Today’s blog entry is a twofer. In the first part of the blog entry, we are going to update a case that we previously blogged on here. In the second part of the blog entry, we are going to explore the question of whether general commercial liability insurance policies cover failure to accommodate claims outside of the employment context. As usual, the blog entry is divided into categories and they are: Access Living v. Uber Technologies update; Access Living thoughts/takeaways; Brooklyn Center for Psychotherapy introduction; Second Circuit’s reasoning/insurance coverage; Second Circuit’s reasoning/certification; and thoughts/takeaways on the Second Circuit decision.



Access Living v. Uber Technologies, Inc. Update


We previously blogged on the District Court decision here. It gets appealed to the Seventh Circuit and the Seventh Circuit winds up affirming the District Court. Nevertheless, there are some things in the Seventh Circuit opinion that bear noting and they follow below:


  1. The lawsuit was brought by three individuals and Access Living. Two of those individuals settled. That left one individual and Access Living still in the case on appeal.
  2. The language of title III of the ADA requires plaintiffs to directly experience the challenged discrimination. In particular, 42 U.S.C. §12188(a)(1) limits claims to any person subjected to discrimination on the basis of disability. The dictionary defines “subject,” as, “bringing under the operation of an agent, agency, or process; to submit to certain treatment; to cause to undergo or experience something physically.” Therefore, title III of the ADA eliminates claims of individuals alleging only indirect injury experienced derivatively or vicariously through another.
  3. With respect to Access Living, no allegations were made that Access Living had its own corporate account and found itself unable to order rides for staff, volunteers, or guests. Instead, all of its allegations are indirect in the form of increased reimbursement costs to other individuals not able to use Uber.
  4. Title II of the ADA at 42 U.S.C. §12133 authorizes claims by, “any person alleging discrimination on the basis of disability.” The difference in formulation between title II and title III has to matter. That is, where Congress includes particular language in one section of a statute but omits it in another, it is generally presumed that Congress acted intentionally and purposely in doing it that way.
  5. Title II plaintiffs only have to trace the alleged injury to any proscribed discrimination within that portion of the ADA.
  6. The remaining individual plaintiff claim fails because she did not allege any direct injuries. It would have been a different story if the plaintiff had actually downloaded the app and tried to use it. However, she never did that, presumably to avoid an arbitration agreement kicking in. Failure to download the app meant that she could not show that she directly experienced the discrimination. Her association claim also fails because her husband, who had to use specialized vehicles all the time, never downloaded the app either. So, no direct injury there either.





  1. Association discrimination claims are still viable but there has to be a direct injury, which wasn’t present in this case because the husband never downloaded the app and tried to use Uber.
  2. With respect to Access Living, the whole case would change if Access Living got a corporate account from the Uber and employees tried to utilize Uber through the corporate account.
  3. The court’s language about the difference between how title II and title III phrase who can bring claims is very significant for the issue of what is causation under title II. Recall, title II’s causation is, “by reason of disability.” Whereas, §504 of the Rehabilitation Act is, “solely by reason of disability.” An argument exists that the difference in formulation between the two laws has to matter. After all, the ADA came into effect after §504 of the Rehabilitation Act.
  4. Also, very significant is the court’s statement that a title II plaintiff only has to trace the alleged injury to any proscribed discrimination within that portion of the ADA, which presumably includes the final regulations.
  5. The court is most probably right that the reason why the app was never downloaded was because the plaintiff did not want to subject themselves to an arbitration agreement. Should plaintiffs always be afraid of entering into arbitration? Certainly, plaintiffs do not like to do that. On the other hand, I have read many a blog entry from lawyers representing management saying that winning arbitration matters is no sure thing, and it can be just as expensive as traditional litigation.



Brooklyn Center for Psychotherapy, Inc. v. Philadelphia Indemnity Insurance Company Introduction


Our second case is Brooklyn Center for Psychotherapy, Inc. v. Philadelphia Indemnity Insurance Company, which can be found here. I found out about the case from one of the blogs in my blog roll, the Wait a Second blog. This case asks a fascinating question of whether general commercial liability insurance policies cover failure to accommodate claims. After reading this case, I did some legal research. There are very few cases around the country talking about this. I found a handful in California. As we will discuss in a bit, the answer as to why there are so few cases has an explanation. Nevertheless, there are cases. In the end, the Second Circuit winds up certifying to the highest court of the state of New York, which is actually called the Court of Appeals, to see how they would answer the question. Even so, it pays to look at what the Second Circuit said about the issue before certifying it to the highest court of the state of New York.



Second Circuit’s Reasoning/Insurance Coverage


  1. Under the policy, which is fairly typical, the policy provided coverage for those sums Brooklyn Center becomes legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence. That policy also mandates the insurance company has a duty to defend the Brooklyn Center against any suit seeking those damages. Finally, the policy defined an occurrence to mean an accident, including continuous or repeated exposure to substantially the same general harmful conditions. This “accident,” language has commonly appeared in comprehensive general liability policies since 1966.
  2. The duty to defend is broader than the duty to indemnify. An insurer has to defend whenever the allegations of the complaint suggests a reasonable possibility of coverage even though it is entirely possible that the insurer may not be required to pay once the litigation had run its course.
  3. Damages flowing directly immediately from the intended acts are not covered by such policies. However, damages accidentally arising out of a chain of unintended though expected or foreseeable events occurring after an intentional act are covered by such policy.
  4. Under New York law, damages can be considered accidental where the total situation could be found to constitute an accident.
  5. Under New York law, discrimination based upon disparate treatment is an intentional wrong, but that is not the case with respect to disparate impact discrimination suits and suits involving vicarious liability of employers.
  6. So long as Brooklyn Center believe that hiring interpreters to accommodate the customer’s disability was unreasonable or would have imposed an undue hardship on its business, any resulting harm from its refusal to accommodate that individual would be accidental.
  7. On the other hand, failure to provide the accommodation is an intentional act, and New York law has said that damages flowing directly and immediately from intended acts are not covered by such policies.



Second Circuit’s Reasoning Certification


  1. Certification to the highest court of New York is proper when: 1) the highest court of New York has not squarely addressed an issue and other decisions by New York State courts are insufficient to predict how the highest court will resolve it; 2) the plain language of the insurance contract does not indicate an answer; 3) a decision on the merits requires value judgments and important public policy choices that the highest court is better situated than the federal court to make; and 4) the question certified will control the outcome of the case.
  2. All four of the factors a court considers when making a certification referral apply: 1) the highest court of New York has not made any decision whether insurers must defend the insured in actions alleging failure to accommodate discrimination under general commercial liability insurance policies; 2) sufficient litigation does not exist for the federal court to figure out what the New York highest court would do; 3) based upon existing New York common law, the language of the policy is ambiguous with respect to whether a duty to defend exists for failure to accommodate claims; 4) a decision on the merits would require the federal court to determine whether New York public policy bars the defense of a failure to accommodate claim. Such a decision clearly implicates important public policy choices that the highest court of New York is better situated than a federal court to make; and 5) the answer to the question is wholly determinative of the decision before the Second Circuit.



Thoughts/Takeaways regarding Brooklyn Center


  1. You see very few of these cases. There is the Second Circuit case. As I mentioned above, when I did the legal research I found a handful of cases exploring this from California. At least one of those cases, I didn’t read them all, sided with the insured with respect to the duty to defend failure to accommodate claims under commercial general liability insurance policies. That fact is significant in and of itself as California has the tort of the covenant of good faith and fair dealing and does not give insurance companies a lot of slack when it comes to the duty to defend (in law school, I actually took insurance law from Harvey Levine, now deceased, who was one of the preeminent California attorneys with respect to the tort of the covenant of good faith and fair dealing in California. So, we were constantly talking about the duty of the insurance company to defend and what happens when they didn’t offer the limits of an insurance policy and settlement).
  2. If you think about it, it makes sense why you don’t see a lot of these cases. First, when it comes to title I of the ADA, employment liability insurance would cover that. When it come to title II of the ADA, nonfederal governmental entities are invariably self-insured. When it comes to title III of the ADA, damages aren’t even possible. The only remedies you can get for title III claims are injunctive relief and attorney fees. So, attorney fees can get expensive, but there aren’t any damages to worry about unless the Department of Justice gets involved. Accordingly, many title III cases will either result in the plaintiff backing off, a settlement, including attorney fees, being reached; or the title III entity granting the requested accommodation (any of these outcomes are cheaper than litigating). It will be interesting to see more of these cases arise in the future.
  3. An act may be intentional but not intentional in the legal sense. That is, negligence is intentional but that isn’t the same thing as conscious disregard, deliberate indifference, or discriminatory animus, or even an intentional tort. Many failure to accommodate claims are more like negligence claim than they are how lawyers think of intentional acts. Does such a distinction sway insurance coverage? Possibly… It would be interesting to see how a court would deal with that argument.