Paguada v. YieldStreet Inc.

Background

Josué Paguada, who is visually impaired and legally blind, alleged that he needed screen-reading software to use the internet. He visited YieldStreet Inc.’s website in October 2020 and February 2021 to learn about YieldStreet’s investment-related services, create an account, and invest. He alleged that technical barriers prevented him from fully using the homepage and frequently asked questions page. The barriers included missing page regions or landmarks, skipped heading levels, inaccessible PDF downloads, and links that screen-reading software could not distinguish.

Paguada brought claims under Title III of the Americans with Disabilities Act, which prohibits disability discrimination in the full and equal enjoyment of services provided by covered public accommodations, and under the New York City Human Rights Law. YieldStreet moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), arguing that Paguada lacked standing, and under Rule 12(b)(6), arguing that he had not stated a legally sufficient claim.

Standing and alleged remediation

The court held that the complaint alleged enough facts to support standing. Paguada alleged that he personally encountered specific barriers on multiple visits, that the barriers continued, and that he intended to revisit the website after the barriers were fixed. The court also considered a declaration stating that the barriers persisted in April 2021.

YieldStreet argued that its voluntary accessibility efforts had made the case moot. Its evidence stated that it had added a UserWay accessibility tool, tested the website against Web Content Accessibility Guidelines 2.1 level AA, and found no errors using another evaluation tool. But Paguada submitted contrary evidence that technical barriers remained. The court ruled that YieldStreet had not shown with sufficient certainty that the alleged problems had ended or could not reasonably recur. The court rejected YieldStreet’s argument that Paguada had to identify specific Web Content Accessibility Guidelines violations because the claim concerned denial of full and equal access to the website, not merely violation of those guidelines. For the same reasons, the court found that Paguada adequately alleged standing under the New York City Human Rights Law.

Failure to state a claim

The court also held that Paguada sufficiently pleaded an ADA claim. At the pleading stage, an ADA website-access claim required allegations that Paguada had a disability, YieldStreet owned or operated a covered public accommodation, and YieldStreet denied him a full and equal opportunity to use its services. The parties did not dispute that the complaint alleged the first two elements. The court found that the alleged barriers were sufficient to support the third element and rejected YieldStreet’s characterization of them as minor problems that did not violate the ADA.

Disposition

Judge Schofield denied YieldStreet’s motion to dismiss. The court ordered the parties to submit a proposed case-management plan and scheduling order by October 27, 2021, lifted the existing stay, and directed the Clerk of Court to close the motion and remove the stay designation.