Los Angeles News

Some disability lawsuits cost L.A. taxpayers

Wednesday, September 08, 2010

Serial plaintiffs are targeting Southern California businesses, suing for alleged violations of the Americans with Disabilities Act (ADA). Your tax dollars are paying for hundreds of these lawsuits.

No one disputes that the ADA is an important and valuable law. But some disabled plaintiffs have turned this type of litigation into a full-time, high-paying job.

Kathie Reece-McNeil owns the historic Aztec Hotel in Monrovia.

"Marilyn Monroe stayed here, Clark Gable," said Reece-McNeil.

When the hotel was slapped with a fraudulent ADA lawsuit, Reece-McNeil fought back.

She could have settled the suit for $18,000. Instead she hired an attorney and won the case. But she paid a steep price in attorney fees.

"Ultimately it ended up being in excess of $100,000 dollars," said Reece-McNeil.

"This is more profitable than narcotics, literally," said attorney David Warren Peters.

Peters is with Lawyers Against Lawsuit Abuse.

"You can make $12,000 a day just eating three meals out," said Peters.

That's because California law allows a plaintiff to sue for $4,000 per violation.

Serial plaintiff Thomas Mundy takes full advantage. He sued a West L.A. strip mall, claiming that he would have visited it 30 times.

So what are 30 visits worth? At $4,000 a pop, Mundy sued for $120,000.

Mehrban is Thomas Mundy's attorney. Mehrban said he's filed thousands of ADA lawsuits, 523 on behalf of Mundy.

Mundy would not talk to Eyewitness News, but he has testified under oath he needs a spreadsheet to keep track of his lawsuits.

"I'm not here to judge, I'm not here to pass judgment on what's right, what's wrong," said Mehrban. "I'm merely an attorney who furthers the interests of his clients."

There's big money to be made.

Mehrban's website offers possible scenarios: "You're in a restaurant and want to use the restroom mirror to make yourself presentable. The mirror is mounted too high on the wall for you to use. You may be entitled to $4,000."

And your tax dollars are funding this litigation. Of 523 ADA lawsuits, Mehrban and Mundy asked for and received fee waivers for 210 of them. Those filing fees run in the hundreds of dollars per case.

"Fee waivers are based on need and given to people who are below a certain financial level, and Mr. Mundy, based on his own testimony, doesn't qualify," said Glendale attorney Gail Cooper-Folb.

Cooper-Folb tracks lawsuits filed by Mundy and Mehrban. She's pursuing legal action against them to recover unpaid filing fees for the courts.

"Calculating the filing fees that weren't paid, Mr. Mundy didn't pay approximately $75,000 to the court for those 210 lawsuits," said Cooper-Folb.

"Whether these individuals are entitled to fee waivers or not, that's the court's decision," said Mehrban.

"That's typically rubber-stamped by the court, unfortunately," said attorney Ryan McNamara. "There's little, if any, investigation into their actual financial ability to make that payment to the court."

Of course, not all fee waivers are questionable or fraudulent.

But in this time of court furloughs and hundreds of layoffs, how many fee waivers are being granted overall?

At the downtown Los Angeles courthouse alone, Eyewitness News learned that 12,761 fee waivers were granted in the first seven months of this year.

What's more, instead of paying for a process server, Mehrban and his clients with fee waivers also get L.A. County Sheriff's Department employees to serve their lawsuits for free. That's at taxpayer expense.

"I've been told that sheriff's deputies complain that they're spending all of their time serving Mr. Mehrban's lawsuits," said David Warren Peters with Lawyers Against Lawsuit Abuse.

It all came as a shock to William Humfreville, part-owner of the California Chicken Café.

Thomas Mundy sued California Chicken Cafe over a bathroom mirror that was two inches too high.

"So we effectively were sued and paid a $5,000 settlement over a two-inch discrepancy," said Humfreville.

The cafe settled and began a good-faith effort to bring all seven of its stores into compliance.

But then, Mundy and Mehrban brought three more similar lawsuits against the chain of cafes.

"But we are willing to make a stand," said Humfreville. "We will not succumb to his threats of financial gain."

Mundy filed 26 more lawsuits in July.

Meanwhile, attorney Gail Cooper-Folb pursued and won sanctions in the amount of $29,000 against Morse Mehrban for refusing to drop an ADA case the judge determined was frivolous. Mehrban is appealing.

David Ono has been investigating lawsuits based on alleged violations of the Americans with Disabilities Act, meant to protect the disabled. Critics say the lawsuits filed by professional plaintiffs are more about greed than helping the disabled.

For the full story: Man sues hundreds over disability violations

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