‘Lawsuit factory’ attorney behind thousands of California ADA lawsuits pleads guilty to tax fraud

Northern California attorney Scott Johnson, who has filed thousands of disability lawsuits against local and state businesses over the past two decades, forcing some to shut down, pleaded guilty Tuesday in a federal tax fraud case.

The plea bargain could net the Sacramento attorney 18 months of home confinement and hefty fines, the Sacramento Bee reported.

Johnson is scheduled to be sentenced on March 7. 2023, by U.S. District Judge John A. Mendez and faces a maximum penalty of three years in prison, the U.S. Attorney's Office said.

The newspaper said the plea deal calls for Johnson, 60, to plead guilty to one count of filing a false tax return from the 2012 tax year, pay $250,000 in restitution to the IRS and face a sentence of 18 months of home confinement rather than prison because he is a quadriplegic.

By the time Johnson was indicted in May 2019, he had filed thousands of disability access lawsuits in the Stockton, San Joaquin County and Sacramento area, sometimes filing as many as six or more a day.

Johnson, who uses a motorized wheelchair to make the rounds of restaurants, office buildings and merchants he suspects are violating the federal Americans with Disabilities Act, has been one of the most prodigious serial filers of ADA lawsuits in California for years.

He has filed hundreds of disability access lawsuits against businesses in San Joaquin County; in 2014, he filed more than three dozen cases against Stockton businesses, many whose staff say they had never seen him in their establishments, and the following year targeted businesses in the city’s south side. Similar suits filed by other plaintiffs over the years have targeted the popular Chuck’s Hamburger’s and Finnegan’s pub and led to the 2003 closure of the iconic On Lock Sam’s Chinese restaurant.

Chuck’s owner: ‘We had to move’

In 2016, Stockton Democratic Rep. Jerry McNerney announced federal legislation that would give businesses 90 to 120 days to correct any deficiencies under the Americans with Disabilities Act before they could be sued and face penalties in hopes of aiding small businesses plagued by predatory lawsuits.

Steve Grant, owner of Chuck’s Hamburgers, stood alongside McNerney, saying his father started the Stockton landmark on Pacific Avenue, where it remained for generations until being forced to move.

“We were there for 56 years until we had to move because of ADA issues,” he said of a similar lawsuit filed by a Lodi man in 2009.

When a federal grand jury indicted Johnson on charges of filing fraudulent tax returns on funds he received from the lawsuits, some Sacramento-area merchants rejoiced, and Johnson’s filings at the I Street courthouse stopped coming.

‘Lawsuit factory’: ‘Lawsuit factory’: After tax fraud indictment, serial ADA filer turns focus from Valley to Bay Area

But that doesn’t mean Johnson went away.

Instead, he turned his focus to the Bay Area, court records show, where he has filed 1,006 cases since he was charged.

“I looked up Scott Johnson and one day in Silicon Valley he had 19 suits, and another day he had 14 and another day he had 13,” Kathryn Hughes, who was sued over a building she and her husband own in Campbell that houses a salon, said in 2021. “And then he must have had a slow day one week because it was only two.”

Hughes, 86, said she had never before been sued over ADA issues and that the law firm that filed on Johnson’s behalf offered to settle the case for $19,000.

“But there’s no way,” Hughes said in 2021, echoing a claim many merchants have made over the years that Johnson never actually tried entering the business he is suing for access.

“In this suit, he said that he visited Amy’s Salon on the first floor in November,” Hughes said. “Now, Amy’s Salon, there was no one there in November because they were closed because of COVID.

“Number two, you may not visit Amy’s Salon, especially if you are male, because you have to be interviewed and vetted because she works there alone. And number three, you may not open Amy’s door — even if it’s a knob or a lever — because it’s locked, and you must press a button for her to open the door and let you in.”

1,918 new Bay Area cases since 2015

California law calls for businesses to pay at least $4,000 for each violation encountered by a potential patron, plus attorneys fees, but the amounts of settlements vary.

Johnson focused much of his attention on businesses in the Central Valley and Sacramento region, filing more than 2,900 lawsuits in the area since 2003.

But he hasn’t filed any in the Sacramento-based Eastern District of California since January 2019, just before his indictment, according to court records.

While other plaintiffs have continued to file cases against merchants in the area since Johnson’s indictment, he has turned his focus to the Bay Area, where he is listed as a plaintiff in 1,918 cases since 2015, more than half of which were filed after he was indicted.

And despite the stay-at-home orders issued during the pandemic, Johnson still was able to travel to Bay Area merchants to ferret out potential ADA deficiencies.

“It looks like even though we were supposed to stay at home, shelter in place, he’s visited places 60 miles away,” Hector Pedraza, owner of Crown Tires & Auto Repair in Hayward, which Johnson sued over a lack of wheelchair accessible parking, said in 2021. “According to his suit, he was right here during the shelter-in-place, away from his home.”

Johnson sued Pedraza and the building owners last March, alleging he was unable to find accessible parking during an August 2020 visit, and Pedraza said in April that he expected the case would end in a settlement.

“I guess it’s cheaper to do it that way than to spend $50,000 or $100,000 on litigation,” Pedraza said.

In fact, the case was settled in May and dismissed, court filings say.

Nora Rousso, a Campbell attorney who represents Kathryn Hughes in Johnson’s suit over her building, said she considers the Potter Handy law firm suing on behalf of Johnson — which touts its expertise online in handling wildfire, nursing home and other cases — to be like “a factory.”

“They have so many cases they don’t even know who they’ve sued,” she said. “They just want you to make them an offer, and they’ll judge whether they can squeeze you for a little bit more ...

“The calculation is always this: How afraid are the clients and how much are they afraid of having to pay a lawyer than perhaps paying to settle the claim? It’s very calculated, and very jaded.”

Ex-employees say he never entered businesses he goes after

Disability advocates argue that businesses have had decades to come into compliance, and that those facing lawsuits simply have not made adequate efforts to do so. They have argued that offering to provide access by carrying patrons into an inaccessible cafe, as some have done, is not granting equal access.

Sacramento attorney Catherine Corfee, who has defended hundreds of clients sued by Johnson and others over ADA cases, once represented four women who worked for Johnson and filed a workplace sexual harassment lawsuit against him.

The case was settled, but Corfee said the women claimed Johnson did “drive-bys” of businesses before sending the women in to document potential problems, despite the fact that a plaintiff has to personally experience a barrier to access to sue.

“He does these intentional drive-bys, and he would send them in with a ‘cheat sheet’ literally that would say something like, ‘check the bathrooms, take a picture,’ ” she said. “It literally was not protecting any injury he suffered or a personal barrier.”

One of her clients, Sacramento businessman Mel Vail, said he had paid out $200,000 to deal with Johnson’s ADA lawsuits, including for some properties he believes Johnson never entered.

Record archives and The Sacramento Bee contributed to this report.

This article originally appeared on The Record: Attorney behind California ADA lawsuits pleads guilty to tax fraud