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Johnson v. Compton

United States District Court, E.D. California

April 7, 2017

LARRY D. COMPTON; EL MONTE RENTS, INC., a California Corporation; and Does 1-10, Defendants.



         Plaintiff Scott Johnson (“Johnson”) brings this action against Defendants Larry Compton (“Compton”) and El Monte Rents, Inc. (“El Monte”), alleging violations of the ADA and California law. ECF No. 1. El Monte now moves for summary judgment, ECF No. 8, which Johnson opposes, ECF No. 18.[1]


         Johnson, a quadriplegic, visited or attempted to visit property located at 4100 Florin-Perkins Road in Sacramento (the “Property”) multiple times from June to November 2016. Compl. ¶ 20.[2] Compton has owned the Property since 1997. Pl.'s El Monte's Statement of Undisputed Facts (“UF”) # 1, ECF No. 18-1. El Monte has never owned or leased the Property. UF ## 2, 4. In 2008, Compton leased (and still leases) the Property to his own company, Lucky Ventures. UF # 3.

         El Monte rents RVs through “dealer agents” such as Lucky Ventures. UF ## 5, 6. In 2008, El Monte and Lucky Ventures entered into a contract (“the Agreement”), in which Lucky Ventures agreed to make El Monte's RVs available at the Property. Compton Decl., Exh. 1, ECF No. 10; UF ##6, 8.

         The Agreement requires, among other things, that Lucky Ventures conduct business for at least six days per week, allow El Monte to install signs and advertising materials on the Property, comply with governmental laws and regulations, and defend and indemnify El Monte “from any and all claims . . . caused by or arising directly or indirectly out of any condition of the premises.” Agreement at 2, 4, 5, 7. The Agreement also states: “El Monte RV hereby appoints [Lucky Ventures] its agent for the sole purpose of operating a non-exclusive rental agency at the aforesaid location in accordance with this Agreement and [Lucky Ventures] hereby accepts said appointment.” Agreement at 1.

         El Monte argues it does not own, lease, or operate a business on the Property, and therefore Johnson cannot hold El Monte liable for any of the Property's ADA violations. Mot. at 1.

         II. OPINION

         The ADA states: “[n]o individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.” 42 U.S.C. § 12182.

         Johnson concedes that El Monte never owned or leased the Property. UF #2, 4. The sole question presented by El Monte's motion, therefore, is whether El Monte “operates a place of public accommodation” so as to give rise to liability for ADA violations.

         The ADA does not define “operates.” The Ninth Circuit has stated “to operate means to put or keep in operation, to control or direct the functioning of, or to conduct the affairs of; manage.” Lentini v. Cal. Cent. for the Arts, 370 F.3d 837, 849 (9th Cir. 2004) (citing Neff v. Am. Dairy Queen Corp., 58 F.3d 1063, 1066 (5th Cir. 1995)) (internal quotation marks omitted). Put simply, courts must ask whether the defendant “had the power to facilitate any necessary accommodation.” Id.

         El Monte argues Johnson cannot hold El Monte liable for ADA violations because El Monte “has no control over the alleged discriminatory conditions at the Property.” Mot. at 11. El Monte analogizes its relationship with Lucky Ventures and the Property to the franchisee/franchisor relationships in Neff, Lemmons v. Ace Hardware Corp., 2014 WL 3107842, at *1 (N.D. Cal. Jul. 3, 2014), and U.S. v. Days Inn of Am., 1998 WL 461203, at *1 (E.D. Cal. Jan. 12, 1998), where the courts found the plaintiffs could not hold the franchisors liable for ADA violations at the franchisees' places of business. Mot. at 9-10.

         The Fifth Circuit decided Neff, but the Ninth Circuit relied on it in Lentini for the definition of “operates” under the ADA, so it is relevant here. See Lentini, 370 F.3d at 849. The Neff court concluded Dairy Queen was not an operator under the ADA even though the franchising agreement gave Dairy Queen the right to set standards for building and equipment maintenance and to veto proposed structural changes at the franchise. Neff, 58 F.3d at 1068.

         Similarly, in Lemmons, the agreement between Ace Hardware and its franchisee Berkeley Hardware required Berkeley Hardware “to abide by all federal and state laws, including those pertaining to disability access.” Lemmons, 2014 WL 3107842, at *7. Ace could terminate the agreement if Berkeley Hardware did not comply with this requirement. Id. The Lemmons court held “while these contractual terms might provide an additional incentive to Berkeley Hardware to comply with federal and state laws, they do not grant Ace the ‘specific control' necessary to impose liability on it.” Id. The Court found “no evidence to show that Ace retained the authority under the agreement to dictate the physical layout of the store, or that otherwise participated in the alleged acts of discrimination against ...

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