In Austin, the ADA Lawsuit Mill Grinds On

 

The Americans With Disabilities Act may be the most widely-abused law in our history, spawning frivolous litigation against employers, retail businesses, and—most recently—spurious claims against websites that allegedly aren’t sufficiently compliant with the ADA. Nationwide, a cottage industry has developed among a bottom-feeding element of the plaintiffs’ bar that specializes in bringing a high volume of cookie-cutter lawsuits against small businesses for technical violations of the ADA, and extorting quick settlements of several thousand dollars each.

This abusive litigation has provoked the ire of judges, bar associations, and the business community, in the process earning the moniker “drive-by lawsuits.” The extent of the problem is well-documented. Just Google “ADA litigation abuse” and you will find hundreds of appalling news reports from all across the country.

The worst abuses are concentrated in a few states, especially California, Florida, and New York. But even Texas, whose legal system benefits from a much-heralded regime of civil justice reforms, is not immune to the plague of ADA lawsuits. All it takes is one enterprising lawyer, a “disabled” client to serve as plaintiff, and an appetite for shaking down businesses with serial lawsuits. In Austin, Texas’ capital city, that lawyer is Omar Rosales, a one-man litigation explosion who began his ADA blitzkrieg in 2015. Rosales, a solo practitioner who graduated from the University of Texas School of Law in 2005, has generated infamy for bringing hundreds of ADA lawsuits throughout Travis County, including 385 within a one-year period. Rosales’ record of litigiousness is so remarkable that a local TV station, KXAN, has devoted a series to his ignominious exploits. (For example, here, here, here, and here.)

Here are some of the highlights: In December 2016, a federal judge slapped Rosales with $176,000 in sanctions (or monetary penalties) for conduct that the court termed “shocking,” including making false and abusive statements, filing frivolous motions, and submitting fabricated evidence. The court stated that “Normally, people resort to the court system to resolve grievances and discover the truth. In these… cases, however, Rosales has used this system to create strife and perpetuate lies.” Later, Rosales was suspended for three years from practicing law in the federal courts for the Western District of Texas. In an 86-page order, the federal judge found that Rosales had “unquestionably acted in bad faith” and undermined “the integrity of the judicial system.”

In 2017, the State Bar of Texas sued Rosales for professional misconduct after he sent letters to hundreds of health care providers threatening to sue them under the ADA for allegedly noncompliant websites if they did not pay him a $2,000 settlement. The suit was filed by the Bar’s Commission for Lawyer Discipline in response to eight separate grievances arising from the abusive “demand” letters, which falsely claimed violations of non-existent regulations. Even though the case was filed in Travis County District Court (in Austin), the Texas Supreme Court assigned a judge from Fort Worth, R.H. Wallace, to preside.

In an astounding ruling, on February 20, Judge Wallace dismissed the lawsuit with prejudice (meaning that it cannot be re-filed) pursuant to the Texas Citizens’ Participation Act (commonly referred to as an anti-SLAPP statute, for Strategic Lawsuit Against Public Participation). The court apparently accepted Rosales’ arguments that he was entitled to send the letters because he is “disabled” himself (due to PTSD from his military service), and therefore the letters constituted the “exercise of free speech.” Amazingly, Judge Wallace ordered the State Bar to pay Rosales $65,000 in attorneys’ fees!

This is a baffling and deeply-disturbing decision. Over a decade ago, even in California the State Bar disciplined ADA lawsuit mills for their litigation abuses.  Can it possibly be the case that California is less tolerant of frivolous ADA lawsuits and bad faith tactics than Texas is?  Omar Rosales is the poster child for ambulance-chasing bottom-feeders—exploiting the cost of litigation to extort undeserved settlements. He is an embarrassment to the State Bar of Texas and a noxious element in the legal community. Judge Wallace’s ruling is an abomination that should be appealed and reversed.

Addendum: The federal court sanctions were upheld by the Fifth Circuit.

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