News for the Hospitality Executive
ADA Defense Lawyer:
By Jim Butler and the Global Hospitality Group®,
Author of www.HotelLawBlog.com
February 16, 2011
For the most recent update on this topic, click here
The hotel lawyers at JMBM's Global Hospitality Group® see a lot of ADA cases and believe the claims will increase tremendously in the next few years as a result of the current political climate, new regulations, higher priorities assigned by the Department of Justice, and passionate private litigants seeking to make the world ADA-compliant.
We get several calls every week from people served with new ADA complaints. Most of these hotel and restaurant owners just want to resolve the litigation at the lowest possible cost, including both the compliance cost and legal fees. Of course they don't want to be sued by another plaintiff on the same, or similar claim a week later, but that is a somewhat different problem that we also deal with.
JMBM's ADA defense team has defended more than 400 ADA claims. We know almost all the plaintiffs, their strategies, their hot buttons, and their weaknesses. We know how to defend or settle cases with the least exposure to future claims and at the lowest all-in cost.
Ruskin's Common Law of Business Balance. We think that John Ruskin had it right in his famous Common Law of Business Balance. I grew up looking at John Ruskin's words every day, because my mother had taped it on the door of our refrigerator. For those of you who didn't have this advantage, here is his famous quote:
Common Law of Business Balance
It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money -- that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot -- it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.
John Ruskin (1819-1900)
How Ruskin's law applies to ADA defense cases. Here is an actual case study that has some important lessons for us in how to handle an ADA case - or rather how not to handle an ADA case. When the defendant first called us about this case two years ago, based on our experience with this plaintiff, we know we could've settled the case for an all-in settlement cost (including legal fees) of less than $50,000.
Although we substituted out of the case, we continue to receive notices of all developments after that and followed it with considerable interest. We were shocked to see that the new defense lawyer and client permitted this case to go to trial. And we hated to hear that the client lost the case, incurred huge legal fees with a "cheaper lawyer" for taking the case all the way to a judgment, and now is facing an additional $232,000 for plaintiff's legal fees that it will have to cover. We were also concerned about certain precedents that may have resulted from the trial court's ruling.
A case study in how not to handle an ADA defense?
Jim Butler and Marty Orlick | Hotel Lawyers
When sued by this serial plaintiff, the defendant Hotel made a good decision in contacting JMBM's Global Hospitality Group®, a team which has litigated more than 400 ADA cases for hotels, resorts, restaurants, shopping centers, retailers, wineries and banks,
We had a pretty good idea of the litigation scenario that would unfold. We also had litigated with the plaintiff and her counsel before and we had a good idea of their strategy and tactics. Just as important, we had a relationship and credibility with them. They were aware that we knew our way around the ADA block and that they would have to come to a resolution early in the lawsuit.
Based on our knowledge of this plaintiff attorney's typical game plan, we warned the defendant Hotel that if the case was not strategically managed, the plaintiff's attorneys' fees and costs would be astronomical. We presented the client with a comprehensive guideline for evaluating the case and coming to a resolution without litigation.
Our strategy involved an initial assessment of the architectural and programmatic access barriers at the Hotel and to put a resolution protocol in place. The first step was to contact plaintiff's counsel to meet on site and establish assessment and resolution protocol.
Mistake #1. This is where the defendant Hotel made its first mistake. After considering our strategy and resolution protocol, it decided that our hourly rates for implementing the strategy were too high, and they decided to retain counsel with a much lower hourly rate, but also little ADA defense experience. We substituted out of the case.
Mistake #2. Then the defendant Hotel and its inexperienced ADA counsel decided to undertake an aggressive and confrontational litigation posture. While resisting a "monetary shakedown" and fighting back is an understandable emotional response to these kinds of ADA lawsuits, a lawyer's job is to advise his or her client as to all available options and recommend a course of action based on facts, knowledge and experience. The client still makes the call. And in this case, it was the wrong one.
Mistake #3. Based on our knowledge of the plaintiff's counsel (who is very experienced in ADA claims) we knew that an aggressive litigation campaign was ill-advised, and that an out-of-court resolution was the most cost-effective for the Hotel. But the defendant Hotel and their bargain-rate attorney (with little ADA experience) took it to trial. An assessment of the architectural and programmatic access barriers at the Hotel, performed by a knowledgeable access consultant, would have revealed what the court found at trial: a number of access barriers existed at the Hotel. The trial judge heard the evidence and entered judgment for the plaintiff.
The result. The court awarded the plaintiff damages and attorneys' fees, expert fees and litigation costs. The Hotel now has to remedy the access barriers, pay damages and is on the hook for 5 times more than the estimated total cost of the defense we initially proposed.
Not surprisingly, the plaintiff's counsel filed a motion to be awarded nearly $250,000 in attorneys' fees, and the Hotel filed an objection asking the court to reduce the fees to a fraction of what the plaintiff is seeking. The motion is pending. Ironically, the inexperienced and lower billing rate ADA defense counsel for the Hotel asked us to file a declaration in opposition to the plaintiff's fee motion.
What is most unfortunate is that it was all avoidable.
As Ruskin said: It's unwise to pay too much, but it's worse to pay too little.
Understanding the anatomy of ADA cases is critical in determining outcome. It can be the difference between early resolution and going to trial and losing. It can be the difference between paying the fees charged by an experienced attorney for an economical resolution and losing a court case and thereby becoming liable for hundreds of thousands of dollars in damages, remediation, and plaintiff's fees and costs.
________________________Martin H. Orlick is one of the top ADA defense lawyers in the country, having helped clients with more than 400 ADA cases for hotels and other businesses. He is also is a senior member of the law firm's Global Hospitality Group®, a partner in the real estate department, and a member of the American College of Real Estate Lawyers (ACREL). For more information about ADA compliance and defense, contact Marty Orlick at 415.984.9667 or [email protected]
This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We've done more than $60 billion of hotel transactions and have developed innovative solutions to unlock value from troubled hotel transactions. Who's your hotel lawyer?
Our Perspective. We represent hotel lenders, owners and investors. We have helped our clients find business and legal solutions for more than $60 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at [email protected] or 310.201.3526.
Jim Butler is a founding partner of JMBM and Chairman of its Global Hospitality Group®. Jim is one of the top hospitality attorneys in the world. GOOGLE "hotel lawyer" and you will see why.
JMBM's troubled asset team has handled more than 1,000 receiverships and many complex insolvency issues. But Jim and his team are more than "just" great hotel lawyers. They are also hospitality consultants and business advisors. For example, they have developed some unique proprietary approaches to unlock value in underwater hotels that can benefit lenders, borrowers and investors. (GOOGLE "JMBM SAVE® program".)
Whether it is a troubled investment or new transaction, JMBM's Global Hospitality Group® creates legal and business solutions for hotel owners and lenders. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.
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