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Online-Only Businesses Are Not a Place of Public Accommodation: California State Appellate Court Follows the Ninth Circuit in ADA-Related Ruling

Is an online-only business a place of public accommodation under Title III of the Americans with Disabilities Act of 1990 (ADA)? Yes, claimed the plaintiff in Martinez v. Cot’n Wash, Inc., 81 Cal. App. 5th 1026 (Cal. App. August 1, 2022). The Martinez plaintiff, who was permanently blind and used screen readers (i.e., software that audibly reads website content), alleged that “well-established industry standards” require websites to allow blind or visually impaired people access to websites, which one of the defendant’s websites—an e-commerce site—did not. No, said the California Court of Appeal, disagreeing with the plaintiff.

Key Takeaways

An online-only business is not a “place of public accommodation” within the meaning of ADA Title III, § 36.104, in California. The Martinez decision aligns the Unruh Civil Rights Act, Cal. Civ. Code § 51 (Unruh Act), with decisions from the U.S. Court of Appeals for the Ninth Circuit that an e-commerce site without a brick-and-mortar location is not subject to the ADA. The same, however, is not true in other federal circuits, which have held that online-only businesses are places of public accommodation that must comply with the ADA.  

Notwithstanding the Martinez decision, online-only businesses operating in California are not off the hook with respect to online accessibility issues. The California Consumer Privacy Act regulations – both the current version (§999.305(a)(2)d) and proposed revised regulations (§7003(b)(3)) – require that a business operating a website processing personal information of California consumers ensures that the website is accessible to a consumer with disabilities. Applicable industry standards to meet this requirement include the widely-recognized Web Content Accessibility Guidelines published by the W3C.

What Happened?

After informing the defendant, Cot’n Wash, Inc., about the accessibility issues with its e-commerce site, plaintiff filed suit, alleging violation of the Unruh Act, which provides: “All persons within the jurisdiction of this state. . . 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(a). The Unruh Act creates two theories of recovery for plaintiffs: (1) a violation of the ADA or (2) the intentionally discriminatory denial of access to a business. Id

In his complaint, the plaintiff alleged that the defendant’s failure to equip its website with screen reader software was an Unruh Act violation because it was a violation of the ADA.

The ADA requires a plaintiff to show that (1) he or she has a covered disability; (2) the defendant is a private entity that owns, leases, or operates a place of public accommodation; and (3) the defendant denied the plaintiff public accommodation because of his or her disability. ADA Title III, § 36.201. While the state court plaintiff in Martinez proclaimed that a website is a place of public accommodation under California law, the federal Circuit Courts are split. The ADA, drafted in the 1980s and passed in 1990, does not explicitly address websites and other technology upon which individuals routinely rely: the definition of a place of public accommodation does not mention the Internet. ADA Title III § 36.104.

Courts in the First, Second, and Seventh Circuits consider “websites” together with other non-physical places of business (such as order-by-phone or mail-order catalogs) as “service establishments,” which is one of the 12 categories of facilities within the meaning of the ADA’s definition of place of public accommodation. See, e.g.Nat’l Ass’n of the Deaf v. Harvard Univ., 377 F. Supp. 3d 49 (D. Mass. 2019). To conclude otherwise would lead to absurd results, according to the First Circuit, especially because Congress clearly stated its intention that the ADA should adapt with changes in technology. See Carparts Distribution Ctr. v. Auto. Wholesaler’s Ass’n, 37 F.3d 12, 19 (1st Cir. 1994).

In contrast, the Third, Fifth, Sixth, Ninth, and Eleventh Circuits read the ADA more narrowly and restrict places of public accommodation to exclusively mean a physical location.  See, e.g., Parker v. Metro. Life Ins. Co., 121 F.3d 1006, 1014 (6th Cir. 1997). These federal courts have reasoned that in the ADA’s definition of a place of public accommodation, essentially all of the listed categories describe a physical location. Parker, 121 F.3d at 1014.  Martinez noted, however, “a denial of equal access to a website can support an ADA claim” if this denial is related to equal access to or enjoyment of the goods and services offered at the defendant’s physical facilities. Martinez at *1041.  

Mindful of this Circuit split, the Court in Martinez undertook a detailed analysis of the statutory language before joining longstanding Ninth Circuit precedent to find that online-only businesses are not places of public accommodation. Id. at *1043. The Court also suggested that the “nexus theory” connecting a business’s website with its physical location (e.g., a brick-and-mortar store) is inapplicable in Martinez, where the defendant operates a standalone e-commerce site without a physical location. Id

The two previous state law cases on the topic dealt with scenarios where the nexus theory did apply, so this distinguishing factor in Martinez creates a new line of cases in California law. Id. at *1042.  

The Martinez Court noted that the Circuit Courts on either side of the split recognized that the matter is unsettled, and likewise advanced the viewpoint that in the absence of clarification, “the question of how to properly balance the benefits and burdens of imposing similar requirements on purely digital retailers remains for Congress to separately consider.” Id. at *1047. Congress and the Department of Justice “have long been aware of the confusion” about whether websites constitute a place of public accommodation, the Martinez Court remarked, but their choice to not amend the statute or issue formal guidance on its interpretation weighs against the interpretation the plaintiff would have favored. Id. at *1049, *1052; see also 82 Fed. Reg. 60932. Congress and the DOJ’s awareness of the confusion was not enough for the Court to read “websites” into the ADA’s definition of a place of public accommodation. 

The other basis upon which the plaintiff could have shown an Unruh Act violation is a finding of intentional discrimination by the business. Under California law, the disparate effect of a neutral structure is insufficient to show intentional discrimination under the Unruh Act, even if the defendant had an opportunity to address the known discriminatory effect of a policy. Id. at *1036­-37. The Court in Martinez, noting that the defendant did not add screen reader software to its website after the plaintiff gave notice of the issue, still found that this failure to correct the discriminatory effect of the website was not intentional discrimination, which must be “willful, affirmative misconduct.” Id. at *1036. 

The plaintiff argued that under a similar California law, the Disabled Persons Act (DPA), there is no requirement that a plaintiff show the defendant’s intent to succeed on a claim of discrimination: a showing of “deliberate indifference” would be sufficient under that law. Id. However, the Court rejected this argument, citing Ninth Circuit precedent that bars importing the DPA standard into Unruh Act claims. Id. at *1037. In claims like the one in Martinez, the plaintiff must show the defendant’s discrimination was willful, affirmative misconduct in order to recover. 

Conclusion

Now that California state courts are following Ninth Circuit precedent regarding ADA discrimination and with the upcoming state privacy laws coming in force in 2023, e-commerce businesses and other online-only businesses should take another look at their overall compliance efforts to ensure accessibility issues are addressed.

Caroline Dzeba also contributed to this article. 

© Copyright 2022 Squire Patton Boggs (US) LLPNational Law Review, Volume XII, Number 279
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About this Author

Kyle Dull Data Privacy & Cybersecurity Lawyer Squire Patton Boggs Miami Florida
Associate

A former assistant attorney general, Kyle has extensive experience investigating and litigating privacy and advertising law violations. He now draws on that experience to advise clients on their own data privacy, cybersecurity and advertising risks, and is regularly retained by corporations to defend and resolve enforcement actions.

Kyle has a solid understanding of domestic and international privacy laws and counsels digital media companies looking to protect their digital property and avoid potential legal issues by negotiating and drafting licensing, joint venture and data...

+1 305 577 2840
Julia B. Jacobson New York Cybersecurity Attorney Squire Patton Boggs
Partner

Julia B. Jacobson is a Partner in Squire Patton Boggs' Data Privacy, Cybersecurity & Digital Assets Practice. For over 20 years, a world-class roster of national and multinational clients has turned to Julia for practical and tactical advice and counsel on privacy and cybersecurity compliance strategies, data breach response, technology transactions and marketing initiatives.

A significant portion of Julia’s practice is devoted to advising clients on an array of privacy, cybersecurity, data breach and data governance matters. She assists...

212-872-9832
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