In a new twist on an old ruse that some call legal extortion, a Los Angeles attorney is suspected of creating “ghost” clients who file hundreds of lawsuits under the Americans with Disabilities Act to extract settlements from Southern California businesses.
Simon Soo Kil Chang, who operates the K&C Law Firm, has for at least the past three years allegedly targeted vulnerable mom-and-pop establishments that don’t have the financial resources to fight the civil rights claims in Orange and Los Angeles county courts, according to Placentia attorney David Michaels.
Michaels has filed a complaint with the State Bar of California urging swift action to stop the harassment of businesses, which typically offer up to $4,000 to settle complaints alleging such ADA violations as faded paint on a handicapped parking spot or a bathroom mirror that rests perhaps an inch too high.
“I cannot stress enough the urgency this matter must be given,” Michaels wrote in his 2018 letter to the State Bar. “I have contacted over 200 defendants in person or by telephone who are victims of crimes. Please help stop this enterprise, remove all those involved from the bar, and forward this information to the proper authorities for criminal prosecution.”
The California State Bar would neither confirm nor deny Chang is under investigation, spokeswoman Teresa Ruano said.
However, Mia Ellis, a supervising attorney for the state licensing agency, acknowledged in an October 2018 letter to Michaels the complaint had been forwarded to the bar’s Enforcement Unit for further investigation and possible prosecution.
Meanwhile, the number of suspicious ADA lawsuits mount, with more than two dozen filed in Orange County courts in just the past month.
Chang denies Michaels’ allegations that he has manufactured the complaints.
“Our office never filed those ADA lawsuits,” he said in an email to the Southern California News Group. “We did help some of the plaintiffs in ADA lawsuits with the settlement process, which is why there were settlement checks written to our office.”
Serial ADA plaintiffs proliferate
The Americans with Disabilities Act was enacted in 1990 to ensure the disabled have access to public accommodations. But the legislation has given rise to a cottage industry of so-called drive-by lawsuits, often targeting improper handicap parking accommodations or signage visible outside businesses.
The number of ADA lawsuits filed in federal court in 2018 hit a record high of 10,163 — up 34 percent from 2017, when the number was 7,663, according to Seyfarth Shaw, one of the nation’s largest law firms specializing in defending against such cases.
California led the nation in federal ADA cases last year with 4,249 filings compared to 2,751 in 2017. Those figures do not include state court filings that Shaw doesn’t track.
Prolific serial plaintiffs, scattered throughout California with ties to a handful of law firms, typically are wheelchair-bound activists who purport to have the best interests of the disabled in mind.
But critics say the lawsuits essentially amount to legal shakedowns, designed to encourage settlements with plaintiffs to avoid fines of up to $4,000 under California law; federal law caps fines at $1,000 for ADA violations.
Where are the clients?
What makes Chang’s lawsuits different, Michaels says, are his clients — not one has been found to exist.
“All evidence points to Simon Chang being behind the entire scheme,” he said. “It’s pretty incredible.”
Stephen Abraham, a Newport Beach attorney who last year represented more than 120 Southern California businesses sued for ADA violations, said each of the lawsuits follows the same pattern, even containing the same boilerplate language and identical typographical errors
The named plaintiffs never attend hearings and negotiate with defendants via email, instructing them to send settlement checks to Chang, Michaels said. The complaints also never demand that plaintiffs correct deficiencies cited under the ADA.
“You would expect a real plaintiff motivated to file a lawsuit affecting his civil rights to show up in court at some point,” Abraham said. “But they never do. It’s my conclusion the person doesn’t exist.”
Case in point: Victorino Castillo.
Hundreds of ADA cases are filed under Castillo’s name in Orange and Los Angeles counties. In his State Bar complaint, Michaels said he has reached out to defendants and their attorneys in all of those cases.
“Not a single defendant or (legal) representative has ever seen or talked to Victorino,” he wrote.
Getting to the bottom of things
Michaels, a 51-year-old tax attorney who knew little about disability law until a friend who owns a Placentia pizza shop asked him for help in March 2018, began to dig deeper.
That month, Michaels visited the Los Angeles address listed on the lawsuit as belonging to Castillo. It turned out to be an unlikely location for a disabled individual.
“To my surprise, the address was a mailbox on the top floor of a two-story strip mall on West Sixth Street in Koreatown,” Michaels said.
A woman working at the business told Michaels the mailboxes were not handicapped accessible and that she had never seen a man there in a wheelchair.
She also had another piece of information — the mailbox purportedly belonging to Castillo was actually rented by a law firm.
“At this point, I had a frivolous complaint,” Michaels said. “The phone number was bogus, and the mailbox was not wheelchair accessible. The only way to reach the second floor was to walk up a staircase. And the mailbox was owned by lawyers. I suspected fraud.”
The mailboxes have since been removed and the location is now occupied by a massage business.
Chang did not respond to an inquiry from the Southern California News Group whether his firm rented the mailbox.
Lawsuits copied & pasted
Even more telling, various addresses listed on lawsuits purportedly filed by Castillo are identical to those of other plaintiffs in separate ADA complaints, according to Orange County Superior Court records.
All of the addresses are within 1 1/2 miles of Chang’s office, which is tucked away on the 12th floor of a quiet office building in Koreatown. A reporter who visited the office was told Chang wasn’t in.
Chang told the State Bar in February he doesn’t know Castillo.
“I never represented anyone named Victorino, in any cases, and I don’t know this alleged individual,” Chang said in the email. “Never heard of, never dealt with him, never saw him, never represented him.”
The Southern California News Group, however, has obtained documents showing otherwise, including more than a half-dozen ADA settlement checks cashed by the K&C Law Firm and settlement agreements signed by Chang, who identifies himself as Castillo’s attorney.
“Attached is the signed settlement agreement … for K&C Law Firm,” Simon Chang said in a Nov. 21 2018 email to the attorney for the Shabu Shabu Bar in Santa Ana, named in an ADA lawsuit purported to have been filed by Castillo. “Please remember to mail the settlement check to our office. Happy Holidays.”
Chang sent a recent email to the Southern California News Group contradicting his earlier claim to the State Bar that he doesn’t know Castillo.
“I looked into the files… and I can confirm that Victorino Castillo does exist and it was him that filed these actions,” he wrote. “I can prove that he exists and you have my word.”
Financial toll on small businesses
Another business, Apollo Burgers in Garden Grove, paid Chang’s law firm $2,000 in July 2018, to make an ADA lawsuit from Castillo go away, according to copy of the check obtained from Misuk Kim, who co-owns the restaurant with daughter Helen Kim.
Like all the other Castillo complaints, the suit alleged the restaurant’s parking lot was not ADA compliant, said Misuk Kim, who is certain Castillo never visited the strip mall eatery. “He never came in,” she said. “He just made up his own story.”
Three months before the lawsuit was filed, the shopping center’s landlord had repaved the parking lot and made other improvements to ensure it was ADA compliant, Helen Kim said.
Like other ADA plaintiffs, the Kims decided it would be better to settle the lawsuit than fight it in court. They paid $2,000 to hire a paralegal to reach out to Castillo to negotiate a payment, but nearly a month went by without word from the plaintiff.
Then, just two days before the 30-day deadline to answer the lawsuit, the Kims’ paralegal received an email purportedly from Castillo with instructions to send the $2,000 settlement check to Chang, Misuk Kim said.
The check was mailed, the lawsuit was dropped and the Kims never heard from Castillo again.
Their dealings with Chang and another man who promised to recover their settlement — but never did — has taken an emotional and financial toll. “It has been so stressful,” Helen Kim said. “It’s horrible when you are just trying to make a living.”
Fighting back
There have been efforts to prosecute serial plaintiffs and the lawyers who represent them.
The Riverside County District Attorney’s Office in April sued four lawyers and another man for allegedly targeting small businesses with ADA lawsuits and making misrepresentations to the court to obtain settlements.
Then, in May, a federal grand jury indicted Scott Johnson, a quadriplegic attorney and serial ADA plaintiff from Sacramento, for filing false tax returns that allegedly understated his income from ADA lawsuit settlements from 2012 through 2014.
It’s unconscionable that serial plaintiffs, especially those who may not exist such as Castillo, are allowed to use the legal system “like a blunt instrument” to frighten defendants into settling bogus ADA lawsuits, Abraham said.
Small family-owned businesses are vulnerable, he said, because they fear becoming entangled in the legal system and are likely to settle quickly, he said.
“All are hardworking people who do everything they can to avoid drawing the attention from the state,” he added. “When they get hit by a lawsuit, they don’t tell family members about it. They often feel shame and don’t want to contact defense lawyers.”
Abraham said the situation “screams out for the Orange County District Attorney’s Office and California Attorney General’s Office to look into this.”
The Orange County District Attorney’s defers to the State Bar to investigate ethical complaints against lawyers, spokeswoman Kimberly Edds said. And the California Attorney General’s Office declined to comment.
Could legislation help?
Meanwhile, the proliferation of predatory ADA complaints hasn’t gone unnoticed by California lawmakers.
Assemblyman Devon Mathis, R-Visalia, proposed bills in 2017 and 2018 to curb ADA lawsuit abuse. Both proposals would have given businesses several months to correct alleged ADA violations before lawsuits could proceed, but they died in the Assembly Judiciary Committee.
Ruthee Goldkorn of Californians for Disability Rights dismissed legislation as a means to curb ADA abuse, insisting only legal action can prevent unscrupulous lawyers from filing predatory lawsuits.
“Legislation will do nothing to stop these people,” she said. “The bar association has to go after these lawyers. It’s an ethics violation and they should be stripped of their bar card.”
