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Puerto Rico Plagued by Alleged Scheme of Drive-By Lawsuits

By on April 22, 2017

SAN JUAN — An attorney attempting to extort cash from Puerto Rico businesspeople is allegedly running a blackmail scheme targeting small and midsize businesses for alleged violations of the Americans with Disabilities Act (ADA). Rep. Manuel Natal Albelo (PDP-At large) along with several Guaynabo-area businesspeople denounced the scheme last week.

Natal Albelo was joined by Reps. Luis Vega Ramos (PDP-At large) minority spokesperson on the Judicial Affairs Committee, and Javier Aponte Dalmau (PDP-District 38: Canóvanas, Carolina & Trujillo Alto) minority spokesperson on the Small & Midsize Businesses Committee. They filed House Resolution 223 to investigate the alleged pattern that has been credited to a lawyer identified as José Carlos Vélez Colón.

Rep. Manuel Natal Albelo (Juan J. Rodríguez/CB)

PDP Rep. Manuel Natal Albelo stressed that House initiative doesn’t detract from ADA’s purposes, but rather seeks to defend small and midsize businesses. (Juan J. Rodríguez/CB)

“The practice consists of sending letters of out-of-court claims to businesspeople and offering them the opportunity to settle a lawsuit for a possible ADA violation. The alternative is that those who do not choose this course of action will be referred to the Federal Court,” said Natal Albelo, while mentioning there has been a proliferation of such cases on the island, with a current record of 200 cases.

The representative used as an example the fact that over the past 10 years there were no more than 20 annual lawsuits—at most—of this kind in Puerto Rico, while in 2015 there were 79 and in 2016 the number increased to 108 cases, all handled by the same attorney.

Carilyn Marrero, spokeswoman for the group of businesspeople, who reported the practice to the Legislature, explained how the scheme works.

“We received a letter, a lawsuit; we began to investigate on our own because we did not know how many people were [involved]. That’s when we noticed a behavior pattern where this attorney asks for economic remuneration to avoid having to go to court. The problem comes, because if you are going to litigate in that forum, it will cost you a lot more money than settling, and that is where the blackmail comes in, because if you have ever been summoned for a lawsuit in Federal Court, hiring an attorney can cost $3,000 for starters, and then [the amount] continues to increase,” Marrero said.

The spokeswoman also said the lawsuits have certain characteristics in common, giving the impression that they were made using a premeditated format, since they even repeat the same language.

Natal Albelo also explained that this practice is not exclusive to Puerto Rico, since hundreds of cases have been identified in different U.S. jurisdictions and are known as “drive-by lawsuits.”

Fraud modality?

Reports from the U.S. press indicate that thousands of lawsuits are filed annually for alleged ADA violations, but many of the businesspeople involved in the lawsuits claim it is a fraudulent scheme, raising suspicions about whether this is an elaborate fraud scheme.

For example, the Denver Post reported in February that an official who heads the Colorado State Developmental Disabilities Council has submitted dozens of such lawsuits against small businesses over the course of just two months.

In Arizona, the ABC network investigated the issue and got a Maricopa County Court judge to dismiss as frivolous some 1,000 lawsuits filed by a group advocating for the rights of people with disabilities.

See also: PDP Reps denounce alleged ADA fraud scheme

In addition, the Midland Reporter-Telegram in Midland, Texas, reported a myriad of such lawsuits filed by just two people and their legal representative against nearly 30 local businesses. The lawsuits are primarily linked to alleged violations of people with disabilities’ parking spaces, a fact that has forced these businesspeople to file a complaint with the state’s Chamber of Commerce.

Natal Albelo, however, clarified that the House initiative does not detract from ADA’s purposes, but rather seeks to defend small and midsize businesses by ensuring the legal profession is practiced in a faithful and honest manner.

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