Second Circuit Denies Standing to ADA Claimants in “cut and paste” Gift Card Lawsuits

Simon PLC Attorneys & Counselors – July 2022 Memorandum

Second Circuit Denies Standing to ADA Claimants in “cut and paste” Gift Card Lawsuits

Troy, Michigan – On June 2, 2022, the United States Court of Appeals for the Second Circuit issued a decision affirming the dismissal of four lawsuits filed by blind or visually impaired plaintiffs in the Southern District of New York.  What is a win for businesses is a rebuke for the serial plaintiffs instituting thousands of cut and paste, “substantively identical”, “Mad-Libs-style complaints” against businesses filed in New York in recent years in which the litigants claim standing to pursue claims under the Americans with Disabilities Act (ADA).   A cottage industry has popped up nationwide, but particularly in New York federal practice, with a handful of attorneys filing these lawsuits against brick-and-mortar businesses and web-based businesses alleging violations of the ADA and corresponding New York state and city law violations.  Plaintiffs that file these suits seek money damages, attorneys’ fees, injunctive relief, and attempt to turn each case into class action lawsuit.  Business have been fighting back and getting positive results.

Here, four cases were consolidated into Calcano v. Swarovski North America Ltd.  The four plaintiffs targeted Swarovski, Banana Republic, Jersey Mike’s, The Art of Shaving and Kohl’s in putative class-action lawsuits.  The plaintiffs, who were visually impaired, rely on braille to read written materials, alleged that they called the companies’ customer service offices in an attempt to purchase a store gift card and inquired if the defendant-companies sold give card containing braille.  The plaintiffs were informed that the companies did not sell gift cards containing braille.  The lawsuits also alleged that the defendants failed to offer any alternative auxiliary aids or services related to the sale of gift cards and they were denied access to the companies’ goods and services, which they allege constitutes discrimination under the ADA.  Notably, the plaintiffs alleged that they live near the respective defendants’ stores and were customers on prior occasions and that they would buy at least one gift card as soon as the defendants sold store give cards accessible to the blind.

The Second Circuit held that these plaintiffs lack standing to bring these cases – that the ADA does not require businesses to offer braille gift cards.  “Standing” requires that the plaintiff must have a personal stake in the case.  The Second Circuit reasoned that these allegations were insufficient to show that they suffered an injury that is concrete, particularized, and actual or imminent to confer standing under Title III of the ADA.  The court focused not on pleading “magic words” to confer standing, i.e., plaintiff intends to return” but rather whether the plaintiff plausibly alleged a “real and immediate threat of future injury.”

In its rebuke to plaintiffs, the Second Circuit did not accept plaintiffs’ argument that the district court should have accepted their allegations as true relating to each plaintiff being a customer of the defendant’s business on prior occasions; that each plaintiff intended to immediately purchase at least one store gift card from the defendant as soon as the defendant sells store gift cars that are accessible to the blind; or that they reside in close proximity to defendants’ stores.  These factors, the court held, do not establish standing.  Instead, the court held that these assertions are nothing more than “legal conclusions couched as factual allegations.” Citing Papasan v. Allain, 478 U.S. 265, 286 (1986); Baur v. Veneman, 352 F.3d 625, 636–37 (2d Cir. 2003) (explaining that “[w]hile the standard for reviewing standing at the pleading stage is lenient,” a plaintiff may not “rely solely on conclusory allegations of injury or ask the court to draw unwarranted inferences in order to find standing”).

One plaintiff alleged that he resides on the same block as a Kohl’s in Manhattan (there are no Kohl’s in Manhattan) and another plaintiff alleged that his Bronx residence was close to The Art of Shaving store located at Columbus Circle (the court held that this could be up to an hour away).  The court held that these bare allegations including vague assertions they have been customers at defendants’ businesses on prior occasions do not nudge their claims “across the line from conceivable to plausible.”  Citing, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009).

In a further and damning rebuke, the Second Circuit refused to ignore plaintiffs’ “transparent cut-and-paste and fill-in-the-blank pleadings.”  The court was not impressed with the fact that these four plaintiffs filed 81 of 200 “carbon-copy complaints” between October and December 2019 and that the complaints each contain the same typos.  As one last zinger, the court held that this “backdrop” of “Plaintiffs’ Mad-Libs-style complaints further confirms the implausibility of their claims of injury.”  The court held:

As noted above, Murphy asserts that he would return to a Kohl’s that doesn’t exist. Dominguez seeks to go back to Banana Republic for its food.  Thorne doesn’t even allege where he lives, making an assessment of proximity to a Jersey Mike’s impossible.  Calcano plans to travel from somewhere in the Bronx to Columbus Circle for a shaving supply gift card.  And all of these plans depend on the availability of braille gift cards even though Plaintiffs never explain why they want those cards in the first place. Although we might excuse a stray technical error or even credit an odd allegation standing alone as an idiosyncratic preference—to do so here in light of the cumulative implausibility of Plaintiffs’ allegations would be burying our heads in the sand. “[J]udicial experience and common sense” suggest that the errors, oddities, and omissions in the complaints are a result of their mass production, and they render each Plaintiff’s cookie-cutter assertion of standing implausible.

In Calcano, The Second Circuit did not rule on whether gift cards are a “place of public accommodation” under the ADA.   

On a parallel track are a slew of cases currently pending against web-based merchants both with and without brick-and-mortar operations.  The Second Circuit has yet to rule on whether websites are “places of public accommodation” covered by the ADA.  These cases will affect businesses greatly and strong decisions like Calcano will be important to the business community to counter baseless litigation.

Our Business Law and Litigation Teams regularly review and assess these types of claims. Please contact us at Simon PLC Attorneys & Counselors if your business has been sued with an ADA claim or has been threatened with litigation.

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