This week is a two fer. At 11 AM Eastern time, the United States Supreme Court will hear argument in Sheehan (my blog entry on that case can be found here). I promise that I will read the transcript of the argument and post my analysis this week.

This particular blog entry involves two different cases questioning whether the ADA applies to web-based only businesses, both of which were argued to the Ninth Circuit on March 13, 2015, four days AFTER Perez.

Earll involves the situation where a deaf individual wanted to be an eBay vendor but could not be because the certification that she had to do in order to become an eBay vendor involved having to listen over the phone, and she of course could not do that since she was deaf. Cullen is the California version of the case discussed in this blog entry.

Here is how the argument before Judges McKeown, Murguia, and Friedland went (interesting that I could not find a way to read the transcript or a way to view the oral argument with closed captioning. Not sure if that was my technical skills or the ways don’t exist…:-).

Plaintiff (Earll)

1. The statement of interest from the Department of Justice saying that the ADA applies to web only based businesses is entitled to Chevron deference.

A. The Department of Justice specifically says that they are interpreting regulations of the ADA in reaching this conclusion.

2. Weyer v. 20th Century Fox Film Corporation, 198 F.3d 1104 (9th Cir. 2000), is no longer good law in light of Spector v. Norwegian Cruise Line, Limited, 545 U.S. 119 (2005).

A. Quite a bit of debate ensued between the judges and the appellant as to whether Spector even applied.

3. The appellant never cited to either National Association of the Deaf v. Netflix , 869 F. Supp. 2d 196 (D. Mass. 2012), or to Doe v. Mutual of Omaha, 179 F.3d 557 (7th Cir. 1999), though the judges did in response to the appellee’s arguments.

4. A very technical discussion ensued as to whether certain arguments could be made in light of the way the documents were filed and the arguments made in those documents.

eBay (Appellee)

1. Weyer is the law in the Ninth Circuit and it insists on an actual physical place.

2. National Association of the Deaf v. Netflix is simply not good law and should not be persuasive to the Ninth Circuit because it relied on Carparts Distribution Center, Inc. v. Automated Wholesaler’s Association of New England, 37 F.3d 12 (1st Cir. 1994), which was a policy driven decision and not a decision based upon statute. That is, the plain meaning of title III of the ADA is that places of public accommodations are subject to its requirements. The emphasis is on the term, “place.”

3. Doe v. Mutual of Omaha Insurance Company, 179 F.3d 557 (7th Cir. 1999), statement that the ADA applies to electronic space is dicta.

4. Attorney for eBay conceded essentially that it goes too far to say that any website is not subject to the ADA, but it is consistent with the ADA to say that web-based only businesses are not subject to the ADA. In other words, in essence, the attorney for eBay was essentially saying that National Federation of the Blind v. Target Corporation, 452 F. Supp. 2d 946 (N.D. Cal. 2006), is good law.

5. The attorney for eBay actually argued the Spector case before the United States Supreme Court, and he said the issue was not whether the ship was a place of public accommodation as a ship is most certainly a place. Rather, the issue there concerned foreign flag vessels and whether they were subject to the ADA.

Cullen v. Netflix

Appellant (Cullen)

1. The ADA contains gaps that could be filled in by the appropriate federal agency and those gaps should be given Chevron deference.

2. The Department of Justice interpretation of the regulations trumps Weyer

3. The Department of Justice interpretation of the regulations may be found in an appendix. A considerable debate ensued about whether the appendix was interpretation or whether it was a regulation. The attorney for Cullen eventually had to say under intense questioning by one of the judges on the panel that the interpretation was not a regulation but rather an interpretation codified as part of a regulation.

Appellee (Netflix)

Cullen waived an independent disabled persons act claim but not the state law claims based upon the ADA.

My thoughts:

1. There was an awful lot of argument about whether the Department of Justice interpretation of what the ADA requires and its regulations should be entitled to Chevron deference. Bottom Line here is that the United States Supreme Court will not have to wait until the Department of Transportation regulation discussed in Perez makes its way through the court system before deciding the level of deference interpretation of regulations if this case gets a hearing before the United States Supreme Court after the Ninth Circuit decides it. If the Ninth Circuit finds that the interpretation of the regulations is entitled to deference, then the issue is squarely before the United States Supreme Court per Perez. Therefore, if the Ninth Circuit Court of Appeals holds that the Department of Justice interpretations of the regulations contained in their statement of interest and in the appendix are entitled to Chevron deference (as Perez makes clear, Chevron deference may not be the appropriate term since it is the agency’s interpretation of regulations that are involved here), then the issue will be squarely before the United States Supreme Court. While Perez did not come up by any of the attorneys or the judges in the argument, one has to believe that it will be a critical feature of the panel decision in this case. It is curious that none of the attorneys or the judges brought up Perez as that case, admittedly decided only four days prior to this argument, was very much lurking in this oral argument.

2. It is a pretty powerful argument when an attorney that has argued a case before the United States Supreme Court comes back with a statement saying that a particular case the appellant is arguing does not stand for what the appellant says because I argued that case and I was there. I am inclined to agree with that attorney. The issue in Spector was the foreign flag question and not whether the ship was a place.

3. The statement in Doe v. Mutual of Omaha Insurance Company that the ADA applies to electronic space is most certainly dicta as the case had nothing to do with that particular statement. That said, the fact that Judge Posner made that statement is an important consideration.

4. National Federation of the Blind v. Target got a big shot in the arm from this argument when eBay essentially says that it is good law. That is, eBay essentially conceded that a website if it is a gateway to a brick-and-mortar store, then that website must be in compliance with the ADA.

5. The attorney for eBay argument that Carparts was a policy driven decision and not a statutory based decision could have been made even stronger by saying that Congress amended the ADA with the ADAAA and they did not take the opportunity at that time to make it clear that the Internet was a place of public accommodations when they made those amendments to the ADA.

6. If EBay and Netflix lose, expect an appeal to the United States Supreme Court where the concerns of the concurring opinion in Perez will be squarely presented. If eBay and Netflix win and Earll and Cullen appeal, Perez will be the key there as well. If Cullen and Earll lose, there will be a real thing to consider as to whether they should even apply for cert. to the Supreme Court as it is entirely possible that by appealing, the United States Supreme Court will be given the opportunity to turn administrative law upside down and that is a risk that the plaintiffs may not want to take with respect to what it might mean for future cases.

2 Responses to Earll v. eBay and Cullen v. Netflix before the 9th Circuit: Perez matters NOW though nobody seemed to see it

The Ninth Circuit handed down their decision in both of the cases. First, it is important to note that decisions are unpublished and therefore, come with it a tremendous amount of restrictions in terms of how persuasive they are going to be. Second, in a nutshell, the decisions hold that place of public accommodation means a physical place. Therefore, absent some connection to a physical place, an entity is not subject to title III of the ADA. Therefore, a purely web-based business is not subject to title III of the ADA. Third, since the language used is “some connection to a physical place,” it is fair to say that the National Federation of the Blind v. Target (gatewayapproach), is a fair reading of where the Ninth Circuit stands. Fourth, the court also threw out the intentional discrimination claim under California law against eBay saying that the policy requiring aural confirmation in order to be a vendor apply to everyone and therefore, the discrimination cannot be intentional (of course, if eBay had been decided to be a place of public accommodation, which was not the case, then the screen out provisions would have kicked in).

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