in Brian Whitaker’s sworn testimony.”
Plaintiff Whitaker, a serial filer in the Northern District, brought that case against the owner of the Alhambra Irish House in Redwood City. U.S. District Judge Jacqueline Scott Corley tossed the case Thursday, finding that Whitaker lacks standing to bring his case in federal court because he has no present or future residential connection to Redwood City aside from traveling there “for the purpose of finding business establishments to sue.”