Netflix Settles Massachusetts ADA Lawsuit: What It Means for Online Businesses

If you follow this blog you know that we’ve spent a fair amount of ink covering the recent ADA lawsuits brought against Netflix.  These cases (one brought in Massachusetts federal court and another in California federal court) allege that the company violated the ADA by failing to offer “closed captioning” options for all its Internet streamed movies.  The results have been a split decision for Netflix.  The Massachusetts court held (without deciding liability) that Netflix Internet-streamed movies constituted a public accommodation that must comply with the requirements of the ADA.  The California court reached the opposite conclusion and dismissed that case holding that Netflix’s online Internet movies did not fall within the ADA’s definition of public accommodation.  Recently, Netflix publically settled the Massachusetts case while it was pending on appeal.

Under the terms of the settlement agreement, Netflix agreed to include closed captioning for all of its Internet streamed movies by 2014 and gradually reduce the time for including close captioning for new movies.  The company will also pay $755,000 in fees to the plaintiff’s attorneys (ed. note not a typo) and commit $40,000 for the implementation of changes to its practices.

So what does this mean for other online businesses?  For starters, it removes the hope that this case would offer an opportunity for the courts to provide clarity as to how the ADA’s definition of “public accommodation” applies to online businesses.  It is also likely to embolden plaintiff’s attorneys and disability rights groups to aggressively pursue accessibility claims against businesses that operate online (or which have online components to their business).  Finally, we anticipate seeing claims that go beyond the specific issues in the Netflix case (i.e. closed captioning) and into other online accessibility issues such as visual displays and website navigation tools.

The bottom line is that businesses should anticipate their online activities receiving increased ADA scrutiny and challenges.  This includes both large online retailers as well as smaller “mom and pop” businesses.  In light of the Netflix settlement (and the significant media attention it has garnered) now is a good time for all businesses to review their websites and online activities for ADA compliance.

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