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DA Chesa Boudin sues to deter ‘fraudulent’ ADA lawsuits targeting small businesses

District Attorney Chesa Boudin speaks at a press conference announcing the lawsuit against Potter Handy, LLP in Chinatown on April 11, 2022. | Han Li

San Francisco District Attorney Chesa Boudin announced a lawsuit Monday against a Southern California law firm that allegedly abused the Americans with Disabilities Act to target small businesses for financial gain.

Boudin—the progressive prosecutor who’s facing a recall in June—is teaming up with Los Angeles District Attorney George Gascón, who formerly served as DA in San Francisco, to sue Potter Handy, LLP, a San Diego-based law firm that has represented clients who filed numerous lawsuits against small businesses based on ADA laws. Many cases were based on fraudulent claims, Boudin said, and they are believed to have ended with business owners paying thousands of dollars in settlements.

“Small businesses are such a valuable part of our city and our community,” Boudin said in the news conference at Magical Ice Cream shop on Grant Avenue in Chinatown. “This is also one of the 250 small businesses that have been victimized by fraudulent lawsuits.”

The lawsuit is asking the firm to immediately stop filing similar ADA lawsuits and to return settlement money it has received to small businesses. Potter Handy didn’t respond to a request for comment.

Since the start of the pandemic, many small businesses in San Francisco, including immigrant-owned businesses in Chinatown, have received legal letters with alleged ADA violations posted on their entrances, counters or even the store’s website. The notes claim the businesses are not accessible for people with a disability or complying with ADA law. 

Samuel Chen, the owner of Magical Ice Cream, told The Standard that he received a letter about his outdoor dining tables not being accessible.

Magical Ice Cream owner Samuel Chen at a press conference about the Americans with Disabilities Act lawsuit on April 11, 2022. | Han Li

“It’s heartbreaking,” Chen said, “Without a word of asking for help from the staff, they just send a letter asking for $24,000.”

Chen said he hopes the DA’s action will make it more “fair” between the small businesses and those filing ADA claims. 

Last year, both Boudin and Mayor London Breed went to Chinatown and vowed to provide more assistance to businesses. In Boudin’s lawsuit, he slammed the law firm Potter Handy LLP for using a “business model” to file thousands of lawsuits across California.

Though the ADA is a federal law, Boudin’s lawsuit is based on California law. He accused the law firm of intentionally filing “boilerplate” lawsuits that claimed the clients had encountered barriers or deterred from patronizing the businesses, and that these customers genuinely intended to return to the businesses but knew these claims were false.

Lily Lo, a longtime Chinatown activist and CEO of the Northeast Community Federal Credit Union, told The Standard that the volunteer group in Chinatown has helped more than 100 Chinese immigrant-owned businesses owners citywide deal with ADA lawsuits. Many of them speak limited English so they choose to settle the lawsuits, Lo said. The amount of settlement money is often more than $10,000.

Monday’s press conference turned chaotic as several pro-recall protesters gathered outside of the shop and began shouting at Boudin. The recall campaign also issued a statement after the news conference.

“Chesa’s press conference today is just another publicity stunt and is ‘too little, too late’ for businesses that have been calling for help for years,” Mary Jung, the recall campaign chair, said in a statement. “While he claims that he is helping Chinese business owners, he is completely failing to address the significant spike in robberies, retail theft, and violence under his watch.”