San Francisco District Attorney Chesa Boudin, along with Los Angeles DA George Gascón, has accused one San Diego law firm of filing “thousands of fraudulent, boilerplate lawsuits” against small, often immigrant-owned businesses across the state, and coercing cash settlements from them for alleged accessibility violations.
The complaint from the district attorneys focuses on the San Diego law firm Potter Handy LLP, and the lawsuits it filed for Orlando Garcia, one of several “serial filers.”
“I know it was a shakedown,” said John Kim of Whiz Burgers, who ended up paying $10,000 late last year to a plaintiff he never met. “They’re professionals; they know what they’re doing.”
The DA’s office estimates that more than 250 San Francisco businesses have been hit with lawsuits from Potter Handy, including a handful in the Mission District. In some cases, their complaint says, businesses were sued over falsified violations. Some Chinatown restaurants, for example, were accused of having inaccessible outdoor dining tables when they were only offering takeout during the pandemic.
Kim called his case a “drive-by lawsuit” that accused him of not having enough space around his picnic tables, a too-high counter, and a slightly less-than-level parking space. Kim emigrated from Korea as a child and took over Whiz Burgers stand from his father 10 years ago. He is the fifth owner of the drive-in burger stand founded in 1955.
Like Kim, other business owners Mission Local spoke to had no memory of Garcia being in their stores. But, since these businesses don’t have the means to fight back in court, in most cases they move to settle quickly.
Though many business owners were happy to hear that Potter Handy might face some consequences for exploiting small businesses and the Americans with Disabilities Act, they have already paid up and are just struggling to stay above water.
According to the complaint, California businesses throughout the Bay Area and Southern California have likely paid tens of millions of dollars to settle these lawsuits with Potter Handy over the past four years, with about $5 million alone coming from Garcia’s lawsuits.
Mohammad Ibrahim, who owns the Smoke Time smoke shop on Mission Street near 23rd Street, said he was “barely making it” when he was suddenly hit with a lawsuit in July, 2021, for $18,000 because his counters were too high.
He and his son, Ahmad, said they used to come out from behind the counter if a disabled person entered their shop. Now, they have more accessible low wooden tables set amid the glass cases of pipes and other smoking paraphernalia.
But they still had to pay: Ibrahim ended up settling for $10,000, and was forced to borrow $5,300 to make the payment. He blames the city for not protecting small mom-and-pop shops like his, and making sure they stay in compliance with laws he didn’t even realize existed.
“We’re generating tax for the city. Why are you letting those people come after us?” asked Ibrahim, an immigrant from Palestine who has lived in the Bay Area for 37 years. “For a business like us, they’re supposed to have an inspector … They have to give a chance to those vendors to fix their problems.”
Though business is better now, Kim said he had to shell out his rent money when he was sued last year.
“During that time when I got hit with the lawsuit … I was barely hanging by a thread to keep this business open,” said Kim, who was sued in mid 2021. The law firm asked for $15,000, but he was able to negotiate the payoff down to $10,000.
Eight years ago, Kim was sued for violating the ADA, but said they were “real advocates” who were “nice enough to allow me to do the changes.” He fixed his counters and made more space and thought he was up to code.
“From the time I made the changes to today, I guess new regulations came out,” said Kim, who was served with a new lawsuit from Garcia in 2021. He offered to make the fixes, but was denied; they told Kim to pay up, or they’d take him to court.
Pedro Gil, who has owned Casa Guadalupe Supermarket at Mission and 26th streets for 32 years, said he is still in the middle of his lawsuit. He has lowered his counters and credit card machines, but has yet to settle the case.
Gil hopes to arrange a monthly payment program to pay off his impending debt.
Potter Handy, according to the complaint, took advantage of a loophole to file parallel claims under California’s Unruh Civil Rights Act and the ADA, circumventing legal barriers intended to deter filing of multiple claims, and demanding monetary damages, which are allowed under the Unruh Act but not under the ADA.
Potter Handy has not responded to Mission Local’s requests for comment.
DA spokesperson Rachel Marshall said the goal of the complaint is three-pronged: To get the money back to the economically-challenged businesses that were targeted, level civil penalties against Potter Handy, and to order the firm to stop.