Whitaker v. Peet's Coffee, Inc.

Background

Brian Whitaker, who uses a wheelchair, alleged that he visited a Peet’s Coffee location in San Francisco in September 2021 and found that its outdoor dining tables were not wheelchair accessible. He sued Peet’s under the Americans with Disabilities Act and California’s Unruh Act.

Peet’s challenged Whitaker’s standing to seek an order requiring future accessibility. After jurisdictional discovery and an evidentiary hearing, the court concluded that the ADA claim was moot because Peet’s had addressed the alleged accessibility problem. The court declined to exercise supplemental jurisdiction over the Unruh Act claim and granted Peet’s renewed motion to dismiss. Peet’s then sought attorney’s fees under the ADA and sanctions against Whitaker and the Potter Handy law firm.

Attorney’s Fees

The court denied Peet’s request for attorney’s fees under the ADA. Although the ADA can permit fees for prevailing defendants in some circumstances, the court held that Peet’s did not qualify as a prevailing party because the case became moot after Peet’s remedied the alleged violation.

Sanctions

The court considered sanctions under 18 U.S.C. § 1927, which can require an attorney to pay costs and fees caused by unreasonably and vexatiously multiplying court proceedings. The court also considered its inherent power to sanction bad-faith conduct. It found, by clear and convincing evidence, that Whitaker and Potter Handy acted together in bad faith after Peet’s challenged Whitaker’s intent to return to the location.

The court found that Whitaker and Potter Handy misrepresented Whitaker’s intent to return after the alleged barriers were fixed. It also found that they gave shifting explanations for Whitaker’s San Francisco trip, failed to timely provide requested documents, submitted deficient discovery responses, argued that the court no longer had jurisdiction even though the Unruh Act claim remained pending, and filed a notice that the ADA claim was moot shortly before the evidentiary hearing. According to the court, this conduct forced Peet’s and the court to spend resources on proceedings that should not have been necessary.

The court emphasized that it was not imposing sanctions because Whitaker acted as an ADA tester or because Potter Handy represented one. The court stated that visiting businesses to evaluate compliance with disability laws and suing over violations are not, by themselves, improper. The sanctions were based on the court’s findings about false statements, bad faith, and discovery misconduct in this case.

Disposition

The court granted in part and denied in part Peet’s motion for attorney’s fees and sanctions. It denied ADA attorney’s fees and awarded $35,000 in sanctions. Whitaker and Potter Handy were made jointly and severally liable, meaning each is responsible for the full award, subject to any allocation between them. The sanctions against Potter Handy rested on both § 1927 and the court’s inherent powers; the sanctions against Whitaker rested solely on the court’s inherent powers. Payment was due within 21 days of the order.