The owners of Elsy’s Restaurant on Mission Street have faced their share of roadblocks to operate in San Francisco.
For reasons that are still unclear, the San Francisco Planning Department delayed Elsy’s opening for eight months in 2006. In 2008, a corrupt restaurant inspector asked them for money in exchange for a food handler’s certificate. The inspector was later fired by the Department of Public Health. Finally, in 2009, they thought they would be able to focus on their Salvadoran cuisine.
Then in January 2010, noted serial litigator Thomas Frankovich sued Elsy’s for an alleged violating the 1990 Americans With Disabilities Act (ADA), which requires buildings to be accessible to people with disabilities. The lawsuit alleged that Craig Yates, who is paraplegic, had difficulty accessing Elsy’s cashier counter and bathroom.
As with most of the lawsuits filed by Frankovich, Elsy’s owners decided to settle and make the required alterations, which involved lowering the cashier counter about eight inches and building a new wheelchair-accessible bathroom. The old bathroom was in a back room near the kitchen and required negotiating a small set of stairs.
“All of this cost us money,” said owner Jaime Gonzalez, detailing the list of expenses: about $100,000 for the fixes and $17,000 to settle the lawsuit.
They aren’t the only ones. Frankovich has sued at least 23 businesses in the Mission since January 2010 — most of them small, minority-owned restaurants.
They join the thousands of businesses up and down California that Frankovich has sued for ADA violations.
“It can be the Mission, it can be the Tenderloin, it can be in the Embarcadero; if it’s not accessible, we will be there,” said Frankovich in an interview from his home in Mazatlan, Mexico. “Who do we sue? Off the top of my head, there are so many places that I couldn’t tell you.”
Critics say Frankovich violates the spirit of the law and is only interested in the settlement money he shares with the plaintiffs. Settlements can cost up to $20,000, according to the city’s Small Business Commission.
Typically Frankovich’s plaintiffs send a letter to business owners recounting their experience at the shop and asking that the ADA violations be remedied. If the establishment fails to respond, Frankovich files a civil rights lawsuit asking for damages under the state’s Unruh Civil Rights Act, enacted in 1974. The act provides statutory damages of $4,000 per visit.
Gonzalez said he answered the letter, apologizing and promising to fix the problems, but was sued soon after sending his letter. It’s unclear how much of the $17,000 settlement Frankovich received, but a 2007 SF Weekly article reported that a Los Angeles attorney fighting a similar lawsuit found that in previous cases the plaintiff walked away with $4,000 and Frankovich took about $20,000.
Most business owners sued by Frankovich refused to speak on the record and did not want their names to appear in an article associated with accessibility lawsuits.
Such ADA lawsuits have caught the attention of Senator Dianne Feinstein, who this week wrote a letter to state Senate President Pro Tem Darrell Steinberg (D-Sacramento) stating that the lawsuits are “shakedowns” that “threaten the viability of small businesses in our state.”
Last year state legislators considered a bill that would give business 120 days to remedy violations, but that failed to pass and now there is talk of proposing a 90-day “right-to-cure” period.
For now, Frankovich has the law on his side. Feinstein has said that if the state does not remedy the situation, she will ask Congress to take up the issue.
“I will consider introducing legislation in the U.S. Senate if this problem cannot be solved by the California State Legislature,” Feinstein wrote.
For struggling businesses in the Mission, being sued is a daunting test.
“All the businesses on the corridor feel very defeated,” said the owner of a business on 24th Street.
Two owners, including Gonzalez’ wife, have become ill from the stress.
“If I had known this would happen, I wouldn’t have opened a business in San Francisco,” Gonzalez said.
But Frankovich has no sympathy for businesses like Elsy’s.
Tenants, he said, know that landlords have passed the costs of lawsuits on to them.
Buildings have been out of compliance for years, Frankovich said. In his view, he’s making them accessible.
“I’ve been doing this almost 20 years,” he said. “It’s like us being in Afghanistan — is it ever going to end? No. People don’t want to do anything until they have to do it. Don’t you think they should have figured it out by now?”
Gonzalez and other business owners say that no one in the city bureaucracy warned them that their locations were out of compliance.
Currently the Small Business Commission is conducting outreach to businesses, but it has only two staff members for the entire city, said executive director Regina Dick-Endrizzi.
One of the biggest mistakes businesses make, Dick-Endrizzi said, is ignoring the letter that typically precedes that lawsuit.
“Once you get sued, you are going to pay money.”
In addition to informing businesses about how to comply with the ADA, the commission is providing small business loans to make the necessary fixes. On Tuesday, San Francisco Mayor Ed Lee committed an additional $1 million to the fund.
Elsy’s Restaurant reopened in March after being closed for a month and a half to make the neccessary alterations, and the owners are hoping to move past the episode. Their 24-year-old son, also named Jaime, who has an accounting degree from UC Santa Barbara and a knack for business, has come back to help.
“It took a toll on the entire family,” said the younger Gonzalez. “Hopefully now we can focus on being merchants.”
The San Francisco Small Business Commission has a web page with information about what businesses can do if they are sued.