Serial ADA lawsuits create financial trap for US small retailers
A wave of serial litigation under the Americans with Disabilities Act is forcing US small business owners to choose between prohibitive legal fees and costly settlements, exposing hidden liabilities for retail operators.
In April 2025, Rodrigo Nogueira discovered his Manhattan restaurant, No More Cafe, was being sued for 35 violations of the Americans with Disabilities Act. The lawsuit alleged issues like non-compliant outdoor tables, despite the cafe having none, and internal barriers from a plaintiff who claimed he could not enter the building.
Nogueira’s case is part of a broader pattern of serial litigation targeting small US retailers. The plaintiff in his case has 67 active lawsuits, while the filing attorney has brought more than 100 such cases against storefront businesses over the past nine years. Nogueira determined that over 75% of the violations listed against his business were factually invalid.
For small businesses, the financial mechanics of these lawsuits leave little room to maneuver. Defending the claims in court typically costs between $20,000 and $50,000 in legal fees. Settling out of court is cheaper but still burdensome, generally running between $13,000 and $20,000 in total legal costs. In Nogueira’s case, the plaintiff demanded an $8,000 settlement on top of the defendant's own legal expenses.
The financial exposure often extends beyond the operators due to standard commercial lease structures. Leases frequently stipulate that renters are responsible for ADA violations, including covering the legal fees of landlords who are also named in the complaints.
Compliance itself presents a significant hurdle for operators with limited capital. The ADA code is highly complex, particularly for older or historic buildings where structural modifications require additional government approvals. Jessica Walker, president and CEO of the Manhattan Chamber of Commerce, noted that required repairs are often "cost-prohibitive" for smaller businesses.
Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York, characterized the serial filings as a revenue model for lawyers. “It is the definition of throwing spaghetti against the wall and seeing what sticks,” Stebbins said, arguing the system is "being abused by bad actors right now."
Disability advocates reject the premise that the lawsuits are predatory. Michelle Uzeta, executive director of the Disability Rights Education and Defense Fund, pointed out that the ADA has existed for over three decades. “There is no reason why accessibility issues have not been dealt with by now,” Uzeta said, emphasizing that most filed cases involve actual violations.
The US House of Representatives proposed a bipartisan solution in December: the ADA 30 Days to Comply Act, which would grant businesses a month to fix violations before facing litigation. Uzeta warned that a cure period would set "a dangerous precedent for all civil rights." Ruth Colker, a retired Ohio State University law professor, noted that private litigation for injunctive relief was explicitly "Congress’s decision" when structuring the law.
