California Court of Appeal Holds That Solely Online Retailers Without a Physical Location Are Not Liable for Inaccessible Websites Under the ADA and California’s Unruh Civil Rights Act

California’s Unruh Civil Rights Act (Civil Code section 51, et seq.) confers a right to a civil action against businesses that intentionally discriminate against individuals with disabilities or, alternatively, violate the Title III of the Americans With Disabilities Act (“ADA”) accessibility requirements applicable to a “place of public accommodation.”

Despite the internet’s central role in commerce over the past 20-plus years, Congress hasn’t enacted amendments that would address this question.  The U.S. Dept. of Justice (“DOJ”), which is charged with enforcement of the ADA, has filed numerous amicus briefs advocating this position, but significantly, hasn’t issued any regulations or formal guidance to this effect. This lack of practical clarification and guidelines  for businesses meant a lot to a panel of the 2^nd District California Court of Appeal, which recently held, in a case of first impression, Martinez v. Cot’N Wash, Inc., 2022 WL 3025828 (Cal. App. Ct. August 1, 2022), that a company which sold its products exclusively online – with no physical brick and mortar retail location – was not liable under the  Unruh Act for either intentional discrimination against individuals with disabilities or violation of Title III.

The federal circuits are split on this question. On the one hand, the First, Second, and Seventh Circuits have adopted the view that websites are public accommodations. On the other hand, the Third, Sixth, Ninth, and Eleventh Circuits have adopted the view that websites are not “public accommodations” under the ADA, but a denial of equal access to a website can support an ADA claim if the denial has prevented or impeded a disabled plaintiff from equal access to, or enjoyment of, the goods and services offered at the defendant’s physical facilities.

In Martinez, the Plaintiff/successor in interest to his visually-impaired and deceased brother’s estate alleged that the Defendant’s website, dropps.com, was not sufficiently accessible to the visually impaired as it lacked certain features, such as invisible alternative text to graphics and site maps to make it accessible to such individuals using screen-reading software. In a unanimous decision, the appellate panel affirmed the trial court’s order sustaining Defendant’s demurrer without leave to amend, holding that Plaintiff’s complaint failed to state a claim under the Unruh Act either for intentional discrimination against Plaintiff or that Defendant’s company website was a “place of public accommodation” within the meaning of Title III of ADA.

As to whether the Defendant’s website could support a claim of “intentional discrimination,” the Court of Appeal held that allegations about a disproportionate impact of the website’s features on what the court found was a “facially neutral” website and the Defendant’s failure to implement the changes demanded by Plaintiff’s counsel could not suffice alone to allow an inference of an intent to discriminate against individuals with disabilities. The court then turned to the question of the applicability of ADA Title III. While the appellate panel acknowledged that current California and 9^th Circuit caselaw recognizes that Title III’s accessibility requirements apply to websites of businesses that offer their products for sale at a physical location, it nonetheless found that: “Under current law, we cannot read this phrase [place of public accommodation] as including retail websites without any connection to a physical place.” In doing so, the appellate panel made a clear distinction regarding the application of ADA Title III’s accessibility requirements as to brick and mortar retailers versus solely online retailers with no physical location for their customers. According to the unanimous Division One panel, although a website can be considered a place of public accommodation under the ADA, and consequently actionable under California’s Unruh Act, a retail website without a physical location cannot.

Over the past several years, ADA Title III website accessibility claims, particularly on behalf of the visually impaired, have skyrocketed in a handful of states, perhaps most significantly in California and New York. In California, Plaintiffs’ counsel representing disabled individuals typically use the Unruh Act, along with Title III, and the Unruh Act’s statutory damages provision to pursue claims or litigation against businesses of all types and sizes. It has become routine for demand letters to be sent with a proposed complaint and a proposal for a quick settlement, emphasizing the minimum statutory damages of $4000 per violation, attorneys’ fees, and the cost of implementing potential injunctive relief in the form of website access upgrades. For companies that do not have a physical retail location, however, the Martinez v. Cot’n Wash decision gives a dispositive defense to such claims. It would not be surprising to see the Plaintiff pursue a Petition for Review of the decision to the California Supreme Court, which would have to be filed within 40 days. We will track any subsequent activity on the case and report on whether this occurs.