Readers in a couple of states, one Southern and the other Midwestern, sent me emails about the latest shark-jumping by class action plaintiffs' lawyers out to squeeze blood out of banks via a federal law they last used to beat up banks over non-compliant ATMs: the Americans With Disabilities Act (ADA). Four years ago, I discussed the "drive-by" boinking of banks over their alleged failure to make sure that their ATMs were accessible to the disabled. Although the link to the article that is referenced in that previous blog post is not longer available, the wise words of Colorado Lawyer Jennifer Gokenbach, discussed later in this post, apply to the current scheme: threatening to sue (and in some cases, actually suing) banks because their web sites don't comply with the ADA.
I'm not an ADA expert, so I think it's best to listen to lawyers who purport to possess that expertise. Among those is Martin Orliock, a San Francisco lawyer with Jeffer Mangels Butler & Mitchell. The California Bankers Association last month issued an Alert about letters sent by a Pennsylvania law firm that has been sending letters to community and regional banks in various states, which letters allege that the bank's website does not comply with the ADA and demand certain actions be taken by the bank or all hell will rain down on its sorry head. The CBA alert contains links to such a letter (redacted to protect the innocent and the allegedly guilty), and to an article written by Mr. Orlick, the Chairman of his law firm's ADA Compliance and Defense Group.
I have also received emails from bank officers in Kentucky and Indiana, and have spoken with lawyers in Texas and Colorado, who tell me that they (or their clients) have received similar letters. Although I did not find a similar statement in the letter linked by the CBA, an email from the Kentucky Bankers Association states that in one such letter to a Kentucky bank, the Pennsylvania law demands that the bank agree to retain that law firm to represent it in the event of future ADA-related complaints of a similar nature. I have not researched the ethical issues related to that particular settlement provision so I'll reserve comment on it for now, although I assume that the plaintiff's law firm has done so and found it to be appropriate. One banker told me that it would be like hiring the fox to guard the hen house. I would envision a wolf rather than a fox, but that's my defense-bias and class-action-phobia showing through.
There is no question that this round of litigation, and pre-litigation arm-twisting, is yet another example of the scourge (or benefit, depending on which way you lean) of bottom feeding under the guise of doing the Lord's work. In this round, the banks have a legitimate gripe that what private law firms are doing is carrying water for a Department of Justice that has, since 2008, been pushing the envelope in social re-engineering by suing banks on questionable theories. Regarding the ADA and websites, the basis cited by the DOJ is that businesses do not comply with a set of industry-issued guidelines (WCAG 2.0) that have not been formally adopted by the DOJ or any any other formal regulatory action by a government agency. In fact, although proposed guidelines for website compliance were first proposed by the DOJ in 2010, they still have not been finalized and currently are not expected to be finalized until 2018. This is not only regulation-by-enforcement (a favorite tactic of the CFPB), but also regulation-by-private-lawsuit.
I think that Mr. Orlick's article sets forth the problem in reasonably brief, but informative, fashion, and I'm not going to reiterate its content. Read it and either weep or laugh, but read it do what he advises, and do it whether or not your institution has yet received one of these letters. I especially urge banks to pay attention to the following provision from his concluding paragraph:
Banks and other businesses should consider hiring a web accessibility consultant through legal counsel to maintain privileges and confidentiality protections. Once a complaint letter is received from a potential Plaintiff, measures should be taken to protect electronically stored information (ESI) in anticipation of litigation.
My previous blog post also contains some sound advice from Ms. Gokenback that is applicable to this round of ADA lawsuits, which is to check with an insurance professional to see if you have any potential existing coverage for existing claims, or, if not, what might be the availability of obtaining such coverage for future claims. Obviously, the best time to check to see if your backside is covered is prior to it being exposed to the four winds.
To those banks that are ahead of the curve on this issue and have already had an ADA-compliance analysis performed on their weebsites, good for you. From what I've seen thus far, you are a rare breed. Most folks might have thought that since regulations are at least two years off, it might be safe to wait until the bank had legally enforceable standards to go by. Silly them!
If anyone thinks this is a trend that will pass, I wish I could agree. With trial lawyers traditionally being a bedrock of Democratic support (they are giving twice as much to Democrats as to Republicans in this election cycle), I think that these types of lawsuits by the DOJ, CFPB, other federal agencies, and the class action plaintiffs' bar, are only going to increase, especially under the regime of Clinton II.