Smith v. Golden China of Red Wing, Inc.

Background

Scott Smith sued Golden China of Red Wing, Inc. and Vu Thu Lam under Title III of the Americans with Disabilities Act, alleging that he encountered barriers at a Chinese food restaurant operated by the defendants. The court previously granted defendants’ motion for summary judgment after deciding that Smith had not shown that bringing the restaurant’s parking lot into compliance with the ADA was readily achievable.

Defendants moved for attorneys’ fees and non-taxable costs. They relied on four theories: the ADA’s fee-shifting provision, Federal Rule of Civil Procedure 68, Rule 11 sanctions, and 28 U.S.C. § 1927, which permits certain costs when an attorney unreasonably and vexatiously multiplies court proceedings.

ADA Fee-Shifting Provision

The court held that the standard from Christianburg Garment Co. v. EEOC applies to defendants’ requests for fees under the ADA’s fee-shifting provision. Under that standard, a defendant may receive fees only if the plaintiff’s claim was frivolous, unreasonable, or groundless, or if the plaintiff continued litigating after the claim became so.

Although the court expressed concern about some tactics used by Smith, it found that his claim was not frivolous, unreasonable, or groundless and that he had not continued litigating after it became so. The court noted that whether compliance with the ADA’s readily achievable standard is possible is necessarily fact-intensive. It therefore declined to award fees under the ADA.

Rule 68

Defendants had offered to settle for $850, including costs and attorneys’ fees, along with remediation of the alleged ADA violations. Smith’s counsel did not respond. The offer stated that defendants would seek costs and allowable attorneys’ fees if Smith rejected it and later received less than the offer.

The court held that Rule 68 applies when a plaintiff rejects an offer and then obtains a judgment that is not more favorable than the offer. Because Smith did not obtain a judgment, the court held that it could not award defendants’ proposed costs under Rule 68. The court did not decide whether Rule 68 costs include attorneys’ fees.

Rule 11 and 28 U.S.C. § 1927

The court declined to impose Rule 11 sanctions because it could not conclude that Smith’s case was frivolous or that his counsel violated Rule 11(b). It also declined to award fees under 28 U.S.C. § 1927 because it could not conclude that the case was frivolous or that counsel unreasonably and vexatiously multiplied the proceedings.

Disposition

The court denied defendants’ Motion for Attorneys’ Fees and Non-Taxable Costs at Docket No. 128.