SAN FRANCISCO (CBS SF) – District Attorney Chesa Boudin's office is launching an investigation after his office said several Chinatown merchants were hit by potentially fake lawsuits and so-called "demand letters."
According to Boudin's office, the lawsuits appear to come from lawyers who say the businesses did not comply with the Americans with Disabilities Act (ADA).
One of the affected businesses was the Far East Cafe. It barely survived the pandemic, coming an eyelash away from shutting down this winter.
The restaurant is fully re-open again, but two weeks ago, owner Bill Lee got slapped with an ADA lawsuit alleging 17 violations at the Grant Avenue restaurant on issues such as bar height.
"We matched the city codes. Then how come we get a complaint letter?" Lee told KPIX 5.
Lee is not alone. In the past few weeks, 1,156 cases have been filed against Chinese-owned businesses in Chinatown and on Irving Street. Businesses not getting hit with lawsuits are getting letters demanding $75,000 and if that's not paid, there will be a federal suit.
The source of the suits is one person: San Diego resident Orlando Garcia.
"It's a serial filer. He's been filing thousands, thousands of cases in the hope that they are able to get some kind of compensation. That's all they're after," said Harlan Fong of the Chinese Chamber of Commerce.
"They are exploited and extorting small businesses," Boudin said at a briefing Wednesday. "Not to vindicate the critical rights or inclusion of the disabled, but rather to shake down and extort those who are already suffering in the wake of a horrific pandemic and a wave of anti-Asian and anti-Chinese hate across this country."
Boudin said that Chinatown merchants were no more likely to violate the ADA than any other business owner in the city.
Edward Siu of the Chinatown Merchants United Association also spoke at Wednesday's briefing and said, "The lawsuits target hardworking, monolingual, mom-and-pop stores located in the country's oldest and largest Chinatown. Many are still struggling through this pandemic."
The district attorney went on to say, "We are concerned that potentially frivolous lawsuits not only fail to promote accessibility or disability rights, but instead force businesses to either shut down or provide payouts to lawyers who have no interest in promoting disability rights."
"We're going to take all the information we gather and conduct a potential criminal investigation into these abuses of legal process," Boudin said.
Garcia's attorney Dennis Price sent KPIX 5 a statement disputing the some of the allegations:
Mr. Garcia has not filed even a fraction of the suits claimed this year in the greater Bay area combined, let alone in the past few weeks, and let alone involving only Chinatown. It is also incorrect that he's targeted Chinatown specifically or that anything remotely close to those totals are correct with respect to Chinese-owned businesses.
Further, Mr. Garcia does not send monetary demand letters prior to filing suit and it is incorrect that his suit demand such exorbitant amounts of money. Each of Garcia's claims involve a confirmed violation of federal civil rights laws and demand compliance with the law along with the penalties prescribed by law. A typical Unruh/ADA case, which Mr. Garcia's cases are, involve a requirement to come into compliance with the ADA and statutory penalties of a maximum of $4,000 along with attorney's fees and court costs provided by law.
We agree with DA Boudin that Chinese-owned business are no more likely to violate the law than any other. However, all businesses must comply with the ADA. It is false that Mr. Garcia is targeting these businesses specifically and a simple review of PACER demonstrates that his claims are not focused on Chinatown or any particular area.
Legally, there may not be much Boudin can do. A loophole in state and federal disability law allows for these serial lawsuits and potential legislative fixes have stalled out every time.
Boudin urged business owners who believe they have been victimized by the lawsuits to come forward and contact the DA's office Consumer Protection and Fraud Hotline at 628-652-4311.
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