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tv   Hearing Focuses on Americans with Disabilities Act Lawsuits  CSPAN  May 19, 2016 9:00am-11:31am EDT

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. ladies and gentlemen of the convention, my name is geraldine ferara. i stand before you to proclaim tonight america is the land where dreams can come true for all of us. >> the 1984 vice president acceptance speech of new york congresswoman geraldine at the international convention in san francisco. she was the first woman to be nominated as vice president for major party. for complete schedule go to cspan.org. >> you're on c span 3. we're live now at the house on capitol for the hearing on
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americans with disability act. the law passed in 1990 bands accommodation such as office buildings and restaurants to make their facilities accessible to people with limited mobility. the subcommittee on civil justice is holding a hearing on whether it changes to the law should be made to make it harder to sue for alleged violations of the law. they'll hear from some members of kcongress. they'll hear from a business owners and interest groups as well on a hearing that should get underway shortly. the house is getting underway. the final day of work for the week as they finish up work today on the military construction veterans affairs bill. the senate gaveling in at 9:30 eastern about a half an hour from now and they'll continue work on their combined military construction veteran's affair bill transportation and housing and that will include a vote this morning on zika funding
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$1.1 billion is the proposal. that's set for the house over on
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cspan. constitution of civil justice will come to order. without objection the chair is authorized to recess the committee at any time and welcome to you gentlemen, sorry for being a little late. we've called this hearing today to examine hr 3765, the education reform act of 2015 and hr 241 access act of 2015, which are two common sense proposals that require plaintiffs to provide defendants with written notice and an opportunity to correct an alleged violation voluntarily before they may file a lawsuit and force a business owner to incur legal costs. these bills, which only apply to cases involving public
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accommodations, would both improve public access for disabled individuals and eliminate thousands of predatory lawsuits and damage that -- that damage the reputation of ada and its over all purpose. when the ada was signed into law by president george h.w. bush in 1990, the goal was to provide disabled to equal access. in large part the ada has worked. it's been hailed as the most sweeping nondiscrimination legislation since the civil rights act of 1964. unfortunately, enterprising plaintiffs and their lawyers have abused the law by filing a flurry of ada lawsuits aimed at churning out billable hours and extracting money from small businesses rather than improving access for the disabled as the ada intended. the predatory lawsuits are possible for two chief reasons, first 100% compliance with the
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ada is very difficult to achieve. even though good faith efforts, such as bringing or hiring an ada compliance expert, a business can still find themselves subject to a lawsuit for almost any minor or unintentional infraction. according to one ada compliance specialists "i rarely if ever see circumstances or instances where there isn't an access violation somewhere. i can find something wrong anywhere." this makes compliance a challenge, even for those with the very best of intentions. second, unlike title two of the civil rights act, the ada does not require require any notice before a lawsuit can be filed. this has led to thousands of lawsuits being filed for issues of relatively minor noncompliance, such as a sign being the wrong color or having the wrong wording. abuse of the ada has been noted
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by federal judges in numerous cases throughout the country who have referred the proliferation as a cottage industry. these judges have recognized that the explosion of private ada litigation is primarily driven by the ada attorney's provision. they explained the ability to profit has led some law firms to send disabled to individuals to as many businesses as possible in order to have them aggressively seek out all violations of the ada. then rather than notifying the businesses of the violations and attempting to remedy them, lawsuits are filed. as settlement prior to filing a lawsuit does not entitle plaintiff's counsel to attorney's fees under the ada, there is an incentive. as one judge observed the result is that the means for enforcing the ada attorney's fees have become more important and desirable than the end, which is
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accessibility for disabled individuals. but the ada was enacted to protect disabled individuals, not to support a litigation mill for entrepreneurial plaintiff's attorneys hunting for ada violations just to file lawsuits. these bills examined today would help eliminate predatory ada lawsuits, increase compliance with the ada by giving businesses the opportunity to fix ada violations instead of dragging them into litigation and improve the reputation of the ada in the eyes of the public and ultimately improve access for disabled individuals. lawsuits would be reserved for those instances in which offenders are truly unwilling to make appropriate changes. this would also allow legitimate claims to move through the legal system faster. moreover, requiring notification before filing an ada lawsuit will benefit our company, many small businesses have been forced to close because of
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accessibility lawsuits and others have unnecessarily spent thousands of dollars litigating claims. small businesses are critical to america's economic recovery and should not be burdened by unnecessary litigation. it's an honor to have congressman ted po whom introduced 3765 and congressman ken cal bert who introduced hr 241 both here to testify about their respective bills and i look forward to your testimony and the testimony of our other witnesses and with that, i would recognize the ranking member of the subcommittee, from tennessee for a statement. >> thank you, mr. chair. colleagues, it's good to have y'all here. this is -- not the first time this has been a hearing on this type of issue since 2000 there have been, i think, three times that bills have been filed and hearings on prenotification concerning ada. i have met previously with the
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folks from the world, hotel world and the disability community and tried to get a more better grasp on the issue than come up with some type of reasonable solution. it's difficult to do it, but folks don't really want to change for their kind of positions they've got, some of them are based in 199 # 0 and they'll tell me that this is what we did in 1990 and it's kind of like, well, that's fine, i wasn't there in 1990, my job is not what happened in 1990. when we look at these cases, private parties are indisspenceble. this is a civil rights law. we have eve got to have private attorney generals and private attorney generals have been so effective in many areas and seeing that our laws are effectively forced, civil rights particular and the ada. because of that, there was an agreement in 1990 said that it wouldn't be damages to these cases under the ada attorneys
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fees. so it was a compromise that it was done. i understand that there are some folks that think there are attorneys out there throwing out wide nets and they don't really have a specific target and i think that's wrong. i definitely think that's wrong. but i would suggest to them in coming up with some type of solution, and part of that is in the bill, i think, you have to have specificity in your complaint. you can tighten that up and see if they have not just a boilerplate complaint, although i don't know why rule 11 hasn't worked against those types of complaints in the past, so be it, maybe that will help. if you get into this situation to where you -- obviously, the title of this hearing is the examining legislation to promote the effective, i know its effective enforcement of the ada's accommodations, so it's -- we have to presume, in there, that we want to enforce the
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ada's public accommodations provisions, most of what we have eve got here is not so much for enforcement, limiting enforcement and limiting the way we go. that's just the position about minor contradiction in the title and what i see is the focus of the legislation. you can't -- i've never seen a criminal penalty that would be created to anybody who asserts a civil right and this would be a case you could have civil penalty, criminal penalty, if you don't give your notice provision first, and that seems really harsh. and i think some of the folks agree, further than it should go and that -- but there can be abuses, i think there might be abuses. if there are abuses i want to clean them up. and i did that with this committee and looking at trolls and i know they're not your pals, but they may be, marshall county texas deal and it's not
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necessarily a great world out there. i'll suggest if you wand to amend this presuit notifications you ought to have something that also rewards the good guys and clean up the mess after 120 days and everybody said, oh, the good guys come forth and get notice, that's what you want to get, you want the mirrors or the signs or the rails or whatever, taken care of. and it's good guys do it, make substantial clients, great. but if they don't, you've got bad actors or if they lolly gag or they don't do substantial, i think you've got to have a stick and if you'll change this, you've dot have a stick to see the bad guys get punished somehow, i'm not quite sure how you do it, it's got to be something to the people to give them notice provision in time to be dilatory. but punish them for not being good guys. one of my thoughts was to give some kind of damages, liquidated damages, maybe some amount that's equal to or multiple of
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what it requires to fix the area or maybe there would be some other kind of damages we can come up with to punish the owners that aren't the good guys. you've dot to have consequences for those people and otherwise they're just getting the benefit and they're not being the folks that i know are interested in helping through this action and the folks with the ada community, i mean, they want like i want the ada enforced and this is not about attorneys, this is about ada provisions. but the attorneys do bring the cases with the notice provision, they don't have -- not getting attorneys fees as they bring a party to the attention of business community and they clean it up, and the other side gets nothing for it. there's unlikely there's going to be continued interest in those people, the attorneys to follow through and giving the notice provisions advising the clients and trying to cure problems with the ada. that's just the way the system
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works, people have got toave some skin in the game and you're taking the skin in the game out. so that's going to hurt, i think, the enforcement here unless we come up with something on the back end that makes it a little bit sweeter. i'm a lawyer and i have a disability. i helped pass the ada state statute in tennessee and i'm interested in seeing the enforced appropriately and properly, i'm not interested in seeing businesses get these wide nets thrown and sub to folks looking out more for attorneys fees or disabilities community. i think that's a disservice both to the association and members of the bar and to people with disabilities, so i hope we have a fruitful discussion. and hope we can come up with a solution. i think it's a good ideas here, but i don't think the solution is here and i think we need to look at some kind of a stick to make sure the bad guys get slapped so the good guys can deal with a notice. that i yield back the balance of
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my time. >> and that's just the way it is. >> i think the gentleman and i will now yield to ranking committee for full committee. >> thank you, chairman franks. and top of the morning to you and our distinguished witnesses and the guests that have joined us this morning. the three bills that are subject of today's hearing would institute a notice and cure requirement under title three of the american abdomnd disabiliti act of 1990. specifically these measures will prohibit a lawsuit from being commenced unless the plaintiff first gave the business owner
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specific notice of an alleged violation an opportunity to fix toward remedying the violation. let me begin by stating what i said previously when similar proposals were considered by our committee in the year 2000 and, again, in the year 2012. "i am adamantly opposed to any effort to weaken the ability of individuals to enforce their rights under title iii's public accommodations provisions. and here is why, first, the notice and cure requirement will generate numerous litigation traps for the unweary and ultimately dissuade many
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individuals from pursuing their legitimate claims. for example, two of these bills would require a complainant that provide specific notice of the allege violation before he or she may file suit. but they failed to divine what constitutes specific notice nor do they define what is substantial progress toward compliance. as a result, courts will have to struggle to determine what these inherently vague terms mean. there by, creating an open invitation for well financed business interest to engage in endless litigation, possibly, that would drain the typically limited resources of a
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plaintiff. the measures would under mine a key enforcement mechanism of american with disabilities act and other civil rights laws. the credible threat of a lawsuit is a powerful inducement to businesses to proactively take care to comply with the acts requirements. yet a presuit notification requirement would create a disincentive to engage in voluntary compliance as many businesses would simply wait until receiving a demand letter before complying with the law and this requirement also would discourage attorneys from representing individuals with claims under title iii because attorney fees may only be recovered if litigation ensues.
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plus an individual with a title iii claim would not be entitled to recover such fees if the extent of the attorney's representation was limited to drafting the demand letter presuit notification will make it more difficult for disabled persons with valid title iii claims to obtain legal representation to enforce compliance. finally, title iii by its terms is already designed to make kplans relatively easy for business -- compliance relatively easy for businesses. so i am pleased to join the hearing and i yaeld back aield time remaining. thank you, mr. chairman.
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and i thank the gentlemen and without objection other members' opening statements will be made part of the record. before i introduce the witnesses i would like to submit two statements for the record. the first is letter for national theater owner and support of hr 3765 second is coalition letter also in support of 3765 without objection these statements will be entered into the record. so let me now introduce our witnesses, we have two very distinguished panels today. and that will be -- begin by introducing the first panel of witnesses. our first witness is representative ted po. mr. po represents texas second district and is a member of the judiciary and foreign affairs committee. glad to see you, sir. and our second witness is representative ken calbert. he represents california's 42nd district and member of the house of appropriations committee.
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glad you're here. i will now recognize our first witness, congressmen ted po and if you'll turn that microphone on. >> yes, sir. thank you, mr. chairman. thank you for allowing me to be here and also i would like to thank congressman calbert for his work on this issue for a good number of years. as the chairman has pointed out or has pointed out in the past, i'm a former judge, prosecutor, lawyer, been a legal professional for almost 40 years. and this is a situation where in this particular hearing that we're having deals with, i think, abuse of a good law. i believe strongly the ada. and it needs to be always enforced. and the goal of the legislation is to make sure that when there is a violation anywhere across the fruited plain, that the violation gets fixed so that
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there's accommodation for the citizen to get into that business. but the legislation hopes to prevent what is occurring that there are lawsuits being filed not to get accommodation for the citizen, but to get money so that people settle and the alleged violation may or may not ever be addressed. and what happens is that lawyers are making a lot of money off of this, what i think, are frivolous lawsuits, to the detriment of the person who is actually being prohibited of going in to some businesses because the goal is not being reached to allow accommodation, what is happening is lawyers are filing lawsuits, businesses settle rather than go to court and lawyer gets -- we don't know, how much of that money. so -- in the last ten years, there have been -- these frivolous lawsuits have been filed under public accommodation
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section of the ada, some of these lawsuits are, in my opinion, shakedowns for businesses and they're using the ada as a basis to obtain quick settlements, rather than go to court. for example, some of these law firms and there are specific law firms in different parts of the country that do this, they'll file notice or get a letter stating that there is not a proper pool lift in a particular motel or hotel. and many of these -- some of these hotels don't even have a pool or these motels, but the businesses settle rather than go to court because it's the cost of litigation. and that is the motivation of these lawsuits. we're talking about settlements of around $5,000 apiece, all from the same individuals, organizations that are making many of these claims is going
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from business to business. it's the business model that's been working in the last ten years where 10,000 of these lawsuits have been filed in florida a plaintiff named howard kohen has filed 529 of these lawsuits. california martin boegle filed 124. pennsylvania christopher melow has filed 21 of these lawsuits. in some cases like howard cohen he sued the hotel despite the fact that he was never a registered guest at the hotel. sounds somewhat suspicious. the ada expert who actually wrote part of the ada bill helped the hotel fight in this particular case. he stated that he was essentially operating "a
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continuing criminal enterprise that boils down to extortion" that does not get people into these motels. it allows for, as he said, shakedowns for money to be collected by these, as i think they are, ada trolls. and some of the letters and notices are so nebulous that the person receiving the notice doesn't even know what the violation was. we've got a realtor company in houston manages many shopping malls and one particular shopping mall, there's 40 parking places that are painted blue and ada compliant, but they're still sued because the violation doesn't allege -- or the letter doesn't allege what the specific violation is. this bill will require basically three things that they be put on notice so they can fix the problem before there's a lawsuit. if that's the goal to fix the problem, put the business on
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notice. if the business doesn't respond to this notice, within 60 days, lawsuit commence. if the business doesn't fix the problem with 120 days and i think that can be worked on how many days, file the lawsuit. that does not prohibit the citizen from filing and getting their day in court. if we want to fix the problem, let's fix the problem. it also allows for arbitration if the size not require neared the law. it's voluntary and also requires that the justice department come up with some very working with the industry and the a -- and people in the ada community different models on how they can educate all businesses throughout the country on what the ada says and how they can comply with the law as it is written. so, that is why legislation is. it's to put them on notice, fix
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the problem. get ada compliant, it's not to really allow for these frivolous lawsuits to be going -- the money going to, i think, the attorneys rather than fixing the problem and i'll yield back my time and that's the way it is. >> and i thank you, gentlemen and i will now recognize our second witness, representative calbert, sir, if you can make sure that microphone is on. >> thank you mr. chairman and members of the subcommittee. i thank you for the opportunity to testify on hr 241, the access act. as you know the ada has been mentioned one of the most important pieces of civil rights legislation to be passed in this country. we can all agree that providing all americans with access to public accommodations is an invaluable legislative objective. the purpose of ada is to ensure access to disabled to the public accommodations provide appropriate remedial action for
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those who have suffered harm as a result of noncompliance. although there are times the litigation by harm of individual is necessary, there's an increasing number of lawsuits brought under the ada that are based upon a desire to achieve financial settlements, rather than achieve the appropriate modifications for access. these lawsuits filed often referred to as drive-by lawsuits place legal fees on small business, often time business owners are unaware of the specific nature of the allegations brought against them. in early 2011 frivolous ada lawsuits against small businesses reached all-time high throughout california. as a result my good friend and colleague former congressman, championed the issue and introduced the original access act in 112th congress. i was pleased to have reintroduction in getting the 113th congress. in january 2015 i reintroduced
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legislation hr 241 the access act. hr 241 is cost free common sense legislation which alleviates the financial burden fall businesses are facing. while still fulfilling the purpose of ada any person agreed by a violation of ada will provide the owner or operator with written notice specific enough to allow such owner or operator to identify the barrier to their access. within 60 days the owner operator will be required to outlining improvements that will be made to address the barrier. the owner operator will have 120 days to make the improvement. failure to meet any of the conditions will allow the lawsuit to go forward. without question we must ensure with individuals with disabilities are afforded the same access to those without. as former small business owner and rest raun ore i have personally have had to deal with these, and i can say for certain that frivolous lawsuits do not accomplish any goal, allowing
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small business owners to fix ada violations with 120 days rather than waiting for lengthy legal battles to play out is more thoughtful timely and reasonable approach. while the ada is national law as i mentioned earlier, california has become ground zero for for ada lawsuits. california is home to more federal disability lawsuits than the next four states combined. 2014 report determined that since 2005 more than 10,000 federal ada lawsuits have been filed in five states. the highest disabled
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and both locations for violation and it is not and and that is
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out of our city. proud to filing a lawsuit notification and the facility -- for the entrance and the facility is narrow. now, that this is this facility is not up to code with the ada. therefore, the particular places of business should be connected immediately with penalty. my doughnut shop did not have the outside barriers. i will n-- i should know, i am there. all businesses should have 30 days to correct violations and 120 days for constructional period. in my experience, they have never become in my wheelchair.
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if the ada regulation remain the same and require business to move for the inconvenience of disabled people, then the ada will creating hazard for the able bodies. we as this community should not be able to feel segregated from the rest of society. this creates bitterness between the customer and business. i do not need a sign to inform me that i am disabled and where i should sit. they should concentrate on accessible curves and ramps that do not wrap around the building. generally, when i enter through the the back door, i feel like businesses are embarrassed or ashamed to associate with me because of my physical limitation. this is understandable to a point because there are few disabled including lawyers that make it their personal mission to collect money from businesses, that they have never
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been to. it seems this handful of lawyers think they're only helping the disabled community, that they are helping the community, moreover, they are separating the disabled community and the able community. the lawyers are causing the able body community to dislike americans with disabilities act. this make the rest of small business owners who are trying to earn an honest living look bad. throughout my life people are generally very helpful, when i am out and about in community, people offer -- whether i accept or decline is up to me. i also have a voice if i need assistance, i can ask for help. i do not want business owners to clinch when they see me come into their establishment. personal experience, i was at downtown stake castle and had to use the rest room. i spotted a bar and rest room and asked if i could use the rest room. then they asked me if i'm going to buy a drink.
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my aid responded no she does not drink but she needs to go to the rest room. no, they did not give me permission to use the rest room. since ada lawyers are going to sue small business, they're putting signs on their window. i would like to ada regulation to be fair and not be taken advantage or misused by people that know the laws such as lawyers and certified access specialists persons. elected officials and inspectors should inform of all new laws and changes. if this is money hungry law, many business will be forced to shutdown and there will be many empty buildings and communities because they do not have the money to pay off -- for me, this is wrongdoing and this using the
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ada. i notice jerry brown signed sp 269 which will limit damages for certain minor for technical violations of the ada. in my opinion, lawsuit is still a lawsuit. doesn't matter if the amount is reduced. thank you. >> and i thank you, ms. ky. and i now recognize our second witness, ms. shaw. is the microphone on? >> chairman -- >> ms. shaw you may have to bring that closer to you, i'm not sure what -- >> distinguished member, thank you for the opportunity to testify today. it is an honor to appear before you to share my story. my name is lily shaw and i'm a second generation hotel year and
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attorney from georgia. my parents my grated from india in the 1980s and bought their first hotel in milledgeville, georgia. i spent my first eight years of my life on days inn, 30 years later my family owned several hotel that is employ nearly 400 people. i own two hotels that amount to 150 guest rooms and employ over 20 dedicated employees. i'm here representing the asian american hotel association, members own over 40% of all hotels in united states and employ over 600,000 american workers accounting to $10 billion to payroll annually. recently small businesses have come under attack by plaintiffs seeking to make a quick buck. to advance the corrupt goal. that manipulate one of the important civil rights laws in our country, americans with disabilities act. i was recently sued for allegations of ada at my hotel
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in atlanta. i was surprised to think that a guest at my hotel was denied service. i contacted the general manager to learn that the plaintiff had never actually stayed at our hotel, nor was there any evidence that he or his attorney visited the property. the claims were extremely vague and general. among several issues he stated a failure to ro vied -- provide entry. my swimming at hotel has been closed since the day i purchased it. it is empty and covered with a tarp, providing for failing to provide entry to a part of my hotel that has been close today the public. . it is clear. and that the attorneys are using him as a proxy. i now have two options, i can
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either fight the suit, subject my business, employees, families, the months of intrusion and litigation and pay thousands of dollars in defense fees or i can settle with the plaintiff and pay his attorney thousands of dollars in which the attorney will likely be the only one with the financial gains. we cannot afford to pay outsetlement after settlement and defend against meritless suits aimed at playing on our fears. so many of us are minorities. it would imply that i'm guilty of violating a civil rights law. it will send a signal that it's sub standard and i do not care for my guests. it could impact my ability to attract new customers and to finance additional properties and grow my business. it is a no-win solution. we need to find a solution that discourages attorneys from abusing the ada for dishonest purposes. hr 3765 for ada education and reform act is vehicle that balances the importance protections conferred by the ada
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that afford small businesses the opportunities to address any issues that may exist. it describes detail of potential problem, requirement to provide notice and care period in order for the owner to recognize and areas of concern. it will also provide a collaborative solution that promotes improved accessibility. mr. chairman and members, thank you for the opportunity to testify before you today. i appreciate your listening to have an unscrupulous attorney has targeted me and several others in an effort to extort others under the guide of the ada. we are hotelers, we're in the business of hospitality, the crux of our industry is to provide welcoming, comfortable and enjoyable environment for all of our guests. i ask you to consider my story when evaluating hr 3765 please help protect small business owners like myself who want to run our business free from the fears that the next envelope we open might be a lawsuit that closes the doors to our hotel.
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thank you. >> thank you, ms. shaw. i will now recognize our third witness, mr. burkeland. is that microphone close to you and on, sir? >> can you hear me, mr. chairman? >> yes, sir. >> mr. chairman, ranking member conyers and members of the subcommittee, my name is kelly burkeland i'm the executive director of national council. oldest cross disability national organization by people with disabilities we go by nickel. nickel membership includes people with disabilities centered for independent living, statewide independent living counsels and other disabilities rights organizations. it advances the independent living and rights of people with disabilities and we envision a
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world in which people of disabilities are valued deeply and participated fully. it addressed discrimination and barriers that exist through the society throughadvocacy. these barriers are sometimes architectural, but more often reflect attitudes and principles that have been reinforced for generations. they have deterred people with disabilities from working, leaving many in poverty and unjustly detained in institutions. as my own life experience has proven, with increased opportunities, individuals with disabilities can claim their civil rights and participate in their communities in the same way that people without disabilities do. i broke my neck in a diving accident on july 26th, 1970. i have used a wheelchair ever since. coincidentally, the americans with disabilities act was signed in to law on july 26, 1990, by president george h.w. bush. exactly 20 years to the day
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after i got my disability. therefore, i had 20 years of experience living with a disability prior to the americans with disabilities act. and now i have 26 years of experience living with a disability post ada. fortunately, the ada has literally changed the face of the globe. although i'm honored to be here, i am here to testify in opposition to the so-called ada notification bills. as congressman sensenbrenner and conyers know, the original amendments passed and signed in to law passed because people with disabilities, bipartisan lawmakers and businesses worked together. the various efforts to make it harder to bring a title 3 lawsuit have never followed the same process and never enjoyed support from people with disabilities or the organizations that support them or the organizations that represent them. people with disabilities don't
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want more lawsuits. we want more accessibility. adding a notification requirement won't make the multiple lawsuit phenomena go away. it simply sends the message to business owners that they don't have to worry about complying with the ada until they get a letter. in most parts of this country, it is very difficult to find a lawyer who is interested in bringing an ada complaint against a place of public accommodation because they can't collect damages. when the ada was enacted as a compromise between the disability and business community, the disability community gave up the ability to obtain damages under title 3 of the ada by allowing injunctive relief and attorneys' fees. unfortunately, there are still businesses and companies who have yet to comply with this important civil rights law, even after 26 years. the problem here that these bills are trying to address have little to do, if anything, with the ada. title 3, again, does not provide
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for damages. settlements or court orders only can involve attorneys' fees. and in the states that some of the witnesses are from, those state statutes, like california, which has been mentioned, allow the people to get damages. that's why california changed its law. damages aren't allowed in the ada. there's no need to change the americans with disabilities act. there is lots of information out there. there is lots of technical assistance people can get on how to comply with the law. there is even a phone line you can call in to get information, and there is a website. there's lots of free technical assistance to businesses who actually want to comply with the law. the ada does not require businesses to do anything that would be considered an undue burden, which means that it's not readily achievable -- or i mean, it is readily achievable and it can be accomplished without much difficulty or
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expense. and i just want to say, some of the stuff that's been -- i'm going to not go through the rest of my written testimony -- but some of the stuff that's been talked about around building stuff and people need to be in compliance, the state that i hail from, idaho, we changed the building code in the state so that when people do get a building permit, their building's going to be built according to the americans with disabilities act. and the act really gives people ranges that they have to put stuff into. like for instance, she can fit under this table, i can't. that's why the act allows for ranges, instead of exact numbers that have to be met. so with that, mr. chairman, i know my time is running out, but just in closing, i would like to recognize yoshiko dart, the wife of mr. justin dart, who is known as the father of the ada in the building. with that, mr. chairman, thank you very much. >> and thank you, mr. buckland,
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and welcome. i will now recognize our fourth and final witness, mr. weiss. sir, is that microphone on or close? >> yes. can you hear me? >> all right. yes, sir. >> good morning, mr. chairman, ranking member kohn, mr. conyers and members of the subcommittee. i'm david weiss with ddr corps, executive counsel. i've been in practice for 33 years and general counsel since 2003. ddr is a new york stock exchange-traded real estate investment trust. we own over 350 properties around the country and puerto rico and have over 113 million square feet. our tenants are some of the most recognizable national, regional and local retailers. i'm here to testify today on behalf of the international council of shopping centers or icsc, the global trade association for the shopping center industry with over 70,000 members and over 100 countries, they represent a wide variety of
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owners, managers and other professionals related to real estate. first and foremost, let me say that the icsc vigorously supports both the letter and the intent of the ada. we recognize and applaud the positive impact that the ada has had on our society. we also support hr-3765 introduced by congressman poe and co-sponsored by congressman peterson as ways to strengthen accessibility, the primary goal of the ada. frankly, i think the legislation that we're talking about today is misunderstood. there's actually quite a bit of agreement related to the legislation. as mr. buckland noted, people with disabilities don't want more lawsuits. they want more accessibility. frankly, we couldn't agree more. we all share the goal of more accessibility. we want full compliance, we want it faster with less cost, and we want more resources, not less, devoted to improving accessibility.
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as an industry, our interests are aligned with the goals of the ada. first of all and foremost, it's the right thing to do. many of us have experienced the challenges faced by family and friends who are disabled. second, it's in our economic best interests to do so. there's a fundamental misunderstanding and misconception that businesses don't support or want to comply with the ada. let me be very clear -- more people visiting our shopping centers and properties is a good thing. we work with our tenants exhaustively to find ways to encourage more, not less, people to come to our properties, and we spend millions of dollars each year to accomplish this. let me be clear again on an area where i think there is also agreement, and that relates to the bad apples. for those persons who flaunt the ada, they deserve the full weight of enforcement. if they choose to ignore compliance and a lawsuit and the threat of attorneys' fees is the only way to force compliance,
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then so be it. but on the other hand, if a simple notice is the fastest and cheapest way to solve many unintended and often minor areas of noncompliance, why would we not encourage that? unfortunately, not everyone agrees with mr. buckland. lawsuits by a small group of lawyers have skyrocketed. 63% increase from 2013 to 2014, over 4,700 lawsuits filed in 2015. unfortunately, there are some whose interests are not aligned with the ada. these attorneys take a different approach. they file first, ask questions later. they sue, settle and move on. their interest is not in actually improving the accessibility, but rather, only in earning attorneys' fees. many never visit the property, can't tell you what violations may be there and never bother to confirm whether any alleged violations have been resolved. so, why do we support this
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legislation? because it gives the good apples a 60-day window to respond to claims without an immediate lawsuit. it gives 120 days for the opportunity to cure any potential violations. i think we can all agree that this is the fastest, most efficient and most cost-effective way to achieve compliance. and secondly, let's not forget it also enhances education and training and encourages the use of alternative dispute resolution to actually speed up enforcement. and then let's also be clear about what this legislation does not do -- it does not stop the right to sue for noncompliance. it does not limit the ability to recover attorneys' fees. it does not change the department of justice enforcement rights. it does not change state laws. what it will do is encourage compliance and stop the unfortunate abusive tactics of a few. with that, i thank you for this opportunity to testify today and i look forward to answering any
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questions that you might have. >> thank you, mr. weiss. and thank you all for your testimony. we'll now proceed under the five-minute rule with questions. i'll begin by recognizing myself for five minutes. and ms. ky, if it's all right, i'll begin with you. mr. poe's bill requires a plaintiff to give a business owner notice of an alleged ada violation and the opportunity to fix that violation before a lawsuit may be filed. as a business owner, as someone disabled, do you believe it's fair to the disabled to require notice and an opportunity to fix a violation before a lawsuit can be filed? >> it's fair to insert issue that's itemized. the reason -- i believe it is fair because there's so many new update law regulation that all of you had written to, for example, for my mom's shop.
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there was seven items unnecessarily. it was a sticker note, a violation for the exit sign, an incorrect symbol of the restroom, the doorknobs, the mat. that is simple. i was not aware of the new regulation. so if you all that making changes, let us know, and this would not happen. if the community, if the citizen knows, this would not happen. i would like to say something. i don't think your building here is accessible. i went to the women's restroom. it's not accessible. and you guys create and make the laws and your building's not accessible. so how do you expect a normal citizen to follow your rules if you're not doing it yourself? >> thank you, ms. ky.
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ms. shah, critics of legislative efforts to allow for a cure period prior to commencing a lawsuit under title 3 of the ada have argued that the property owners have a legal obligation to ensure their property's accessible to the disabled. these critics argue that a notice and cure legislation would create a further incentive for property owners not to comply with ada until they're sued. how would you respond to that criticism? >> thank you, mr. chairman. you know, i respond to the critics by saying that the fact that they're having an issue with the grace period to begin with shows and implies that they're not here to promote accessibility. all of us here in this room support the ada, support americans with disabilities. we promote it. we think it's great for america. in fact, we want to fix any issues, because ultimately, that attracts customers to our business and we want to grow our business. so we're automatically incentivized. so a notice and cure provision would help us fix any areas of
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concern and promote the accessibility, versus just the attorneys filing lawsuits immediately to get attorneys' fees. >> thank you, ms. shah. mr. weiss, has there been an increase in ada litigation under title 3? and if so, could you provide the committee with some background on that increase in? >> yes, i'd be happy to. yes, the number of cases has grown dramatically over the last few years. frankly, that's really the driving need for this legislation. this is both a growing and expanding problem, and actually just continues to grow. as i mentioned in my opening remarks, there's been a 65% increase from 2013 to 2014, and the numbers just continue to grow and grow. in particular, there are certain states where these cases are growing the fastest -- california, florida, new york,
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texas, arizona. those combined had the largest number of suits filed, over 80% of them filed nationwide. california has approximately 40% of the lawsuits, but only, frankly, about 12% of the disabled population there. so this is an ongoing and continuing problem. >> well, thank you, sir. and i will now recognize the ranking member, mr. cohen, for five minutes. >> thank you, sir. mr. weiss, is the fact that california's got their state law, and i think i heard that it includes damages. could that not be the reason why there's so many of those cases in california? >> no, i don't think so. obviously -- the ada's been in effect for 25 years. i think we all would agree it's had a dramatic impact across the country, so much so that it is just a part of the way of doing
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business. in our industry, it becomes second nature. we're constantly updating our properties and ensuring compliance with them. the issues that we're having here are very specific, and this legislation was intended to be -- >> let me ask you -- we have limited time -- why do you think california is particularly litigio litigious? that's the question. >> i can't tell you exactly why some states over others, but i can just tell you that it's growing nationwide. those happen to be where the most -- >> specifically, you mentioned texas, arizona, california and florida. there's got to be some -- aren't those the states you mentioned? >> that's where there are the most cases, but there are cases across the country. >> i'm hip to that. >> many states without -- >> but there's got to be a reason why those 4 are more than the other 46. you don't have a thought. mr. buckland, do you have a thought? >> mr. cohen, i do. those are the states that allow
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damages. >> all four of those states allow damages? >> yeah. >> how many other states allow damages, do you know? >> there's about ten in total. >> if there's ten total and these are four of them, that seems like what they've got in common, and that's not a national problem. seems like it's not -- ms. shah, you grasp that, do you not? >> pardon? >> you grasp the fact that those four states are four of ten and that that might be the unifying or unique factor that causes the lawsuits there and not something with the ada in general? >> sure, but it's prevalent across the united states. you know, there are properties -- my property's in georgia, and the same attorney and the same plaintiff have filed the same lawsuit 100 times. >> in georgia? is it a georgia lawyer? >> correct, yes. >> let me ask you this, you heard what i was saying in my opening remarks about the possibility of having some type of damages for the folks that don't comply if there was a notice provision. would you agree that there needs to be some type of a stick to
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punish harshly with some sanctions the folks that don't comply within the 120-day period? >> yes. the whole idea is that you would be able to file the lawsuit. the first -- >> but that's already available. >> right. >> shouldn't there be something extra? >> such as what? >> such as sanctions, damages, liquidated damages, some amount of -- >> yeah. i mean, exactly. you can uphold that and impose sanctions. but remember, at the same time, we're also trying to run our business, and so, we're doing the best we can -- >> but you're a good guy. i'm talking about the bad guys. >> of course, the bad guys do need sanctions. >> right. so, you would agree that -- mr. weiss, would you agree that that would be something that would make your proposal better? >> well, frankly -- let me start on this damages issue, which you've raised before. first of all, this -- we are not talking about making changes, fundamental underlying changes to the ada. we are talking about legislation which is narrow and focused, particular abuse for an existing enforcement mechanism.
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secondly, i'm not sure that damages actually will reduce the problem. in fact, it may well encourage them. more damages means more lawsuits. more lawsuits means more attorneys' fees, it means more time and resources on lawyers rather than what we're trying to -- >> damages are only for the people who don't comply with this program. your program does have a lot of beneficial purposes, yours or ted's or whoever's it is. i can see the benefit of getting compliance, but for the folks who don't comply, why not -- the damages isn't going to be a problem for the good guys. it's only going to be for the bad guys. and bad guys always have to be punished. >> i think your underlying assumption is this is only a damages issue. take florida, for instance -- >> no, i'm not saying it's only a damages issue. it's probably a damages issue because of where the litigation has exploded, but i'm talking about damages is a way to have another lever out there to make people comply. all you've got is the notice.
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what you make is it harder to bring a lawsuit and disincentivized lawyers from being involved in the process, which will probably result in less notice of actual problems. so if you're going to do that, do something that doesn't -- you know, you don't want to have overkill and help the good guys at ddr but not the bad guys at eeq. >> with all due respect, mr. cohen, i don't think this inhibits the enforcement of the ada. i think it actually helps enforcement. and here's why -- >> mr. buckland, why -- do you think it inhibits people? >> absolutely. there's no other civil rights statute that requires notice to be able to fix the problem before you can bring a suit. no other civil rights, but they're wanting to put it in this one. it absolutely -- i'll give you a couple of examples. like, i was in virginia beach. there's a timeshare down there. and if we sat through, like i'm
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sure a lot of you are experienced, if you sit through a presentation, they give you some reward, right? so, the reward was to be able to go on this whale-watching tour. so, we sat through the presentation -- me, my wife and my son sat through the presentation. they gave us our whale-watching tickets. and by the way, none of the timeshares -- i couldn't have purchased any of the timeshares because they're all inaccessible. not a single timeshare didn't have a step in front of it. so, they're all inaccessible. so then we go to the whale-watching tour, and they tell me they don't take people in wheelchairs on their tours. so i talked to the guy that took the tickets and said, are you aware of the americans with disabilities act? he said, "yes, that doesn't apply to us." i said where's the manager? can i speak to the manager? "i'm the manager." i said, you still don't think the ada applies to you? and he said no. so, when i got back home, i
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talked to the department of justice, and we went in to where you work it out between you. we did that. they with very little expense built a ramp to the boat. now they take people with disabilities on their whale-watching tour. another one that just happened very recently is there's a business association here in washington, d.c., that i went to, could not get in. the front entrance is not accessible. couldn't independently enter the building either. i told them all of that. i gave them resources to get information on what the fixes were. i checked back with them about 2 1/2 months later to see if they had made any progress on making their building accessible. i got no response. so i waited for about another two weeks, sent them another e-mail asking if they had made any progress. no response. i did that three times with no
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response. so then i made a phone call. they weren't in, so i left a message. no response to my phone call. frankly, that is most of the responses you get from -- when you notify people that there's a problem, you don't get any return response. that's what's happened to me over and over. it's what happened -- >> thank you, sir. i appreciate it. my time's out. >> i will now recognize the gentleman from iowa, mr. king for five minutes. >> i thank mr. chairman and i thank the witnesses for your testimony here today. i'm just thinking about how the americans with disabilities act in a way changed my life, and i want to put this narrative into the record. i happen to have been the only public building in the community that was wheelchair accessible right after the passage of the ada. and so, they came and asked me, would you be the host of the republican caucus in your community? and i said, sure, i'm happy to open up my doors and help people out. and then i became the chairman
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of that caucus and now here i am in congress. so i just put that in as, i don't know how many different implications there are. i'm sure it's affected your lives a lot more than it's affected mine, but it's ironic that had that meeting not taken place, who knows what i'd be doing today. so i wanted to ask you, i wanted to ask especially mr. buckland, and i'd ask if you could be brief in your analysis of this. but you lived through 20 years prior to the ada in a wheelchair and 26 years afterwards and you probably didn't see the immediate results of that because we had a lot of new construction that took place and refurbishing that took place. so i don't have any doubt that it's changed a lot of accessibility. you've seen it incrementally from your eyes. the question back then in 1990 was do we require compliance with the ada only on new construction or also for existing buildings and
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facilities? and i recall going in and making curb cuts and making wheelchair accessible, and i'm wondering why didn't we think of that when we built the sidewalk in the first place. it was really a huge oversight on the part of our society not to see how simple and how cheap that part of the ada could have been. but what would it be like today, do you think, if the ada had been written in such a way that new construction complied, but old construction was voluntary? what kind of progress do you think we would have made in the last 26 years? >> mr. chairman, mr. king, very little. i mean, if you walk around this town, most of this is old construction. so if we hadn't applied the ada to existing structures, nothing here would be -- or not nothing, but a lot of the buildings here wouldn't be required to comply. >> okay. so do you think -- and these buildings especially have got some of the oldest buildings
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here. in my neighborhood, it would be different for different reasons. we have a lot of new sidewalks and a lot of new curb cuts would have been done. but i just want to ask you in your perspective, and you've given it to me, and i appreciate it. i'd like to turn to ms. shah. and you mentioned that there are essentially a copy-and-paste 100 lawsuits from a single lawyer, and those lawyers in many cases -- it's either you or ms. ky that said that the lawyers had not been in the facility. so i'll ask each of you, but first to ms. shah. what does that list of plaintiffs look like when you've got a lawyer with 100 suits that are copied and pasted? what's the list of the plaintiffs look like on each of those suits? >> in my case, it's just one plaintiff. and so, he's using -- the attorney's using that one plaintiff to phish out other properties in the area and slap the same lawsuit on them. >> and have you looked at the plaintiffs in those other
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lawsuits that were filed by the same attorney? could it be the same plaintiff in some of those cases or even all of them? >> absolutely. in this case, it is the same. i mentioned that my father received the same lawsuit, same number of pages, same attorney, same plaintiff at his property. >> okay, but there are 98 others out there. what's the likelihood that that same plaintiff has also been utilized by the same attorney in a number of other cases in addition to you and your father? >> there is a likelihood that there is the same plaintiff, same attorney. there is also other plaintiffs and other attorneys. so it's an ongoing case, right? i mean, you can have one plaintiff suing 100 properties using the same attorney, and that same attorney may want to settle 100 properties, and you average $5,000. that's a lot of money. >> okay. so, i'm just trying to get this concept of how this works in the attorney's office. you have an attorney that is a hotel-chasing attorney, and he decides i've got a potential plaintiff here. i'm going to contact him and the two of us can go together. and now we'll file, potentially, 100 lawsuits, and you be the
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plaintiff, i'll be the attorney, and we'll collect this money at the expense of the businesses that never had a chance of a notice to cure, never had an opportunity to even know they were potentially out of compliance with the ada. so i just -- i look at that and have these plaintiffs, then -- what's the likelihood that the plaintiff had never been in the building before the suit was filed? >> i think each case varies. in my case, i looked back one year to check the reservations, first name and last name ever matched, and there was no record of that person ever staying at our hotel. >> ms. ky? >> yes. >> would you concur with the testimony of ms. shah in your experience? >> yes. on that particular day, this individual sued three locations in our city, same person. and he does not live in the city. at that particular day, i was not at the shop. i came back from doing my errands and i got a package, and i asked everybody, who is this person?
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no one knew who he was. i even asked the medical facility that does provide wheelchairs, just to make sure if he's, you know, in the register with them or buy anything from them. they don't even know who he is. and recently, they did kind of investigate on this individual. he is an able-body. he sit in the wheelchair, he goes to places and he uses wheelchairs to get what he does, and he lift this wheelchair and put back in his truck. he has no -- >> isn't that fraud? wouldn't you say that is fraud? >> that is fraud. and that's why we're here is we need to stop this. we need to stop this fraud. we need to stop this ridiculous using ada to get what they want. like you know, mr. buckland say, that this facility he contact three times and they no respond. please, go sue them. whatever that need to be done,
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yes. but you know, give us a chance. like myself or ms. shah, that we don't have any barriers in our facility, no barriers. just because we don't have the information that you folks changes. the lawyer has no rights. there is no barriers. if there was barriers, please come after us. we have no problem. >> thank you very much. i thank the witnesses and yield back. >> thank you. i would now recognize the ranking member, mr. conyers, for five minutes. >> thank you, chairman franks, and i thank the witnesses. could i begin by asking unanimous consent to enter into the record 14 letters from organizations that have a variety of objections to the measure that we are examining tod today, the consortium for
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citizens with disabilities, paralyzed veterans of america, the leadership conference on civil and human rights and plenty of others. could i ask unanimous consent? they take strong exception to this measure, and i ask that these letters be included in the record. >> without objection. >> thank you, mr. chairman. i wanted to just ask mr. buckland if -- we're all friends here -- if mr. weiss' testimony raised any objections in terms of your experience as someone that's disabled? >> well, mr. chairman, mr. conyers, i mean, the whole issue
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around the written notice and you have to wait a certain time for to cure, all that stuff. like i said in my testimony, i think that will incentivize businesses to not do anything until they do get a letter. so yeah, i take exception to that. i also think that like just naming the number of lawsuits doesn't mean that's a bad thing. if those businesses were out of compliance, then why is that a problem that they got sued for being -- for breaking the law? i don't quite understand that. so there was no mention about whether or not they were valid complaints. they were just the numbers. so i'm not sure that this results in being a bad thing. >> would it be helpful if the committee knew what the results of all those lawsuits were? >> yes, i think it would. and then i also think that the department of justice could provide this committee with some
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information about how many complaints they've received, what the complaints were about, how the complaints were resolved, that sort of stuff. >> mr. chairman, i'm hoping that we might be able to follow through on both my suggestion and mr. buckland's in terms of getting a little bit more detail on some of these cases. now, mr. buckland, we have four witnesses here this morning. you're the only one that is opposed to this measure. so i wanted to ask you, what does the presuit notification mean for the private enforcement of the ada, and that would happen if enforcement is left only to the attorney general if
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private lawyers stop bringing cases? >> well, i think you stated the obvious. what would happen if our ability to file suit is impeded, then we have less enforcement. and like i mentioned before, the businesses will just wait until they get a letter. our experience really has been, as i mentioned, it's difficult to find attorneys that will take cases, except for those states that allow damages. and so, i think this is really more of a state legislation issue than it is with the americans with disabilities act. >> yes. i do, too. proponents now of presuit notification argue that it's reasonable to give businesses the opportunity to cure a violation before a lawsuit
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commences. but how might such a notification scheme affect voluntary compliance? >> well, again, it would impede our ability to make our businesses compliant because you'd have the waiting period, the notification. it would disincentivize attorneys. but i want to ask the opposite question -- why do they need to be notified? the americans with disabilities act is out there. there's lots of information about how you comply. i mentioned that before. there's ten ada centers, one in each region of the country, and they have expertise on the americans with disabilities act, what it requires to comply. they can come out to your business and talk to you about what you need to do. so they should be proactive and they should be -- they know the law's there. they should get the technical assistance. they should come into compliance. >> i think that's a very good response, and you've answered all my questions very appropriately, and mr. chairman,
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i yield back the balance of my time. >> i thank the gentleman and now recognize the gentleman from florida, mr. deutsch for five minutes. >> thank you, mr. chairman. and thank you for holding this hearing. the americans with disabilities act fundamentally changed our society for the better. it both literally and figuratively opened the doors of public life that had been closed for on too long. and i believe that any efforts that we undertake to address abuses under the current law have to protect the progress that's been made and we have to continue to ensure that our society is open to everyone. the goal that we all share is widespread compliance, full compliance with the ada. retrofitting all their construction, assuring all con construction is exclusive from the start has always been the guiding principle. i appreciate that the original compromise that created the ada was designed to balance our national interests in accessibility with the desire to make private businesses allies in this endeavor, rather than our adversaries.
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and i don't want to upset the original balance that makes it -- that in any way would make it harder to work together toward our common goal of compliance. but i believe that we have to exercise strict oversight to ensure that we're achieving continued progress to accessibility. that's what the ada is meant to provide. and if abuses of the process work against those goals, then i think it requires us to stop and pay attention. in florida, which we talked about earlier, in my own state, more than one in five ada claims filed last year originated in the southern district of florida. businesses have to -- have to retain the right to do the right thing, and there has to be an incentive for them to do the right thing. the threat of a lawsuit is powerful, and it works. but for honest, good-faith actors who are making easily correctible, small fixes, things that would take a few minutes to remedy, we have to have a process that allows them to make these fixes, to adjust a grab
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bar, to rehang a coat hook, and to be able to do it quickly without a lawsuit. i don't take the idea of good faith lightly. it should be difficult, a difficult standard to meet. it should show that businesses are in partnership with the american people in create a society that is accessible and is welcoming to everyone, that public life is for everyone, and we want a society where small businesses can thrive doing business with everyone. now, mr. weiss, i've been told that some of the worst of the repeat plaintiffs don't even bother to follow up to see if the infractions have been corrected, which tells me that complaints often are about, more about extracting money than about making a facility more accessible. the code enforcement officer in delray beach, in my own part of south florida, was quoted as saying, "they don't care if you fix it or not. the businesses pay between $5,000 and $12,000, and it goes
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away. people are taking complete advantage. it's a money-maker. it has nothing to do with compliance." in your experience, what's been the follow-through of plaintiffs post settlement? turn the mike? >> i'm sorry to say it's virtually none. and that's part of the problem. we spend millions of dollars ensuring our properties are code-compliant and compliant with the ada, and we have millions of dollars invested, and then we have attorneys essentially that come to us with their hand out, not knowing, with vague claims of noncompliance. they don't have specifics. and they never bother to follow up, as long as you have paid to settle the suit. as a follow-up, i guess i would just mention, both in your district, mr. deutch, this has become -- this is not just the icsc issue. there are press reports. there was one, in fact, this week of a serial plaintiff filing 1,000 lawsuits.
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in response to mr. cohen's reference to lawsuits in california, california has actually passed two pieces of legislation to actually try to curb the abuse of these lawyers, even with the damages provision that he thinks will actually help. there are abuses going on. and so, california's passed legislation as well to try to limit the abuses that are occurring there. >> okay. mr. buckland, isn't there a difference between a business owner who refuses to include a required number of handicapped spaces or who refuses to make their restrooms accessible and a business owner who runs a business who has followed all of the technical assistance as best as he or she could and the grab bar is two inches too high or the paper towel holder is a
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couple of inches off, or the line on the handicapped parking space that is there is drawn slightly crooked? there's a difference between them, isn't there? and shouldn't we incentivize -- don't we want the people in -- the bad actors to actually have to do what's necessary? and lawsuits absolutely are required to get them to do it, but shouldn't we require or give an opportunity to the small business owner who used all good faith to comply with the law the opportunity to fix something when it might take five minutes to fix instead of making them pay $10,000 or $12,000 when a lawsuit is filed? >> mr. chairman, mr. deutch, with all due respect, if there's only if the only issue is the grab bar is two inches off, the business fixes that, there's no -- unless you're in a state
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with damages, there is no money paid out. you would only collect -- >> one second. i just want to correct that. and maybe i misunderstand, but the stories i've heard from the businesses in my district, where in south florida, where one in five of these cases are filed, the story i heard from the guy who runs the bagel shop i stop in in the morning, who just shared another one of these stories with me, that he got hit with a lawsuit for one of these very minor mistakes. he's used all good faith to try to comply, and you're right, he's going to raise it by those couple of inches, and it's going to cost him $10,000 in plaintiff's legal fees, which is a cost that he never should have had to incur. >> well, i'm sorry. unless he's like somehow fought against the original complaint, why would there be attorneys'
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fees? >> mr. weiss, can you answer that question? >> the answer is because the suit's filed before the business owner even knows what the issue is. so to get rid of that lawsuit, you need -- you end up settling it. >> right. and all i'm trying -- i'm not -- i think the chairman understands this and the ranking member of the committee understands, there's no one on this committee who fights harder to keep the courtroom doors open for people who deserve justice in this country than i do. >> believe me, he's telling the truth. >> but in this situation, all i think we're looking for is the opportunity for someone, for a small business owner to be able to -- who's exercised all good faith and has only tried to do the right thing to be able to continue to do the right thing without being forced to pay an extravagant amount of money. give them the opportunity to fix it, and they will. i really appreciate the panel for being here. i think it's a really important discussion. mr. chairman, i yield back. >> and i thank the gentleman.
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and this concludes today's hearing. and without objection, all members will have five legislative days to submit additional written questions for the witnesses or additional materials for the record. and i want to thank the witnesses and thank the members and thank the audience for being here. and this hearing is adjourned.
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donald trump holds a fund-raiser this evening with new jersey governor chris christie. it's at the national guard armory in lawrenceville, new jersey. we'll hear from governor christie and the presumptive gop nominee. that's live on our companion network c-span at 7:00 p.m. eastern. and sunday night on c-span, the state opening of the british parliament. queen elizabeth delivered a speech this week on the british government's priorities for the coming year. and sunday night at 9:00 p.m. eastern, we'll show you bbc parliament's coverage of the state opening of parliament. this weekend on "c-span cities tour," along with our comcast cable partners, we'll explore the history and literary
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life of hattiesburg, mississippi. on "booktv," "don't hurry me down to hades: the civil war and the words of those who lived it." it draws on rare letters and diary entries to tell the story of the civil war through the eyes of both the soldiers and their families and how important keeping in touch was for those on the battlefield and their family members back home. >> because so many women were writing to their men at the front, saying, i don't know exactly what you're fighting for, but you need to come home because we've got about a fifth of the crop that we normally do. i just buried our youngest in the back. and we're not going to have anything left, you know. you need to come home. >> and we'll examine the vietnam war in the 1967 experiences of charlie company with author andrew weast, discussing the battlefields of vietnam and what soldiers had to fight upon their return to the united states. >> vietnam veterans have been used as political foobltballs, they've been used as a part of a morality play, for many things,
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but hardly anybody had got to tell their story, who they were as young men before they went, the trauma of war that they went through, both its great victories, its funny times, its horrible times, and then what happened to them as a generation since they've been home. >> and on american history tv, the 1966 slaying of civil rights activist vernon dahmer at the hands of the ku klux klan, told by widow ellie and his eldest son, vernon dahmer jr. >> for what reason did anybody want to come and kill my dad? they came as a result of the orders from the head of the klan. said go annihilate them. and they came to kill the whole family. >> and learn about the freedom summer school program during the summer of 1964, when volunteers from around the country taught african-americans in mississippi methods of nonviolent resistance and encouraged voter registration. >> there were meetings held
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throughout the city in various churches preparing the residents and informing them of their political rights and getting ready to register to vote. >> this weekend, watch c-span's cities tour to hattiesburg, mississippi, saturday at 6:00 p.m. eastern on c-span2's booktv, and sunday afternoon at 2:00 on american history tv on c-span3. and now a senate commerce committee hearing on the do-not-call list, a national registry of phone numbers people have requested not to receive telemarketing calls. the committee also looked at the 1991 law that bans automatic dialing or robocalls on telephone solicitations.
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this hearing will get under way. my apologies for being tardy. running around a lot today already, but thank you all for your patience and welcome to today's hearing on the telephone consumer protection act. when passing tcpa nearly 25 years ago, congress expressly sought a balanced approach that protects the privacy of individuals and permits
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legitimate telemarketing practices. as a result of tcpa, a number of abusive and disruptive telemarketing practices have been significantly reduced or eliminated. for example, companies have to maintain do-not-call lists and cannot make solicitation calls before 8:00 a.m. or after 9:00 p.m. but tcpa is also showing its age, and there are opportunities to build on its consumer benefits while also ensuring consumers fully benefit from modern communications. consumers should be able to take advantage of new technologies that help them avoid falling victim to unscrupulous actors and those callers who ignore do-not-call requirements. i doubt there's a person in this room who's not received a recorded voice on their mobile phone telling them that they've won a cruise. we should also ensure that the fcc continues to take action against abusive and harassing practices and has the tools it needs to bring bad actors to justice, including those operating from overseas. we recently took a step in this direction by unanimously approving ranking member nelson and senator fischer's antispoofing legislation as part
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of the fcc reauthorization act, but our discussion today is not only about policing abusive and harassing practices and stopping bad actors. we must also acknowledge that most businesses are trying to do the right thing and play by the rules, and we need to understand whether tcp sank inadvertently hurting the good actors and consumers. when congress passed tcpa, cell phones were uncommon and mobile phone services extremely expensive. it made sense to have particularly strict rules about contacting people on their mobile phones. today, however, mobile phones are not only ubiquitous, they're actually smart devices that do much more than just send and receive phone calls. consumer behavior is also far different than 2 t was in 1991. today, consumer expectations about communications connectivity and better contact with their doctors, schools, favorite charities, and yes, even their lenders, would be unrecognizable to congress 25 years ago. more than 90% of americans now have a mobile phone, and nearly half of all households in the
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united states are mobile only. these percentages are even higher for young adults. simply put, if you can't reach these people on their mobile phones, you're going to have a hard time reaching them at all. the balance forged decades ago may now be missing the mark and consumers may be missing the benefit of otherwise reasonable practices. we were tasked with ensuring a balanced application of tcpa. the commission, however, has struggled to apply it to a changing communications marketplace and the agency actually seems to be creating more imbalances and more uncertainty. the commission's rules have created new questions rather than answers. for example, what is an autodialer? the commission will not answer that clearly, and instead only says it's something other than a rotary dial telephone. the fcc declared last year that it would not address the exact contours of the auto dialer definition or seek to determine comprehensively each type of equipment that falls within that
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definition. hospitals, charities, utilities, banks and restaurants should not have to engage engineers and telecommunications attorneys in order to know if they can call their customers without being sued. another example is what to do if a customer's number has been reassigned. while the fcc claims to have addressed this issue, companies say there is still no way to know with certainty. what is certain, however, is that if a phone number has been reassigned and you call it more than once, you could be liable for $500 per call, even if the new party never answers. tcpa litigation has also become a booming business. tcpa cases are the second most filled type of case in federal courts with 3,710 filed last year alone. that represents a 45% increase over 2014. and the companies affected by an unbalanced tcpa may surprise you. for example, twitter stated the following in a filing at the fcc, and i quote -- "as the result of this hyperlit yijs
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environment, innovative companies must increasingly choose between denying information customers requested by tcpa attorneys filing shakedown suits. no company should be put to such a choice." the cost of getting the balance wrong isn't just burdensome litigation. it is also the cost to consumers and to the economy while the important consumer contact that is not being made for fear of running afoul of an ill-defined rule. text messages to let parents know about weather-related cancellatio cancellations, calls to struggling low-income households know how to keep the heat from getting cut off, calls to alert borrowers that they're at risk of defaulting on their debts and ruining their credit ratings, and follow-up calls to patients to make sure they understand their post discharge treatment plans. another specific matter that will be discussed today is the obama administration's carveout to allow robocalls to mobile phones to collect debts owed to or guaranteed by the federal
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government. the administration used last year's must-pass, bipartisan budget act as a vehicle to achieve its robocall carveout. the committee reached out to the office of management and budget, the department of the treasury, and the department of education to testify about why the administration's prioritized this robocall carveout for years. unfortunately, the obama administration is not represented before us today, but we will continue to seek its input as its robocall carveout is implemented by the fcc and as the committee continues its oversight of tcpa. ultimately, finding the right balance is essential to protecting the privacy of consumers while making sure that they have reasonable access to the information they want and need and making sure good-faith business actors can reasonably assess the cost of doing business. we have a variety of perspectives represented on the panel before us today, and i look forward to hearing your testimony and appreciate very much your participation with us. thank you. i'll recognize the senator from florida, our ranking member, senator nelson. >> mr. chairman, if you go
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anywhere in this country and you ask a consumer, do you want to receive robocalls or you ask them would you like to receive robocalls on your cell phone, you may get the cell phone thrown at you. and there are few things that unite our country men and women like the distaste for robocalls that are interrupting them at dinner time, in the middle of driving. i mean, it goes on and on. it's a sentiment that nearly all of us share, and that's why for the last 25 years the laws have sided with consumers. the number of consumer complaints about robocalls,
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regardless of the laws, continue to increase. the fcc receives tens of thousands of robocall complaints every month. every month. and we all have stories to tell. one of our friends signed up for a line service one morning. and by the afternoon, before he had given his new number to his family and friends, his phone was being flooded by robo calls. so he gave up the land line. in fact, how many of us know friends at home that have given up the landline and just used the cell phone for that exact same reason. they don't want the robo calls. most of us, our cell phone is our life line. if we allow those annoying robo
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calls to begin freely bumbarding folks where do consumers go to escape the harassment. so what would happen on mobile phones is that they would start to ignore the calls from unknown numbers so they don't have to hear another recording. only to miss an important call. or what about the senior citizens and how about low income americans, many of those consumers have calling plans that are restricted in the number of minutes that they can use every month. so opening the flood gates to robo calls to those individuals would have an immediate adverse effect.
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or what about driving down the road. just like i was this morning, dodging in and out of traffic. coming across the 395 bridge. people cutting in front of me and me having to slam on the brakes. and suddenly you get a call and you want to answer it, but it's not something important. it's a robo call. and, therefore, the distracted driving. where would all of that end? so, you know, the frustration is there. also because of fraudulent callers. scammers are always going to be a problem. we have tried to address that directly on in a bipartisan way with the chairman. thanks to his leadership. senator fisher and i have teamed
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up on our bill to combat spoofing and that's why i'd also like us to see a revamped improved do not call list. now, obviously, there are legitimate businesses and other reasons to call consumers on their wireless phones. but there's already an answer to that. just get the consumer's consent. that's been the law since 1991. in this bubble of washington, policymakers are often in danger of losing sight to what is actually out there in america. and there's no doubt, ask that question of any american consumer. i want to thank you, mr.
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chairman, for calling this hearing to shed light on the distaste of american consumers about these annoying calls. >> thank you, senator nelson. all right. we'll get underway. we have with us the honorable greg zeller. and ms. barbara wellquist. m margot saunders. and a partner with squire patten bogs law firm. we'll start with mr. zeller, please proceed and welcome to the committee. >> i appreciate the opportunity to come and be heard. i'll pick up with senator nelson left off. we do in the state of indiana
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receive remarkable number of complaints each year. i think last year it was somewhere around 14,000 calls, the largest number of complaints in our consumer protection area. over half of those complaints were about robo calls specifically. indiana has unique statute that was passed in 1988 that prohibits the use of the auto dialers to make calls to consumers. this is across the board. we've successfully defended that statute to the federal courts, the seventh circuit court of appeals talking about how we do not allow these calls for any -- other than those like senator nelson mentioned, have opted in. so the schools and the pharmacies and people you refer to in terms of important calls have opted in and we do have those that are still being heard. but i think the points that i want to make, i've got written
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testimony that i've submitted but i'll kind of summarize briefly. really, the focus of our attention has bee on maintaining the protection of our own statutes. so the recent budget bill you mentioned that had the exception for federal debt, now challenges the ability of our state to defend our own statute. since we did not have any exceptions, we can claim there's no let's say unconstitutional acts on the part of the state, so now that we have this new exception for federal debt, i know the case that's recently filed by the american association of political consultants. challenges the constitutionality and according to our read of the seventh circuit court of appeals and our own defense we've got
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risks now whether that exception might raise the question about whether it's unconstitutionally distinguishing between certain types of calls. we have a blanket exception. it's been very effective. we have been able to defend, but based on the fact we did not have those types of exceptions that now the federal government has allowed. i just briefly i'll say that, you know, in the last month alone, according to you mail, which is a national robo call index. they estimate 2.5 billion robo calls were made in the month of march. the barrage of this. i had to ask my staff whether that was a legitimate number because i couldn't believe it. but unless someone wants to argue the other side, i'll just leave it that that's the only number we've got in terms of the volume of these. we do have a very specific sense of what a robo call, the auto
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dialer is when it can blast out 10,000 calls a minute it's a robo caller. when you say you get a call on a new line, it's not that they actually called you. they called everybody in the area code. so within an hour and a half you can literally call everybody in washington, d.c. we've heard from a number of companies that really need the opportunity to call cell phones. but, again i will side with senator nelson's view that that's the last link in terms of the ability to communicate, since most of us have long since pulled out our land line due to the robo calling abuse. most of it is from overseas, again, not something that either state attorneys general or the federal government can address. frankly, the problems that we have with robo calls, i've warned all the citizens of our state if it's a robo call you
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should assume it's a scam artist. it's the best tool for scam artists. so anytime you see these calls, we've trained the people of indiana hang up as quickly as you can because, frankly, anything you say or do, even just staying on the line, will actually be sold to others. the information that you're going to be home on a wednesday at 10:30 is now known by the people who have done the robo calling and they sell that to others that may want to use other techniques to call you at that same time and place. knowing you'll be home, the likelihood, again, the risk to seniors is where we see this. the use of this technology to collect data when we talk about scam artists you're really talking about the old version of a confidence man. the more they understand about you, the more they can win over your confidence. and knowing when you're going to be home, time, place, and the
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ability to target people with the amount of information. the risk to consumers are not just the harassment. this is the number one tool to gain the information that the scam artists are using to bilk particularly the seniors in our state. i'll finally just say we were very disappointed with the exception that was carved out. without this type of hearing we're having a hearing after the fact of the budget bill which, again, the chairman noticed that it was put in without this kind of attention. i'm representing it now 25 attorneys general who have asked you take up the hang up act. which would take that back out. so why we've made an exception which, again, risks the constitutionality defense, plus you're targeting particularly the younger students who are using their cell phone and now that we've managed to run up a $1.3 trillion of student loan
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debt that will be the number one target. we're worried about where this ends. we're against creating a safe harbor. number of reasons we can go through. but, finally, i would just say that the point that -- for years, 25 years now of having the tcpa, there's always been the opportunity for legitimate businesses to ask people to opt in. we have new programs that you may want to know about. please sign up and we won't harass you. we'll use it very specifically. you can always opt out. but we've never seen anyone really go through this process of asking consumers whether they would like to get a robo call. so, again, without the trial of going through the process of trying to get people's opt in consent, the assumption should be made that people don't want
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this and businesses know that will never get people to sign up for a robo call unless they can argue the case to their own customers. this shouldn't be something that the federal government allows, that the people that you represent have made it clear that they don't want. thank you. >> thank you very much. >> good morning. that was my good mornings. i'm honored to represent the u.s. chamber of commerce and the chamber of institute for legal reform testifying before you today. the context for my knowledge about the tcpa is that for over a decade i've defended various companies sued under the tcpa for variety of communications. so i've been a first hand witness to the growing cottage industry of plaintiffs lawyers who have been targeting american businesses.
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i can confirm in the past few years the problem with tcpa litigation abuse have only worsened. we need your help. over incentified plaintiffs and an anti-business 2015 order from the fcc have led to an explosion of litigation in our country. litigation that is less about protecting consumers and more about driving a multimillion dollar commercial enterprise of tcpa lawsuits. the suits are not about marketing calls and not about the kinds of robo calls we were hearing out. robo calls are the indiscriminate calls trying to get someone to pick up the phones. robo calls are not what my plaintiffs. a customer's credit card payment is rejected. the customer has provided a telephone number as their point of contact to the company. the company then contacts the
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customer, to let them know your credit card has been rejected. if they don't know that. this is trying to provide information to a customer. the biggest drive of litigation now is if that number has been reassigned and the company has no knowledge about the reassignment. who they then send the message to ends up being a new owner. that's what driving a big chunk of litigation now. you now have someone that says i didn't consent to get the call. especially if they don't inform the company the calls can roll in for other reasons. then you now have 40 calls, i want my $20,000. and you get indemathe demand. this is what companies are facing over and over again. the tcpa does not provide for attorney fees. it's clear lawsuits are a lawyer driven business at this point.
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attorneys fees awards are dwarfing what consumers receive. the average attorneys fees awarded was $2.4 million. the average class members award would be $4.12. it's not just large companies who -- small businesses throughout the country are finding themselves brought into court when they had no intention of violating a law. they had no knowledge of the tcpa. i have a client who has six employees. and found me on the internet because i talk about tcpa and took on their case. and if they can't -- they're not sure what to do they're going to have to shutter their business and fire their employees if they can't get past the lawsuit that's being brought on a class action basis by someone who received a call at a reassigned number. small businesses throughout the country, a wide range of
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industries. you have literally thousands of different companies are being sued under the tcpa. social media companies, electric companies, banks, sports teams, pharmacies, family owned plumbing companies. ski resort. accountant. local dentist office. they've found themselves facing lawsuits. and these are not spoofing robo calls. these are legitimate communications that these companies are trying to make. the tcpa is not only a liability trap it's a vicarious liability trap as well. for example, there's companies that make no calls. they have no telemarketing, no interaction with consumers such as manufacturers. and they're finding themselves getting dragged into tcpa litigation on the argument that your product name was mentioned in the spoofed robo call i received. and because your name was mentioned you're on the hook and
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you are responsible. and this is a problem because you have companies with deep pockets now in litigations having to defend themselves on a class action basis. where the statutory damages are so potentially annihilating it forces settlements rather than a defense. i provided examples in my witness statement of some of the litigation abuse such as the pennsylvania woman who subscribes to 35 phones and carries them in a suit case with her. she chooses area codes from florida areas so that they are more likely to have potentially socio economically depressed conditions. she waits for reassigned numbers to come in and brings hundreds of suits. i mentioned the ohio man who was so resistant to putting his number on the do not call list he fought up through the ohio supreme court to be able to keep getting calls because he wanted
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to bring suits under them, didn't want to be on the do not call list. there are a lot of ploiaintiffs making their living now at tcpa plaintiffs. i provided examples of tcpa attorneys who are behind quite a bit of litigation abuse. it's been 25 years since the tcpa was drafted. and the equipment that was focused on was equipment that doesn't even exist anymore. the original intent of the tcpa is something i discuss in part two of my statement. i ask you to review that. to think about the changes that need to made. i make suggestions in part five of my statement. i'm here today to sum up the voice of thousands of businesses. that congress will update the tcpa and alleviate the intolerable and unfair businesses that are being placed on them. >> thank you, ms. saunders?
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>> members of the committee, thank you very much for inviting me to testify today on behalf of the national consumer law center and eight other national groups that collectively represent millions of american consumers. we believe robo calls cause a severe problem. we ask that you defend the tcpa and work to strengthen it. 25 years ago, the tcpa was passed because of the complaints about robo calls which are still pouring in. robo calls cost only a tiny fraction of a penny per call. making it cheaper for businesses to make the calls than to be careful about who they are calling. the tcpa was designed today insure that consumers control who robo calls them on their cell phone, by requiring express
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consent before the calls can be made. unless there is an emergency and many of the examples that senator thune raised were exceptions that were already in the law. the industry is making extravagant claims about spurious lawsuits and wrongful class actions churning new claims litigating tcpa. all to support their insistence that the law be changed. yet the judicial system has a robust mechanism to protect against meritless claims. as tcpa claims don't lead to attorney's fees, the costs of initiating investigating and litigating a lawsuit already restricts these cases, only to those in which numerous illegal calls have been made. in 2015, there were over three and a half million complaints to
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the ftc, far more than any other issue for robo calls. for every 1,000 complaint, only one lawsuit was filed. most consumers who have received unwanted robo calls don't complain to a federal agency. only 1/10 of 1% of those that did complain filed. here are a few of many examples of the cases brought to stop the unwanted barrage of robo calls. yahoo sent 27,000 wrong number text messages to one consumer refusing to stop even after the fcc got involved to ask them to stop. state farm bank made 327 robo calls to one consumer in six months, seeking to collect a debt owed by someone else. time warner cable used an automated system involving zero human capacity to make 153 robo
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calls to a woman who had never been a customer, including 74 calls made after she filed suit. in all of these cases business entities set loose an automated system that called a consumer's phone multiple times, even after the consumers repeat attempts to stop the calls. in each case the caller had decided it was simply more cost effective to ignore the express wishes of these consumers and continue to make these automated calls. 70 million people approximately rely on this country on prepaid or life line cell phones which provide a fixed number of minutes. many of these consumers are low income. and they rely on these limited minutes for essential calls. an unwanted robo call eat into the essential minutes. any one of the industry proposals would lead to the receipt of more unwanted robo
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calls to all cell phone users and would be devastating to these users with limited minutes. for example, the industry argues the fcc's long standing definition of auto dialer is wrong. based on the notion that the current definition covered too many instruments. this making the distinction effectively meaningless. but the definition the industry proposes would exclude all of the technology that's currently being used to make calls. unfortunately, section 301 of the budget act passed last october to create an exemption to the tcpa that permits collectors of federal debt primary student loan borrowers as well as taxpayers pursued by private collectors to be made without the consent of the consumer. this is dangerous precedent that will impact over 61 million americans and it should be repealed. we strongly support the hangup
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act which repeals section 301. it's evident consumers need more protection from such abuses, not less. continued enforcement of the tcpa is critical and we ask that you support consumers in this battle. thank you. >> thank you, ms. saunders. >> chairman thune and members of the committee. thank you for the opportunity to submit this testimony for the record. i serve as the national legal counsel for the american association of healthcare administrative management. which is a national organization actively representing the interest of healthcare administrative management professionals through a comprehensive program of legislative and regulatory monitoring and participation in many industry groups. i appreciate you holding the hearing today. as you know the fcc last july ruled on more than 20 petitions seeking clarifications to the telephone consumer protection act and the tcpa rules.
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we were one of the petitioners and sought a clarification of what prior consent means. as well as a partial exemption from the act to facilitate important healthcare related calls. the fcc's ruling did not clarify consent and kpeexempted certain type of calls. they cannot be financial in nature. because of the ambiguity of the term prior express consent and related entities are protected many well-intended healthcare organizations have been sued and tcpa litigation continues to sky rocket. to be clear, healthcare providers cannot do their jobs effectively, efficiently or cost effectively without using appropriate technology. the tcpa inhibits the use of such technology and as a result drives the cost of healthcare higher. the tcpa was intended to protect consumers from receiving unsolicited telemarketing calls in their homes at all hours of the day and night by restricting the use of auto dialers and
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requiring consent to be called. we fully support the goal and mission of the tcpa in helping to reduce unsolicited telemarketing calls. the complaints mentioned today are not involving healthcare providers. despite the positive intent, 25 years since its passage the tcpa has become out dated. it prevents americans from receiving non-marketing service messages they want including appointment reminders. social security disability eligible. credit card fraud alerts. notifications of travel changes. package delivery information and many more. further it prevents them from receiving the communications on devices they prefer, specifically their mobile telephones. 90% of u.s. house holds relied on their home or land line phone. today the trend is away from
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land line phones. since the enactment of the tcpa the use of text messaging has exploded. in 2012 more than $2.9 trillion text messages were sent and received. this could not have been anticipated when the tcpa was first enacted. new laws and regulations have been passed that make compliance more difficult. two examples of the affordable care act and the new irs regulations dealing with charitable hospitals. the aca requires hospitals and out patient clinics to perform post discharge follow up with patients to reduce the rate of readmission which is a big contributor to the cost of healthcare. we know the reminders surveys and education that have proven to lower readmission rates can be successfully and cost effectively conducted by phone. however this cannot be economically done under the current tcpa. similarly, the irs is 501 r regulations create a mandate. they require hospitals to make
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reas reasonable inquiries. by requiring the use of more labor intensive methods, the tcpa decisions have added unnecessary expense, diverting resources that could be dedicated to patient care. in today's technologically burgeon society it makes no sense for the fcc to allow technology to be contacted via land line but not cell phones. the fcc is looking at the modernization of the tcpa in the wrong way. the fcc should be looking at balancing the needs of consumers to obtain healthcare and other information quickly and efficiently through their mobile devices. and, also, be protected by the strong anti-telemarketing rules that already exist. we urge congress to modernize the tcpa to allow automated dialing technology to be used to text or call mobile phones as
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long as these texts or calls are not for telemarketing purposes. modernization of the tcpa in the healthcare irina arena is not a partisan issue. we should keep pace with the needs of today's consumers and businesses. it's about government working to bring healthcare costs down for consumers, not drive them up by continuing to require adherence to out dated rules and regulations. the current tcpa invites parties to pressure care givers for huge payouts. lawsuits even unsuccessful ones extraordinary time cost and effort to defend. thus rob hospitals of the ability to fulfill their mission. which is delivering quality healthcare at a reasonable cost. thank you for this opportunity. if you have any questions feel free to contact me. i would love to work with the committee. >> thank you. good morning, chairman, ranking member nelson and
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members of the committee. thank you very much for the opportunity to address the effects of the tcpa on consumers and businesses. i'm a partner at squire patten bogs i'm testifying in my individual capacity and not on behalf of a specific client. i spent over a decade in senior positions at the fcc. in private practice i worked with a wide range of clients in various industry sectors on tcpa compliance. they all share one very serious dilemma. how to manage risk in an environment where the normal expected or desired way to communicate is by calling a cell phone or sending a text and industry standards require certain out bound communications via a call or a text.
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but where every single call to a cell phone or every single text carries with it the potential risk of damages. when congress implemented the tcpa it struck a careful balance in protecting kurcconsumers fro abusive calls. protecting public safety entities and businesses from the jammed phone lines caused by specialized dialing equipment that autoly gmatically dialled thousands of numbers and protecting normal expected or desired communications. today, there are no longer any safe guards protecting callers from tcpa liability for normal communications. it doesn't matter if you're a national bank, a local blood bank or tyra banks you may have obtained prior express consent. but you will never know for certain before you make a call whether that number has been reassigned. the fcc created a safe harbor but it doesn't work. the safe harbor doesn't apply
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after one single reassigned call. whether or not there's any actual knowledge of a reassignment. you may be using modern technology that does not use or even have a random number generator. but according to the fcc, you're still using an automatic telephone dialing system if your equipment has something more than the theoretical potential to be modified at some hypothetical point in the future to become an atbs. no one knows what it means. it's not workable and not what congress intended. as a result, beneficial consumer communications are chilled. compliance minded entities are put into a catch-22. consumers trying to manage default and companies trying to engage in financial education are punished. first, many types of important and beneficial consumer communications trigger tcpa risk in the current environment, including communications from utilities to warn of service
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outages, mobile health programs such as text for baby. schools to provide attendance notifications. credit unions to provide low balance alerts. political candidates to provide information regarding town halls and election information. the list goes on and on and on. second, while the environment surrounding communications has become increasingly punitive. other regulatory agencies are encouraging and even requiring contact through phone calls and texts. companies are diverting resources from core business functions and taking inefficient steps to mitigate risks. for example, companies are replacing modern technologies which have many consumer benefits with low tech system and fat finger dialing. this creates a higher risk of wrong number calls. larger companies with more resources are paying for multiple data bases without an assurance of additional accuracy. small businesses often can't
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afford to do so. companies are requiring consumers to provide notice of any phone number change. and subjecting them to lawsuits for failure to do so. finally, i want to emphasize that not getting a call doesn't mean that a debt will go away. what a call is likely to do if a person is reached is educate the consumer about available repayments option and potentially avoid negative consequences such as the shutting off of a service, bad credit report, foreclosure or other legal remedy. the department of education stated when services are able to contact a borrower they have a better chance helping the borrower resolve the delinquency. i appreciate the commerce committee wants to understand how the tcpa is impacting consumers and businesses today. i have three recommendations for restoring the balance that congress works so hard to achieve. first, i would ask congress to support the creation of a
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reassigned numbers data base and allow a safe harbor for any caller who checks against the data base to confirm that a number has not been reassigned. a second quicker step would be for congress to confirm that when it created a statutory defense for prior express consent of the called party, it did not intend for that defense to be meaningless. third, congress should confirm that when it defined an automatic telephone dialing system it did not intend to broadly sweep into the definition any and every modern dialing technology. congress did not intend to for the tcpa to be a trap. and with consumers ultimately suffering the consequences. thank you and i look forward to your questions. >> thank you. let's start with five minute rounds of question. i'll start with ms. wallquist.
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the fcc has concluded service outages interruptions and supply of water gas or electricity could in many instances pose significant risk to public health and safety and the use of rerecorded message calls could speed the dissemination of information regarding service interruptions or other potentially hazardous conditions to the public end quote. none theless, despite receiving consent a number of utilities have faced litigation and potentially ruinous judgments for making such calls. do you agree that the commission action on the edison electric institute's and the american gas association's petition for declaratory ruling filed with the commission over a year ago would help utilities avoid meritless but costly litigation for these notices? do you think that ruling is long overdue? >> i would agree it would be
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helpful to the electric companies to have that ruling. i gr i agree it is overdue. i'm concerned it would be one more exception that the fcc would add into the check box of here's a few kinds of calls we think are okay. and in the 2015 order, they listed a few and this would add a few more. so the electric companies can say something about outage. and the problem is there's all of these other calls that consumers would want that they've signed up for and asked that businesses are afraid to make or if they're making they're getting sued under the tcpa. i think the fcc does need to rule on that order. and i don't know why it wasn't in the earlier ruling. people need to know if there's power outages. one of the petitions pointed out people have medical equipment at home that relies on power. we need to be able to alert them to an outage. that should be ruled on. i think there needs to be a much
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bigger look across the board as calls that are legitimate calls that are generating lawsuits. >> in a recent hearing, let me take a moment to acknowledge a positive development which is a decision some banks and credit unions have made to provide consumers realtime information about the funds in their accounts vaibl to be spent. they are doing this through text and e-mail alerts which can reduce the risks that consumers inadvertently overspend, end quote. how can banks, credit unions and other financial constitutions increase communication with their consumers if they have the threat of tcpa litigation hanging over their heads? >> thank you, you raise a very important point. there are all types of time sensitive consumer beneficial communications such as the example you raises available funds to reduce the risk of overspending but also high purchase alerts, low balance
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alerts. these types of time sensitive communications are only possible through modern technology. these communications can't be made through a rotary phone. and this is the heart of the challenge, not only for my financial institution clients, but frankly, all of my clients who engage in communications with consumers and with their customers. they are paying a significant cost for the additional risk that any time sensitive communication they make runs the risk of being sent to a reassigned number. and that is a factor that they cannot fully control. as a result, many of my clients are choosing to decrease beneficial elective communications through cell phone or text because they know that every single one of these communications does carry that additional risk. >> you stated the quote the practical impact of tcpa restrictions on the care provider community is
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devastating. end quote. i'm wondering, if you could elaborate on what that devoting so many resources to tcpa compliance means for patient care. >> thank you, i think that's the most important question i could be asked today. it does impact upon patient care, which is the most important aspect of providing healthcare. as any other enterprise a hospital has to make economic decisions when they are dealing with a finite pot of resources. if resources have to be dealt to dealing with the tcpa. if that impacts the number of nurses that are there to treat patients, it reduces the direct interaction between the nurses and the patient. the delivery of direct follow up instructions. other instructions with regard to the patient care. there have been studies done by the department of health and human

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