MOLSKI v. MANDARIN TOUCH RESTAURANT
359 F.Supp.2d 924 (2005)
United States District Court, C.D. California.
March 8, 2005.
While the Plaintiffs can choose the forum in which they bring a suit consistent with the principles of concurrent and pendant jurisdiction, the exclusive federal remedy allowed by Congress for suits brought under the ADA raises a number of jurisdictional concerns.
a. Standing
Following the February 7, 2005 hearing, the Court issued an Order to Show Cause why the individual Plaintiffs' federal claims should not be dismissed for lack of standing because the Court found there were substantial questions regarding the standing of the individual Plaintiffs in these cases to seek injunctions under the ADA.
Prior to that hearing, the Court ordered Plaintiff DREES to show cause why its claims should not be dismissed for lack of standing. An organization may have standing to sue on behalf of its members if (1) its members would otherwise have standing to sue in their own right, (2) the interests it seeks to protect are germane to the organization's purpose, and (3) the participation of individual members in the lawsuit is not required. Hunt v. Washington State Apple Advertising Comm'n,432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). DREES asserts the same claims as the individual Plaintiffs; it would clearly not have standing if the individual Plaintiffs did not have standing. And even if the individual Plaintiffs did have standing, DREES does not have standing in these cases. The third requirement for organizational standing is not met for the following reason: the individual Plaintiffs' participation is required in these cases, because they must present evidence to establish their own standing. See Disabled In Action of Metropolitan New York v. Trump Int'l Hotel & Tower, No. 01 Civ. 5518, 2003 WL 1751785, at *10, 2003 U.S. Dist. LEXIS 5145, at *32-33 (S.D.N.Y. April 2, 2003) (dismissing organizational plaintiff for lack of standing on this ground). Moreover, beyond the standing requirements mentioned above, other prudential standing doctrines suggest that DREES lacks standing in these cases, including the "general prohibition on a litigant's raising another person's legal rights," Allen v. Wright,468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984), and that courts "limit access to the federal courts to those litigants best suited to assert a particular claim," Gladstone Realtors v. Village of Bellwood,441 U.S. 91, 100, 99 S.Ct. 1601, 60 L.Ed.2d 66 (1979). See Access 123, Inc. v. Markey's Lobster Pool, Inc., No. Civ. 00-382-JD, 2001 WL 920051, at *4, 2001 U.S. Dist. LEXIS 12036, at *9-12 (D.N.H. Aug.14, 2001) (dismissing organizational plaintiff for lack of standing on these grounds). In the cases currently before the Court, DREES merely repeats the claims brought by the individual Plaintiffs. The Court believes that DREES is added as a plaintiff to lend an aura of legitimacy to this predatory litigation as part of the strategy to encourage settlement. However, the individual Plaintiffs appear to be
the better parties to assert their own claims. For all of these reasons, the Court concludes that DREES lacks standing in these cases. Accordingly, this Court has dismissed DREES's claims under the ADA. b. Subject Matter Jurisdiction
The Court ordered the Plaintiffs to show cause why their federal claims should not be dismissed for lack of subject matter jurisdiction as sham complaints, brought as a pretext to gain access to the federal courts. The Supreme Court has held that "a suit may sometimes be dismissed for want of jurisdiction where the alleged claim under the Constitution or federal statutes clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous." Bell v. Hood,327 U.S. 678, 682-83, 66 S.Ct. 773, 90 L.Ed. 939 (1946). While the Court believes the ADA claim is asserted for the purpose of obtaining federal jurisdiction, the Court cannot conclude that the ADA claim is clearly immaterial or wholly insubstantial. The ADA claim is an element of the state law claims and therefore is not immaterial to the state law claims asserted. Thus, the court would have jurisdiction over the ADA claim. That the ADA claim is an element of the state law claims, however, does not mean that there is independent federal jurisdiction for the state law claims. Wander v. Kaus,304 F.3d 856, 859 (9th Cir.2002).
1. A hearing was held on these Orders to Show Cause on February 7, 2005, the Honorable Edward Rafeedie, presiding. At that hearing, the Court announced its tentative ruling, including the findings of fact and conclusions of law that form the basis of this order. Despite requesting (and receiving) a continuance, purportedly to allow counsel time to prepare for that hearing, the Plaintiffs did not challenge any of the Courts tentative findings or conclusions, and did not present any oral argument.
2. The Court has obtained and read the 223 complaints that it that it was able to recover. A handful of complaints filed in the Northern and Central Districts were unavailable for various reasons. The Court also identified, but was unable to obtain, at least 11 complaints filed in the Eastern District.
3. Those claims are 1) Violation of California Civil Code § 54, et seq., The California Disabled Persons Act ("CDPA"); 2) Violation of California Health & Safety Code § 19955, et seq., Denial of Accessible Sanitary Facilities; 3) Violation of California Civil Code § 51, et seq., The Unruh Civil Rights Act; and 4) Violation of California Business & Professions Code § 17200, et seq., Unfair Business Practices.
4. The Court has attached a copy of the letter sent to Kathy McInerney as an appendix to this order. When citing or quoting the letter, this order refers specifically to that letter. The record also contains the letters that The Frankovich Group sent to the other defendants in Mandarin Touch and Yang Chow. For all relevant purposes, the letters are identical. [Editor's Note: The Appendix is not included in this publication].
5. Pursuant to C.D. Cal. Local Rule 83-3.1.2, the Model Rules of Professional Conduct of the American Bar Association may be considered as guidance when disciplining attorneys.
6. Although this Court has focused on three specific violations of the rule, the letter itself recognizes that it has actually given advice about seven different matters. See McInerney Letter at 5 ("We find all to [sic] often that many defendants are not properly advised as to their position in the litigation, insurance coverage issues, injunctive relief sought, damages, the tactics of insurance defense attorneys, attorneys' fees, and the use of an early mediation/settlement conference to resolve the matter."). As the Model Rules and relevant case law make clear, it is not the place of adverse counsel to advise an unrepresented defendant on these matters.
7. There should be no doubt that advising a party against retaining counsel constitutes legal advice under the Rule. The Model Rules specifically state that an attorney "shall not give legal advice to an unrepresented person, other than the advice to secure counsel." ABA Model Rules of Prof'l Conduct 4.3 (emphasis added). Thus, by its very words, the Rule recognizes that a recommendation to secure counsel qualifies as advice. It necessarily follows that advising an unrepresented party against retaining counsel constitutes legal advice as well.
8. Similar contradictions occur in complaints filed on behalf of other Frankovich Group clients. For example, in Jankey v. Mister D's Liquor Market, CV 04-9112 (C.D.Cal.2004), Jankey was unable to access the sidewalk in front of a liquor store due to a lack of ramps or cut curbs. Jankey blew his horn, at which time an employee came out of the store and assisted him with his order. Complaint at ¶ 22. Jankey noted other violations before leaving without attempting to enter the store. Despite a lack of any physical contact with an architectural barrier, Jankey then makes an identical claim of bodily injury "including, but not limited to, fatigue, stress, strain and pain in wheeling and attempting to and/or transferring." Id. at ¶ 28.
9. Further proof of canned allegations comes from a letter that The Frankovich Group sends to prospective clients, which outlines its litigation philosophy. See Ex. B to Declaration of Thomas E. Frankovich. The letter informs prospective clients that "[y]ou should also know that we use the terms `emotional distress' and `negligence as we prosecute your case. Although we use those terms, we do not file a cause of action based upon negligence, the negligent infliction of emotional distress, or the intentional infliction of emotional distress." The Frankovich Group made good on its pledge. In every case filed in 2004, Frankovich Group clients allege emotional distress and negligence without bringing a cause of action for negligence, or the negligent or intentional infliction of emotional distress. But how could The Frankovich Group have known this in advance? Surely it was likely that in (at least) one of the 223 cases, a client would be injured as the result of negligence, or not suffer emotional distress. That fact that 223 separate cases unfolded exactly as described in advance suggests that the identical allegations of emotional distress were contrived.
10. The requested damages accumulate during this time despite a lack of any notice to the defendants, who presumably would have some interest in mitigating their liability by performing the repairs immediately.
11. Moreover, it is unclear whether the sort of daily damages requested are available under California law. California courts read a statute against permitting cumulative daily damages unless the statute specifically authorizes them. See Hale v. Morgan,22 Cal.3d 388, 401, 149 Cal.Rptr. 375, 584 P.2d 512 (1978)("Uniformly, we have looked with disfavor on ever-mounting penalties and have narrowly construed the statutes which either require or permit them."). Neither the Unruh Act nor the CDPA specifically authorize daily damages, and thus, it is questionable whether such damages would be permissible under California law. 12. On November 18, 2004, a jury, finding no violations of the ADA, unanimously ruled in favor of the Defendants.
13. This is implicitly pointed out in the aforementioned letter which is sent to all defendants. The letter notes that if the matter does not settle quickly, the cost of litigation will "start[] to rise, or as some may say, skyrocket."
14. Such an understanding is even reflected in some of the settlement agreements which the Plaintiffs lodged with the Court. See, e.g., Declaration of Thomas E. Frankovich, Ex. 61 (Settlement Agreement for Molski v. Valencia Lanes, Inc., CV 03-5455 (C.D.Cal.2003)) at ¶ 3("It is understood and agreed that this settlement is the compromise of a doubtful and disputed claim, and that the payment made is not to be construed as an admission of liability on the part of Releasees, and each of them, and that said Releasees deny liability therefor and make settlement reflected herein merely to avoid litigation and buy their peace.")(emphasis added).
15. There is no evidence that proves that the barriers alleged actually exist, and if they do, whether their removal would be "readily achievable." None of the 65 settlement agreements which the Plaintiffs submitted to the Court contains an admission of liability, and Molski lost the only case he ever took to trial (with the jury making a special verdict finding that no barriers existed). The Plaintiffs almost never need to prove their allegations of discrimination because considerable disincentives discourage defendants from litigating a matter on its merits.