Bank Websites Attract ADA Claims: A Survey of the Issues

Americans With Disabilities Act
Thomas B. Alleman

By Thomas B. Alleman

Thomas B. Alleman is a member in Dykema Cox Smith's Dallas office where his practice focuses on complex litigation, risk management and insurance issues for banks and other businesses.

Banks and other businesses of all sizes have recently faced a growing wave of claims and lawsuits alleging that their websites do not comply with Title III of the Americans with Disabilities Act (ADA). There have been suits in many different jurisdictions against businesses ranging from motel chains, cosmetic and skin care products, and retail chains, to chocolate companies. Claims against banks of all sizes have increased in recent months filed by the same cluster of firms that previously alleged ADA violations because drive-up ATMs were allegedly not accessible to the visually impaired, and alleged violations of since-repealed “two sign” requirement in the Electronic Funds Transfer Act.

The current wave of website ADA claims follows a relatively consistent pattern. The targeted bank or other business receives a letter from counsel stating that the firm represents a person with a visual impairment. According to the letter, the client attempted to use the target's website and found that the site did not comply with the Web Content Accessibility Guidelines 2.0 (WCAG 2.0) in a number of ways, which are listed. (It is by no means clear that this is true.) The letter continues by advising the target that because the site does not comply with WCAG 2.0, it violates Title III of the ADA relating to public accommodations. The letter offers to work with the target to remedy the non-compliance, possibly by use of an expert retained by claimant. The letter contemplates entry of a consent decree, and, not surprisingly, seeks payment of significant attorney's fees that, while high, is less than it would cost for the business to litigate the matter to conclusion.

These claims contain a plethora of issues, both obvious and hidden, ranging from whether the ADA applies to websites at all to whether these “tester” plaintiffs have standing in the wake of the Supreme Court's decision in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016). How these issues ultimately are resolved will depend on a number of factors, not least of which is the Trump administration's approach. It nonetheless is possible to understand the current state of play and to frame likely issues as this wave of claims and litigations grows and ultimately passes. We begin at the beginning: Does the ADA apply at all?

Scope of Title III of the ADA

Title III of the ADA provides that “[n]o individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.” 42 U.S.C. §12182(a).

Title III of the ADA and its implementing regulations define a “place of public accommodation” as a facility whose operations affect commerce and fall within at least one of twelve categories: (1) hotels, motels, and lodging establishments with at least five rooms for rent; (2) restaurants, bars and other establishments serving food or drink; (3) theaters, whether movie or live performance, concert halls, stadiums and other entertainment facilities; (4) auditoriums, convention centers, and other public gathering places; (5) retail establishments such as a bakery, grocery store, clothing store, hardware store, shopping center, or other sales or rental establishment; (6) retail service establishments such as a laundromat, drycleaner, bank, barber shop, beauty shop, travel service, shoe repair service, funeral parlor, gas station, office of an accountant or lawyer, pharmacy, insurance office, professional office of a health care provider, hospital, or other service establishment; (7) airports, train and bus stations or similar depots; (8) museums, libraries, galleries, or other places of public display or collection; (9) parks, zoos, amusement parks, or other places of recreation; (10) schools and places of education; (10) day care or senior citizen centers, homeless shelters, food banks, adoption agencies, or other social service center establishments; and (12) gymnasia, health spas, bowling alleys, golf courses, or other places of exercise or recreation. 42 U.S.C. §12181(7); 28 CFR. §36.104 (2013).

ADA delegates authority for creation of implementing regulations to the Department of Justice, 42 U.S.C. §12186(b), which has promulgated regulations to implement ADA. (These are discussed infra.) At the policy level, DOJ asserts that Congress contemplated the agency would apply the ADA in a manner that evolved over time and that regulations should likewise evolve as technology does. DOJ's expansive view of its authority to regulate rests upon a single word in §12182(a). DOJ reads the highlighted “of” in the phrase “full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation” to mean that Title III applies even if the goods, services, privileges or advantages offered by the subject business are consumed away from the actual place of public accommodation.

Here is where the first open question arises. There are cases that support DOJ's expansive view. See, e.g., Rendon v. Valleycrest Prods., Inc.,294 F.3d 1279 (11th Cir. 2002) (telephone screening for “Who Wants to Be a Millionaire” TV show discriminated against people with hearing and physical disabilities because it effectively barred access to participation in physical show); National Federation of the Blind v. Scribd, Inc.,97 F. Supp. 3d 535 (D. Vt. 2015) (“[T]he ADA applies to more than physical spaces … . All that matters is whether the good or service is offered to the public.”); National Federation of the Blind v. Target Corp.,452 F. Supp. 2d 946 (N.D. Cal. 2006)(inaccessible website impeded access to a place of public accommodation and therefore implicated Title III where website was heavily integrated with physical facility and operated as a gateway to stores). These cases rely heavily on the idea that “[i]t would be ‘absurd’ to conclude people who enter an office to purchase a service are protected by the ADA but people who purchase the same service over the telephone or by mail are not.” Scribd, supra, at 570, quoting Carparts Distrib. Ctr., Inc. v. Auto. Wholesaler's Ass'n of New England, 37 F.3d 12, 19 (1st Cir. 1994).

The case law is not one sided, however. There are cases holding that Title III does not apply to websites because they are not places. Jancik v. Redbox Automated Retail, LLC, 2014 BL 162751, at *8-9 (C.D. Cal. 2014) (a website was not a place of public accommodation because it was not a physical place and there was not a sufficient nexus between the website and physical kiosks); Cullen v. Netflix, Inc., 880 F. Supp. 2d 1017, 1023-24 (N.D. Cal. 2012) (websites are not places of public accommodation because they are not physical places); Ouellette v. Viacom,2011 BL 130494, at *2 (D. Mont. 2011) (a website by itself is not a physical place and the plaintiff did not allege a sufficient connection between the website and a physical structure); Young v. Facebook, Inc.,790 F. Supp. 2d 1110, 1114-16 (N.D. Cal. 2011) (explaining that a website is not a physical structure and plaintiff had not alleged a sufficient nexus to a physical place of public accommodation); Earll v. eBay, Inc., 2011 U.S. Dist., 2011 BL 333072, at *2 (N.D. Cal. 2011) (noting that places of public accommodation are limited to physical places); Access Now, Inc. v. Southwest Airlines, Co.,227 F. Supp. 2d 1312, 1319-21 (S.D. Fla. 2002) (rejecting the application of Title III to a website because it was not a physical location nor a means of accessing a concrete space).

Most recently, the Fifth Circuit held that vending machines are not “sales establishments” for purposes of Title III. Magee v. Coca-Cola Refreshments USA, Inc., 833 F.3d 530 (5th Cir., August 16, 2016). Joining the Third, Sixth and Ninth Circuits, the court held that Title III applies to “actual, physical places where goods or services are open to the public, and places where the public gets those goods or services.“ 833 F.3d at _____. As the Fifth Circuit acknowledged in Magee (and as the case law shows) , the First, Second and Seventh Circuits “have interpreted the term ‘public accommodation’ to extend beyond physical places.” Id., at n.23. Thus, there is a real circuit split on the foundational issue relevant to these website claims. Whether or not any litigant on either side of the docket chooses to be the “dog that caught the bus” is an open question.

Standards Apply to Websites

Assuming arguendo that Title III applies to a business website, the next question that arises is what standards apply? The literal answer is that no government standards apply at this time, but there are private standards relied upon by claimants.

As previously noted, the ADA itself delegates rulemaking authority to DOJ. 42 U.S.C. §12186(b). DOJ has moved with at most glacial speed in promulgating rules governing web accessibility. Once again, a little background is in order.

Title II of ADA regulates accessibility of governmental programs. In 2010, DOJ issued an Advance Notice of Proposed Rulemaking (2010 ANPRM) titled “Nondiscrimination on the Basis of Disability; Accessibility of Web Information and Services of State and Local Government Entities and Public Accommodations.” Five years elapsed, and in 2015, DOJ concluded that it should issue separate regulations for Title II and Title III.

In May 2016, DOJ issued a Supplemental Advance Notice of Proposed Rulemaking (“SANPRM”) in which it sought comments on 123 questions relating to web accessibility. 81 Fed. Reg. 28658 (May 9, 2016). The SANPRM gave interested parties until August 8, 2016, to comment in response. DOJ subsequently extended the comment period to October 2016.

The May SANPRM gives strong hints about DOJ's direction concerning Title III. First, it states that the WCAG 2.0AA access standards should apply to governmental websites, making it likely that the same standard will ultimately be applied to private websites. Second, the SANPRM suggests that Title II entities would have two years to comply after the final rule becomes effective, subject to a number of exceptions not here relevant. Third, the SANPRM hints that DOJ views social media and advertising content as potentially covered by ADA. For the moment, however, the takeaway from the SANPRM is that there are no DOJ-imposed standards governing websites.

Four questions follow from this brief summary: (1) What is WCAG 2.0AA? (2) How do I know if my website complies? (3) Is there liability under Title II in the absence of DOJ standards? (4) Are there defenses?

What is WCAG 2.0AA? The Web Content Access Guidelines or WCAG are standards created by W3C, the World Wide Web Consortium, which describes itself as an international community where 420 member organizations (, and a full time staff develop standards relating to all aspects of the World Wide Web. WCAG 2.0 has three levels of “success” for compliance, designated A, AA and AAA. AA is the middle level. WCAG 2.0 compliance rests upon four key words embodying principles that conform to the acronym “POUR”: (1) Perceivable –that the content itself and how to use the website (“user interface components”) can be perceived by users; (2) Operable – all users can operate the site; (3) Understandable – the user can understand the content and how to operate the site; and (4) Robust – the site functions well enough to be used by multiple technologies, including assistive technologies.

Compliance and Defenses

It does not take much time reading the WCAG 2.0 website to see that implementation of these principles is a technical issue that has two components: (1) Who does it? and (2) What does it cost? The answer to the first question is deceptively simple: web designers do this work. The real question is whether the web designer is fully capable of providing the necessary services and can provide the necessary testing and certification that its work does in fact meet the relevant criteria.

It is difficult to find reliable data on costs. A regulatory impact analysis performed in conjunction with a 2011 DOT notice of rulemaking on accessibility of air travel kiosks and websites states that the cost of making a website WCAG 2.0 compliant ranged from $31,200 for very small sites to $225,000 for larger sites, with annual maintenance costs ranging from $4,800 to $23,400 per site. These numbers may not translate well to other businesses.

Moreover, these figures may not provide a true estimate of the incremental costs associated with compliance, particularly for small businesses or those operating on tight margins. The drive-up ATM cases provide some guidance. For example, the author represented a small community bank that was sued for having an old, non-compliant drive-up ATM. The cost of obtaining a compliant ATM was between $40,000 and $50,000. (The old machine could not be retrofitted.) At the time it was sued, the Bank was operating under memorandum of understanding with its regulator; any increased capital outlays would have violated the MOU. As a bank officer candidly admitted, “I can put in a new ATM or fire staff.” This bank seriously discussed decreasing its services (removing the ATM altogether) because it could not afford the capital cost of compliance.

One of DOJ's 123 questions in the May 2016 SANPRM was whether there are enough consultants/designers/techs available to get all of the necessary work done on the contemplated schedule. Again the drive-up ATM cases provide some guidance. It quickly became apparent that there would be substantial delays in manufacturing and installing the hardware necessary to make drive-up ATMs ADA compliant. Website compliance does not necessarily require the same types of hardware that are necessary for physical ATM modification (although the author specifically disclaims knowledge of hardware requirements to support a given level of website operability), but the questions become much more complex as the level of interaction supported by a website grows.

All of this loops the analysis back to the statute. To constitute discrimination, a defendant must be a “public accommodation” and fail to provide a certain modification or accommodation that (1) would be “reasonable under the circumstances”; (2) would be “necessary for th[e] person” with a disability; and (3) would not “work a fundamental alteration” in the service or accommodation provided by the defendant. PGA Tour, Inc. v. Martin, 532 U.S. 661, 688 (2001). A plaintiff alleging a Title III violation bears the burden of proving reasonableness and necessity under the first and second prongs, at which point the burden shifts to the defendant to show a fundamental alteration under the third prong. See Alumni Cruises, LLC v. Carnival Corp.,987 F. Supp. 2d 1290, 1305 (S.D. Fla. 2013), citing Johnson v. Gambrinus Co./Spoetzl Brewery,116 F.3d 1052, 1052 (5th Cir. 1997). Section 12182(b)(2)(A)(iii) includes an affirmative defense that protects a business from liability as defined in 42 U.S.C. §12103(1) if compliance would cause an “undue burden.”

At this point, in the absence of regulations, reasonableness remains the standard. On the one hand, this can mean that there is discrimination without a formal standard, as in Rendon, supra, but it also supplies an independent burden on the plaintiff to show that it would have been reasonable under the circumstances to provide the specific accommodation(s) being requested.

“Undue burden” is a defense. DOJ regulations define “undue burden” as a “significant difficulty or expense.” 28 CFR §36.104. The regulation requires a reviewing court to take into account (1) the nature and cost of the action needed; and (2) the overall financial resources of the site or sites (in context this means, the physical site) involved in the action; the number of persons employed at the site; the effect on expenses and resources; legitimate safety requirements that are necessary for safe operation, including crime prevention measures; or the impact otherwise of the action upon the operation of the site. These are fact-specific and business-specific. See, e.g., Todd v. American Multi-Cinema, Inc.,222 F.R.D. 118 (S.D. Tex. 2003) (example of “undue burden” evidence). There clearly are businesses for which WCAG 2.0 AA compliance will result in an undue burden.

A business' inability to comply because of supplier delays or other such problems is a somewhat different issue, going more to whether the Rule 65 requirements for injunctive relief are met than it does to the criteria for statutory “undue burden” as set forth in the regulations. In other words, to obtain temporary relief, a plaintiff must still satisfy the well-known requirements of Rule 65. See generally Gazvoda v. Secretary of Homeland Security,2015 BL 387182 (E.D. Mich. 2015). In addition, where a business has already taken material steps to bring itself in compliance, an injunction, the relief generally requested in these claims and suits, may permissibly be denied. See generally Chao v. Barbeque Ventures, LLC,2007 BL 144471 (D. Neb. 2007).

In summary, the receipt of a demand letter alleging deficiencies in a website does not mean that a business has no room to negotiate and no opportunity to succeed should litigation ensue. The presence or absence of insurance coverage, a point beyond the scope of this article, may be a material factor in the decision-making process. Prior or ongoing efforts to comply and the many factors bearing on the decision to litigate definitely apply to these claims.

Standing and Spokeo

The Supreme Court's decision in Spokeo Inc. v. Robins, supra, certainly has reopened questions concerning Article III standing in many different contexts. See, e.g., Jackson v. Abendroth & Russell, P.C., 2016 U.S. Dist. LEXIS 125986, slip op. at *23-*25 (S.D. Iowa, September 12, 2016)(collecting post- Spokeo cases denying standing because of a lack of injury-in-fact). Whether it will affect these claims is an open question.

Chapman v. Pier 1 Imports (U.S.), Inc., 631 F.3d 939 (9th Cir. 2011), often is cited as explaining pre- Spokeo standing requirements for Article III standing in ADA cases. There, the plaintiff alleged that various barriers existed to his shopping at a Pier 1 store. The Ninth Circuit held that this was insufficient to confer standing, stating:

  • An ADA plaintiff must show at each stage of the proceedings either that he is deterred from returning to the facility or that he intends to return to the facility and is therefore likely to suffer repeated injury. He lacks standing if he is indifferent to returning to the store or if his alleged intent to return is not genuine, or if the barriers he seeks to enjoin do not pose a real and immediate threat to him due to his particular disability.

Id., at 953.

The demand letters currently being circulated allege that the visually impaired plaintiff, who typically does not have any form of customer relationship with the business, used the website and found it to be deficient in some fashion. (Again, businesses should be aware that there can be a significant gap between what the demand alleges is wrong and what actually exists.) The letter may then seek to bridge the gap required by arguing that the claimant is a “tester plaintiff,” who has standing to pursue the ADA claim. See, e.g., Houston v. Marod Supermarkets, Inc.,733 F.3d 1323 (11th Cir. 2013) (permitting a tester plaintiff case to go forward but noting that the “tester” alleged frequent ongoing visits to the market in question).

Although a comprehensive review of standing in ADA cases is beyond the scope of this article, the prior decisions in most ADA cases appear to conflate the first and third elements of constitutional standing: (element 1) injury in fact (element 3) that is likely to be favorably redressed by a favorable ruling. Spokeo, supra, at 1547-48. Spokeo makes clear that “a bare procedural violation, divorced from any concrete harm [does not] satisfy the injury-in-fact requirement of Article III.” Id., at 1549.

The website tester plaintiffs typically have no prior or present relationships with the entities whose websites they visit. They have no real intent to return (in any meaningful way) to the websites they have visited, and one must accept subjectively their representation that they are injured by having voluntarily surfed through checking websites in the hope that they will find one with alleged deficiencies. Romero v. Dep't Stores Nat'l Bank, et al., 2016 BL 270019 (S.D. Cal., August 5, 2016), contains a thoughtful analysis of the implications of Spokeo in TCPA cases. To use Spokeo’s term, it is difficult to see how courts can elide the actual injury and redressability elements of Article III standing when any time wasted was voluntary and only the product of a click. (This is not to minimize the second element of standing (“fairly traceable”), because it can be argued that harm is not fairly traceable to a defendant's conduct when the plaintiff voluntarily seeks out the situation about which he or she complains in the hopes of finding a defect.)

Summing Up

Like the “two sign” ATM cases and drive-up ATM ADA cases before them, these website accessibility cases contain serious legal and constitutional issues. It remains to be seen whether some targeted business will follow through on those issues to conclusion.

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