Opinion
CV 21-1061-RSWL-Ex
09-28-2021
ANTONIO FERNANDEZ, Plaintiff, v. ORANGE WALKER, LLC, a California Limited Liability Company; and JASON YONG JAE KWOK, Defendants.
ORDER RE: PLAINTIFF'S APPLICATION FOR DEFAULT JUDGMENT [19]
HONORABLE RONALD S.W. LEW, Senior U.S. District Judge.
Currently before the Court is Plaintiff Antonio Fernandez's (“Plaintiff”) Application for Default Judgment (the “Application”) [19]. Having reviewed all papers submitted pertaining to this Application, the Court NOW FINDS AND RULES AS FOLLOWS: the Court DENIES the Application without prejudice.
I. BACKGROUND
A. Factual Background
Plaintiff is paralyzed from the waist down and uses a wheelchair for mobility. Compl. ¶ 1, ECF No. 1. Orange Walker, LLC (“Defendant Orange Walker”) owned and owns the real property located at 14408 Pioneer Blvd., Norwalk, California 90650 (the “Property”). Id. ¶¶ 2-3. Jason Yong Jae Kwak (“Defendant Yong Jae Kwok”) owned and owns Mike's Liquor Jr. Market (the “Business”) located on the Property. Id. ¶¶ 4-5.
In January 2021, Plaintiff visited the Business. Id. ¶ 10. Upon arrival, Plaintiff found that the Property failed to provide wheelchair accessible paths of travel in compliance with ADA standards. Id. ¶ 12. Specifically, “some of the paths of travel inside the [Business] had widths that were well below 36 inches.” Id. ¶ 14. Plaintiff personally encountered these barriers. Id. ¶ 17. Plaintiff intends to return to the Business to test its compliance with disability access laws, but he is currently deterred from doing so because of the existing barriers. Id. ¶ 22. Plaintiff asserts that these barriers are “easily removed without much difficulty or expense.” Id. ¶ 21.
B. Procedural Background
Plaintiff filed his Complaint [1] on February 5, 2021, alleging violations of the ADA and Unruh Act. Plaintiff served Defendant Yong Jae Kwak [11] on February 12, 2021, and Defendant Orange Walker [15] on March 17, 2021.
As of yet, Defendants have not pleaded, answered, or otherwise appeared in this Action. The Clerk of Court entered default as to Defendant Yong Jae Kwak [14] on March 12, 2021, and as to Defendant Orange Walker [17] on May 4, 2021. On August 2, 2021, Plaintiff filed the present Application [19]. Plaintiff seeks an order enjoining Defendants to provide premises that comply with the ADA and Unruh Act. Compl. 7:4-5. Plaintiff also requests awards of $4,000 in statutory damages against each Defendant and $3,116 in attorneys' fees and costs, for a total award of $11,116. Id. at 7:8-11; Decl. of Russell Handy in Supp. of Pl.'s App., Invoice, ECF No. 19-3; Proposed Order 2:6, ECF No. 19-12.
II. DISCUSSION
A. Legal Standard
Federal Rule of Civil Procedure (“Rule”) 55(b) authorizes a district court to grant default judgment. Pursuant to Local Rule 55-1, the party moving for default judgment must submit a declaration establishing: (1) when and against which party default was entered; (2) on which pleading default was entered; (3) whether the defaulting party is a minor, incompetent person, or active service member; and (4) proper service. Upon default, all factual allegations in the complaint, except those relating to damages, are assumed to be true. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)).
In exercising its discretion to grant default judgment, the court must consider the following factors: (1) possibility of prejudice to the plaintiff, (2) merits of the substantive claim, (3) sufficiency of the complaint, (4) sum of money at stake in the action, (5) possibility of disputes regarding material facts, (6) whether excusable neglect caused the default, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 616 (9th Cir. 2016) (quoting Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986)). Additionally, if the defaulting party failed to plead or otherwise defend, the court must determine that it has subject matter and personal jurisdiction. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). When default judgment is granted, the relief awarded “must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c).
B. Discussion
1. Jurisdiction
a. ADA Claim
The Court has subject matter jurisdiction over violations of the ADA pursuant to 28 U.S.C. §§ 1331 and 1343. See Civil Rights Educ. & Enf't Ctr. v. Hosp. Props. Tr., 867 F.3d 1093, 1098 (9th Cir. 2017). Moreover, the Court has personal jurisdiction over Defendants because they have “certain minimum contacts” with California such that “the suit does not offend ‘traditional notions of fair play and substantial justice.'” Calder v. Jones, 465 U.S. 783, 788 (1984) (citation omitted). Specifically, Defendants owned and own the Property and the Business located at 14408 Pioneer Blvd., Norwalk, California 90650. Compl. ¶¶ 2-5.
b. Unruh Act Claim
The Court has supplemental jurisdiction over “claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C § 1367(a). Even if supplemental jurisdiction exists, however, district courts have discretion to decline supplemental jurisdiction “in exceptional circumstances” or where “there are other compelling reasons for declining jurisdiction.” 28 U.S.C. § 1367(c)(4). The Supreme Court has described 28 U.S.C. § 1367(c) as a codification of the principles of “economy, convenience, fairness, and comity” that underscore the Supreme Court's earlier jurisprudence concerning pendent jurisdiction. City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 172-73 (1997) (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 357 (1988).
The Ninth Circuit does not require an “explanation for a district court's reasons [for declining supplemental jurisdiction] when the district court acts under” 28 U.S.C. §§ 1367(c)(1)-(3). San Pedro Hotel Co. v. City of Los Angeles, 159 F.3d 470, 478 (9th Cir. 1998). It does, however, require a district court to “articulate why the circumstances of the case are exceptional in addition to inquiring whether the balance of the Gibbs values provide compelling reasons for declining jurisdiction in such circumstances.” Exec. Software N. Am. Inc. v. U.S. Dist. Court for the Cent. Dist. of Cal., 24 F.3d 1545, 1558 (9th Cir. 1994). According to the Ninth Circuit, this “inquiry is not particularly burdensome.” Id.
California's Unruh Civil Rights Act provides: “[a]ll persons within the jurisdiction of [California] are free and equal, and no matter what their . . . disability . . . are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.” Cal. Civ. Code § 51. Pursuant to Civil Code § 51(f), a violation of the ADA is a per se violation of the Unruh Act. But unlike the ADA, the Unruh Act provides for recovery of monetary damages. A plaintiff may recover actual damages for each offense “up to a maximum of three times the amount of actual damage but in no case less than four thousand dollars ($4,000).” Id. § 52(a). “The litigant need not prove she suffered actual damages to recover the independent statutory damages of $4,000.” Molski v. M.J. Cable, Inc., 481 F.3d 724, 731 (9th Cir. 2007) (citing Botosan v. Paul McNally Realty, 216 F.3d 827, 835 (9th Cir. 2000)).
“In 2012, in an attempt to deter baseless claims and vexatious litigation, California adopted heightened pleading requirements for disability discrimination lawsuits under the Unruh Act.” Velez v. Il Fornanio (Am.) Corp., No. 3:18-CV-1840-CAB-MDD, 2018 WL 6446169, at *6 (S.D. Cal. Dec. 10, 2018). These heightened pleading requirements apply to actions alleging a “construction-related accessibility claim, ” which California law defines as “any civil claim in a civil action with respect to a place of public accommodation, including but not limited to, a claim brought under Section 51, 54, 54.1, or 55, based wholly or in part on an alleged violation of any construction-related accessibility standard.” Cal. Civ. Code § 55.52(a)(1). California's heightened pleading standard requires a plaintiff to include specific facts concerning the plaintiff's claim, including the specific barriers encountered and how the plaintiff was deterred on each occasion. See Cal. Civ. Code § 425.50(a). California law also requires that complaints for construction-related accessibility claims be verified; if they are not, they are subject to a motion to strike. See Id. § 425.50(b)(1).
When California continued to experience large numbers of these actions, California imposed additional limitations on “high-frequency litigants.” These additional restrictions became effective on October 15, 2015. In support of its imposition of additional requirements on high-frequency litigants, the California Legislature found and declared:
A high-frequency litigant is defined in part as a plaintiff who has filed ten or more complaints alleging a construction-related accessibility violation within the twelvemonth period immediately preceding the filing of the current complaint alleging a construction-related accessibility violation. Cal. Civ. Proc. Code § 425.55(b)(1).
According to information from the California Commission on Disability Access, more than one-half, or 54 percent, of all construction-related accessibility complaints filed between 2012 and 2014 were filed by two law firms. Forty-six percent of all complaints were filed by a total of 14 parties. Therefore, a very small number of plaintiffs have filed a disproportionately large number of the construction-related accessibility claims in the state, from 70 to 300 lawsuits each year. Moreover, these lawsuits are frequently filed against small businesses on the basis of boilerplate complaints, apparently seeking quick cash settlements rather than correction of the accessibility violation. This practice unfairly taints the reputation of other innocent disabled consumers who are merely trying to go about their daily lives accessing public accommodations as they are entitled to have full and equal access under the state's Unruh Civil Rights Act (Section 51 of the Civil Code) and the federal Americans with Disability Act of 1990 (Public Law 101-336).Id. § 425.55(a)(2). In response to the “special and unique circumstances” surrounding disability access ligation, id. § 425.55(3), California imposed a “high-frequency litigant fee, ” requiring high-frequency litigants to pay a $1,000 filing fee in addition to the normal fee at the time of filing a complaint. Cal. Gov't Code § 70616.5.
In enacting restrictions and additional fees for the filing of construction-related accessibility claims, California sought to limit the burden these types of cases put on its businesses. But, in filing these Actions in federal courts, plaintiffs have managed to avail themselves of the state-law-provided statutory damages all while circumventing California's limitations on obtaining such awards. This situation, as well as the increased burden on federal courts due to the increasing number of these cases, presents the type of “exceptional circumstances” and “compelling reasons” that justify a court's discretion to decline to exercise supplemental jurisdiction over any Unruh Act or other state law claims under 28 U.S.C. § 1367(c)(4).
Further, declining to exercise supplemental jurisdiction over Plaintiff's Unruh Act claim under these circumstances furthers the values of judicial economy, fairness, convenience, and comity:
As a high-frequency litigant, the Court finds it would be improper to allow Plaintiff to use federal court as an end-around to California's pleading requirements. Therefore, as a matter of comity, and in deference to California's substantial interest in discouraging unverified disability discrimination claims, the Court
declines supplemental jurisdiction over Plaintiff's Unruh Act claim.Schutza v. Cuddeback, 262 F.Supp.3d 1025, 1031 (S.D. Cal. 2017); see also Gibbs, 383 U.S. at 726.
California's elected representatives, not this Court, have enacted laws restricting construction-related accessibility claims, and in doing so, have directed that these claims be treated differently than other matters. In recognizing that a small number of lawyers and plaintiffs who have filed thousands of these cases have evaded California's limitations on these claims, the Court has not, as some plaintiffs' counsel have alleged, acted on a “knee-jerk dismissal preference” in declining to exercise supplemental jurisdiction over these claims.
Therefore, the Court concludes that “exceptional circumstances” and “compelling reasons” exist to support the Court's decision to DECLINE to exercise supplemental jurisdiction over Plaintiff's Unruh Act claim. In doing so, the Court has not deprived Plaintiff of any remedies, as the ADA claim remains before this Court, and Plaintiff may, if he so chooses, pursue his Unruh Act claim in state court. Additionally, any resultant inefficiencies “are slight in comparison to California's weighty interest in ensuring its laws are not circumvented, and in enforcing the detailed statutory regime it has set up for construction-related accessibility claims.” Davidson v. Cole, No. SACV-20-01733-CJC-(ADSx), 2020 WL 6588386, at *4 (C.D. Cal. Sept. 28, 2020).
Plaintiff encountered the barrier in January 2021. As such, the statute of limitations for Plaintiff's Unruh Act claim has not lapsed and Plaintiff is able to bring this claim in state court where it can be properly adjudicated. See Harris v. County of San Diego, No. CV 18-924-BTM-AHG, 2019 WL 6683367, at *4 (S.D. Cal. Dec. 5, 2019) (finding that Unruh Act claims “are subject to a two-year statute of limitations”) (citing Cal. Code Civ. Proc. § 335.1).
2. Service of Process
The Court next considers whether the procedural requirements for granting default judgment are met in this case.
Defendants were properly served under Rule 4. See Direct Mail Specialists, Inc. v. Eclat Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir. 1988) (“A federal court does not have jurisdiction over a defendant unless the defendant has been served properly under Fed.R.Civ.P. 4.”) (citation omitted). Service on an individual may be made in accordance with the rules of the state where service will be made. Fed.R.Civ.P. 4(e)(1). In California, the summons and complaint may be served by personal delivery. Cal. Civ. Proc. Code §§ 415.10. Plaintiff served Defendant Yong Jae Kwak by personal service on February 12, 2021. See Proof of Service, ECF No. 11. Thus, Plaintiff properly served Defendant Yong Jae Kwak and provided the necessary proof of service.
Service on a corporation may similarly be made in accordance with the rules of the state where service will be made. Fed.R.Civ.P. 4(h)(1)(A). California permits a corporation to be served by substituted service if personal service cannot be accomplished with reasonable diligence. Cal. Civ. Proc. Code § 415.20(b). A copy of the summons and complaint may be left at the home of the person to be served in the presence of a competent member of the household, and copies of the documents must thereafter be mailed to the person to be served. Id. For corporations, the person to be served includes a person designated as agent for service of process. Id. § 416.10. Plaintiff served a designated agent of Defendant Orange Walker on March 17, 2021, and thereafter mailed the documents to the person to be served. See Proof of Service, ECF No. 15. Thus, Plaintiff properly served Defendant Orange Walker and provided the necessary proof of service.
3. Local Rule 55-1
Plaintiff has satisfied the procedural requirements for default judgment under Local Rule 55-1. Plaintiff's counsel submitted a declaration in support of the instant Application, which stated that default was entered against Defendant Orange Walker and Defendant Yong Jae Kwak on May 4, 2021, and March 12, 2021, respectively, for failure to respond to the Complaint. Decl. of Faythe Gutierrez in Supp. of Pl.'s App. ¶ 5, ECF No. 19-11. The declaration further states that neither defendant is an infant, incompetent person, or exempted under the Soldiers' and Sailors' Civil Relief Act of 1940. Id. ¶ 2. It also verifies that notice of the Application was served on both Defendants on August 2, 2021. Id. ¶ 6.
4. Eitel Factors
Here, Plaintiff's Application fails because of the second and third Eitel factors, which require the Court to consider the sufficiency of the Complaint and the merits of the claim. Eitel, 782 F.2d at 1471 (citation omitted). At this stage, the Court concludes that the Complaint does not support granting default judgment.
To prevail under the ADA, a plaintiff must establish that “(1) she is disabled within the meaning of the ADA; (2) the defendant . . . owns, leases, or operates a place of public accommodation; and (3) the plaintiff was denied public accommodations by the defendant because of her disability.” Molski v. M.J. Cable, Inc., 481 F.3d 724, 730 (9th Cir. 2007) (citing 42 U.S.C. § 2182(a)-(b)).
According to the ADA, a disability is “a physical or mental impairment that substantially limits one or more major life activities, ” including walking. 42 U.S.C. § 12102. Plaintiff is paralyzed from the waist down and requires a wheelchair for mobility. Compl. ¶ 1; Pl.'s Decl. ¶ 2, ECF No. 19-4. Therefore, Plaintiff is disabled. Further, Plaintiff alleges that the Business is a place of public accommodation. Compl. ¶ 11. Plaintiff has therefore established the first two elements of his ADA claim for purposes of discrimination.
Plaintiff must also establish that Defendants discriminated against him because of his disability. Under the ADA, discrimination includes the “failure to remove architectural barriers . . . where such removal is readily achievable . . . .” 42 U.S.C. § 12182(b)(2)(A)(iv). The Americans with Disabilities Act Accessibility Guidelines (“ADAAG”) establish the technical standards for determining whether a barrier exists. Fortyune v. Am. Multi-Cinema, Inc., 364 F.3d 1075, 1080-81 (9th Cir. 2004).
The ADA requires that the clear width of walking surfaces be 36 inches minimum. 36 C.F.R. § Pt. 1191, App. D § 403.5.1. Here, Plaintiff alleges that some of the paths of travel inside the Business have widths that are well below 36 inches. See Compl. ¶¶ 13-14. Walking paths that are not wide enough for wheelchairs present architectural barriers that are subject to the ADA. Chapman v. Pier 1 Imps. (U.S.), Inc., 779 F.3d 1001, 1005 (9th Cir. 2015).
The next issue is whether removal of these barriers is readily achievable. The Ninth Circuit has recently adopted a burden-shifting scheme, which places the initial burden on the plaintiff to “plausibly show how the cost of removing the architectural barrier at issue does not exceed the benefits under the circumstances.” Lopez v. Catalina Channel Express, Inc., 974 F.3d 1030, 1038 (9th Cir. 2020). Once “the plaintiff makes a plausible showing that the requested accommodation is readily achievable, the burden shifts to the defendant to counter the plaintiff's initial showing.” Id. at 1038-39. “Although Lopez was decided at the summary judgment stage, courts in this circuit have applied the same framework where plaintiffs seek default judgment.” Burke v. G-B-F Stanton, No. 8:20-cv-01044-JLS-KES, 2021 WL 3207959, at *4 (C.D. Cal March 3, 2021).
Here, Plaintiff alleges that the barriers at issue “are easily removed without much difficulty or expense.” Compl. ¶ 21. Moreover, Plaintiff claims that “there are numerous alternative accommodations that could be made to provide a greater level of access if complete removal were not achievable.” Id. These conclusory statements are insufficient to meet Plaintiff's burden under Lopez. Neither the Complaint nor the Application contain cost estimates for removal or any explanation as to how such costs would not exceed the benefits of removing the barrier. Compare Bouyer v. Ban Pan Corp., No. CV 20-11540-MWF (PDx), 2021 WL 2791623 (C.D. Cal. April 5, 2021) (denying motion for default judgment because plaintiff failed to allege how the costs of repairing curb ramp and aisle surface next to accessible parking space would not exceed the benefit of such repairs), with Hull v. RA2 L.A.-Brea LP, No. 2:21-cv-00910-MCS-MAA, 2021 WL 3772401 (C.D. Cal. August 25, 2021) (finding that plaintiff met his burden by submitting a Site Accessibility Evaluation providing recommendations for removing barriers and a declaration containing cost estimates for doing so). While plaintiffs need not provide “precise cost estimates” or “a specific design” for the proposed accommodation, Lopez, 974 F.3d at 1038, Plaintiff has supplied the Court with no information regarding the nature of the non-compliant paths of travel or the changes that would be necessary to widen those paths.
Plaintiff provided photographs of the Business as an exhibit to his Application, but they are unhelpful in determining which pathways are too narrow and how they can be widened to comply with the ADA. See Photographs, ECF No. 19-6. Plaintiff additionally asserts that the barriers at issue are “identified by the Department of Justice as presumably readily achievable to remove.” Compl. ¶ 21. Indeed, the federal regulations list examples of barriers that are presumably readily achievable to remove, such as “widening doors” and “rearranging tables, chairs, vending machines, display racks, and other furniture.” See generally 28 C.F.R. § 36.304(b). But Plaintiff fails to explain how taking any action enumerated in that regulation would bring the Business into compliance. Without more information, Plaintiff fails to meet his initial burden under Lopez.
Plaintiff has failed to meet his burden to plausibly show how the cost of removing the barriers at issue does not exceed the benefit. Accordingly, the Court DENIES without prejudice Plaintiff's Application. Plaintiff must file a renewed application for default judgment no later than October 13, 2021, which provides evidence that the cost of removing the barriers at issue does not exceed the benefits under the circumstances. Plaintiff does not have to file an amended complaint. Because this factor alone makes granting default judgment inappropriate, the Court need not address the other Eitel factors.
III. CONCLUSION
The Court DECLINES to exercise supplemental jurisdiction over Plaintiff's Unruh Act claim and thereby DISMISSES the claim without prejudice. The Court DENIES Plaintiff's Application as to the ADA claim without prejudice, and Plaintiff shall file a renewed motion that explains why the barriers at issue are readily achievable to be removed.
Plaintiff is advised that the failure to file a renewed application for default judgment by the deadline set forth above, or filing one that otherwise fails to address the requirements set forth in this Order, shall result in the renewed application being denied and/or the action against defendants being dismissed for failure to prosecute and/or to comply with a court order. See Fed.R.Civ.P. 41(b); Link v. Wabash R.R. Co., 370 U.S. 626, 629-30 (1962).
IT IS SO ORDERED.