Number range CHAPTER**UNITED STATES DISTRICT COURT**

**EASTERN DISTRICT OF KENTUCKY**

**PIKEVILLE DIVISION**

**United States of America, )**

**)**

**Plaintiff, ) Case No. 96-26**

**)**

**v. )**

**)**

**Days Inns of America, Inc., )**

**Hospitality Franchise Systems, Inc., )**

**Hazard Management Group, Inc., )**

**J. Douglas Kidd, and )**

**Napier-Sebastian Corporation. )**

**)**

**Defendants. )**

**PLAINTIFF UNITED STATES\' MEMORANDUM**

**IN OPPOSITION TO DEFENDANTS MOTION FOR SUMMARY JUDGMENT**

> ISABELLE KATZ PINZLER
>
> Acting Assistant Attorney General
>
> Civil Rights Division
>
> JOHN L. WODATCH, Chief
>
> RENEE M. WOHLENHAUS,
>
> Acting Deputy Chief
>
> JEANINE M. WORDEN
>
> THOMAS M. CONTROIS
>
> ROBERTA STINAR KIRKENDALL
>
> MARGARITA M. PRIETO
>
> Attorneys
>
> Disability Rights Section
>
> U.S. Department of Justice
>
> Post Office Box 66738
>
> Washington, D.C. 20035-6738
>
> \(202\) 307-6556

**TABLE OF CONTENTS**

Page

Introduction 1

Counterstatement of the Case 3

A. The ADA Requires That All Newly Constructed Hotels Be

Accessible to Persons with Disabilities 3

B. The Hazard Days Inn and Other Newly Constructed Days Inns Are

Not Accessible to Individuals with Disabilities 4

C. DIA and HFS Had Extensive Control Over, and Involvement in,

the Design and Construction of these Nonaccessible Hotels 4

D. DIA Controls the Operations of the Hazard Days Inn

and Other Newly Constructed Hotels in the Days Inn System 7

Argument 7

A. Section 303 of the ADA Is a Broad Prohibition of the Design

and Construction of Public Accommodations and Commercial

Facilities That Are Not Accessible to Individuals with Disabilities 7

B. Liability Under Section 303 Is Not Limited to Owners, Lessors,

Lessees, and Operators of Public Accommodations and Commercial
Facilities 10

1\. The Scope of § 303 is Broader, and Was Intended to Be

Broader, Than the Scope of § 302 11

2\. Limiting § 303\'s Coverage to Persons Who Own, Lease,

or Operate a Facility Would Frustrate Congress\' Purpose in

Enacting the ADA 14

3\. DIA\'s Account of the Legislative History of § 302 and § 303

Is Misleading 17

4\. Two Other Courts Have Addressed the Scope of § 303

and Reached Opposite Conclusions 20

5\. The Department of Justice\'s Interpretation of Section 303 Is

Entitled To Deference 21

C. Even if § 303 Were Limited as DIA Suggests, DIA Is Still Liable

Because It Operates the Hazard Days Inn and Other Newly

Constructed Days Inns 24

1\. Contrary to DIA\'s Assertions, [Neff v. American Dairy
Queen]{.underline} Does

Not Require a Showing of Causation 24

2\. Under the [Neff]{.underline} Test, DIA Operates the Hazard Days Inn
25

3\. [Neff]{.underline} Was Wrongly Decided 26

4\. The Undisputed Evidence Shows That DIA Operates the Hazard

Days Inn and Other Newly Constructed Days Inns 28

a\. DIA Operates the Hazard Days Inn and Other Newly

Constructed Days Inns Through Its \"Hotel Operating

System\" and \" System Standards.\" 28

b\. DIA Uses its QA Program to Enforce Compliance

with System Standards 31

c\. DIA Controls or Directs the Functioning of the Hazard

Days Inn and Other New Days Inns in other Ways 32

D. DIA\'s Reliance on the Lanham Act and State Court Decisions

Interpreting Agency Law Is Misplaced 33

1\. DIA Exercised Far More Control Over the Hazard Days Inn and

Other Newly Constructed Days Inns Than the Lanham Act

Requires 33

2\. The Lanham Act Does Not Exempt DIA From Compliance with the

ADA 34

3\. DIA\'s Reliance on State Court Cases Applying Doctrines of

Agency Is Unavailing Because DIA\'s Liability Results from Its

Own Acts 35

E. DIA Cannot Delegate Its Duty to Comply with the ADA to Its Licensees
36

Conclusion 40

**TABLE OF AUTHORITIES**

**[Cases]{.underline}**

[Aikins v. St. Helena Hospital]{.underline}, 843 F. Supp. 1329 (N.D.
Cal. 1994) 15, 18, 19, 27, 28

[Carparts Distribution Center Inc. v. Automotive Wholesalers
Association]{.underline}

[of New England]{.underline},

37 F.3d 12 (1st Cir. 1994) 15, 18, 19, 27

[Coates v. Bechtel]{.underline}, 811 F.2d 1045 (7th Cir. 1987) 38

[Denison Mattress Factory v. Spring-Air Co.]{.underline}, 308 F.2d 403
(5th Cir. 1962) 33

[Fiedler v. American Multi-Cinema, Inc.]{.underline}, 871 F. Supp. 35
(D.D.C. 1994) 16

[General Building Contractors Association v. Pennsylvania]{.underline},
458 U.S. 375 38

[Harrison v. Otto G. Heinzeroth Mortgage Co.]{.underline}, 430 F. Supp.
893 (N.D. Ohio 1977) 38

[Heights Community Congress v. Hilltop Realty, Inc.]{.underline}, 774
F.2d 135 (6th Cir. 1985) 38

[Howe v. Hull,]{.underline} 873 F. Supp. 72 (N.D. Ohio 1994) 15, 19, 27

[Johanson v. Huizenga Holdings, Inc]{.underline}., 963 F. Supp. 1175
(S.D. Fla. 1997) 21

[Kentucky Fried Chicken Corp. v. Diversified Packaging
Corp.]{.underline}, 549 F. 2d 368 (5th Cir. 1977) 33

[Kinney v. Yerusalim]{.underline}, 9 F.3d 1067 (3d Cir. 1993) 15

[Marr v. Rife]{.underline}, 503 F.2d 735 (6th Cir. 1974) 38

[Moskal v. United States]{.underline}, 498 U.S. 103 (1990) 14

[Neff v. American Dairy Queen Corp]{.underline}., 58 F.3d 1063 (5th Cir.
1995),

[cert. denied]{.underline}, 116 S. Ct. 704 (1996) 15, 16, 24, 25, 26, 27

[Paralyed Veterans of America v. D.C. Arena, L.P.]{.underline}, 117 F.3d
579 (D.C. Cir. 1997) 16

[Paralyzed Veterans of America v. Ellerbe-Becket Architects & Engineers,
P.C.]{.underline},

945 F. Supp. 1 (D.D.C. 1996) 20, 21

[Perrin v. United States]{.underline}, 444 U.S. 37 (1979) 18, 27

[Peyton v. Rowe]{.underline}, 391 U.S. 54, 65 (1968) 15

[Phiffer v. Proud Parrot Motor Hotel, Inc]{.underline}., 648 F.2d 548
(9th Cir. 1980) 38

[Rettig v. Pension Benefit Guar. Corp.]{.underline}, 744 F.2d 133 (D.C.
Cir. 1984) 15

[Sanders v. Dorris]{.underline}, 873 F.2d 938 (6th Cir. 1988) 37, 38

[Saunders v. General Svcs. Corp.]{.underline}, 659 F.2d 1042 (E.D. Va.
1987) 30

[Sheilas Shine Products, Inc. v. Sheila Shine, Inc.]{.underline}, 486
F.2d 114 (5th Cir. 1973) 33

[Smiley v. Citibank (South Dakota), N.A]{.underline}., 116 S. Ct. 1730
(1996) 15

[Smith v. United States]{.underline}, 508 U.S. 223 (1993) 27

[Taco Cabana International, Inc. v. Two Pesos, Inc.]{.underline}, 932
F.2d 1113 (5th Cir. 1991),

[cert. granted in part]{.underline}, 502 U.S. 1071 (1992) 33

[Tcherchepnin v. Knight]{.underline}, 389 U.S. 332 ( 1967) 15

[United States v. L&H Land Corp.]{.underline}, 407 F. Supp. 576 (S.D.
Fla. 1976) 38

[United States v. Real Estate Devel. Corp.]{.underline}, 347 F. Supp.
776 (N.D. Miss 1972) 38

[Walker v. Crigler]{.underline}, 976 F.2d 900 (4th Cir. 1992) 38

[Zuch v. Hussey]{.underline}, 394 F. Supp. 1028 (E.D. Mich. 1975) 30

**[Statutes]{.underline}**

15 U.S.C. §§ 1051, 1061, and 1127 33

42 U.S.C. § 1981 29

42 U.S.C. § 3604 16, 17, 18, 38

42 U.S.C. § 12101(a)(5) 3

42 U.S.C. § 12101(b)(1) 3

42 U.S.C. §§ 12111-12117 12

42 U.S.C. § 12146 14

42 U.S.C. § 12181(2) 11

42 U.S.C. § 12181(7) 11

42 U.S.C. § 12181(9) 3

42 U.S.C. § 12182 3, 10, 18, 28

42 U.S.C. § 12183 passim

42 U.S.C. § 12183(a) 3, 9, 11, 13

42 U.S.C. § 12186(b) 3

**[Regulations and Technical Assistance Manuals]{.underline}**

28 C.F.R. Part 36, Appendix A 4

U.S. Department of Justice, Civil Rights Division, Public Access
Section,

[The Americans with Disabilities Act Title III Technical Assistance
Manual]{.underline} 23

**[Legislative History]{.underline}**

H.R. 2273 18

H.R. Rep. 485, Part 2, 101st Cong. 2d Sess. (1990) 12, 13, 28, 37

H.R. Rep. 485, Part 3, 101st Cong., 2d Sess (1990) 3, 16, 18, 19, 20

S. Rep. 116, 101st Cong., 1st Sess. (1989) 18

**[Miscellaneous]{.underline}**

[Blacks Law Dictionary]{.underline} 984 (5th ed. 1979) 18

Robert G. Schwemm, [Housing Discrimination Law and
Litigation]{.underline} 16

[Websters II New Riverside University Dictionary]{.underline} at 823
(1988) 18

## 

## INTRODUCTION

Defendants Days Inns of America, Inc. and HFS Incorporated
(collectively, "DIA")[^1] operate a nationwide system of hotels called
"Days Inns." Although Section 303 ("§ 303\") of the Americans with
Disabilities Act ("ADA"), 42 U.S.C. § 12183, requires that all newly
constructed hotels be readily accessible to, and usable by, individuals
with disabilities, and although DIA plainly knew of this requirement, it
is undisputed that many newly constructed Days Inns, including the Days
Inn in Hazard, Kentucky, fail to comply with this law. DIA participated
in the design and construction of these nonaccessible hotels and has
profited from them, but argues that it should have no responsibility
whatsoever under the ADA for its role in their design and construction.
DIA asserts, instead, that only the local owner should be held
liable:[^2] that the national franchisor that established the design and
construction requirements for these nonaccessible hotels, reviewed and
approved the architectural plans for these nonaccessible hotels, and
monitored and inspected the construction of these nonaccessible hotels
should not. DIA asks the Court to exempt it from liability because: (1)
franchisors are allegedly not covered by the new construction provisions
of § 303, (2) imposing ADA liability on franchisors would allegedly be
inconsistent with the legislative history of the ADA and allegedly makes
no sense, (3) DIA allegedly does not control the operations of the
Hazard Days Inn, or any other newly constructed Days Inn, and (4) DIA
has allegedly delegated the duty to comply with the ADA to its
franchisees through the terms of its license agreements.

As the United States shows in this Memorandum and will show further in
its motion for summary judgment,[^3] the language of § 303 is broad, and
Congress plainly did not intend liability under it to be limited to
persons who own, lease, or operate a facility, as DIA contends. And,
contrary to DIA's assertions, interpreting the ADA to cover franchisors
makes more sense and is far more consistent with the ADA's legislative
history and with Congress' stated goal of making all new construction
accessible to persons with disabilities than DIA's narrow
interpretation, which would exclude from coverage not only franchisors
but also those who are most able to ensure ADA compliance ---
[e.g.]{.underline}, architects and building contractors. In addition,
notwithstanding DIA's protestations to the contrary, the undisputed
facts show that DIA controls the operations of the Hazard Days Inn.
Thus, even if DIA's limiting interpretation of § 303 were correct, DIA
is nonetheless liable for ADA violations at the Hazard Days Inn and
other newly constructed Days Inns because it controls the operations of
those nonaccessible hotels. And, finally, DIA cannot escape liability
under a federal civil rights law such as the ADA by delegating the duty
to comply with the law to someone else. Thus, whether or not DIA looks
to its franchisees to ensure that its newly constructed hotels comply
with the requirements of § 303, DIA is nonetheless still liable for
violations of § 303 that have occurred at newly constructed Days Inns

## COUNTERSTATEMENT OF THE CASE

> A. The ADA Requires That All Newly Constructed Hotels Be Accessible to
> Persons with Disabilities.

The ADA was enacted in 1990 to provide \"a clear and comprehensive
national mandate for the elimination of dis­crim­ination against
individuals with disabilities.\" 42 U.S.C. § 12101(b)(1). It is broad
civil rights legislation: it makes discrimination against persons with
disabilities illegal in employment, programs and services provided by
state and local governments, transportation, telecommunications, and
public accommodations and commercial facilities. In enacting the ADA,
Congress specifically found that individuals with disabilities
\"continually encounter\" discrimination in the form of architectural
barriers to access. 42 U.S.C. § 12101(a)(5). To redress this type of
discrimination, Congress required some barrier removal in existing
places of public accommodation.[^4] But for new buildings, Congress set
more stringent requirements, mandating that all commercial facilities
and public accommodations completed after January 26, 1993, be \"readily
accessible to and usable by\" individuals with disabilities. 42 U.S.C. §
12183(a). Congress intended strict compliance with these new
construction requirements. As the legislative history makes clear,

> \[t\]he ADA is geared to the future --- the goal being that, over
> time, access will be the rule rather than the exception. Thus, the
> bill only requires modest expenditures to provide access in existing
> facilities, [while requiring all new construction to be
> accessible]{.underline}.

H.R. Rep. 485, Part 3, 101st Cong., 2d Sess. 63 (1990) (emphasis added).
To achieve this goal, Congress required that all newly constructed
facilities be designed and constructed according to architectural
standards set by the Attorney General. 42 U.S.C. §§ 12183(a), 12186(b).
These Standards for Accessible Design, 28 C.F.R. Part 36, Appendix A
(the "ADA Standards\"), are incorporated into the Department of
Justice's regulations implementing Title III of the ADA. They set many
requirements for newly constructed hotels, including require­ments
applying to all areas of the hotel, from parking lots and exterior
walkways to entrances, lobbies, interior stairs, corridors, and guest
rooms.

**B. The Hazard Days Inn and Other Newly Constructed Days Inns Are Not
Accessible to Individuals with Disabilities**.

It is uncontested that the Hazard Days Inn and thirteen other newly
constructed Days Inns across the country fail to comply with the ADA
Standards. [See]{.underline} Report by Bill Hecker, AIA ("Hecker
Report"),[^5] Exh. 7; Deposition of Harold Kiewel, Exh. 15, at 9-11, 61.
These hotels were designed and constructed with violations of the ADA
Standards occurring in every area of the facility, from the parking
lots, walkways, and entrances, to lobbies, other public and employee
areas, guest rooms, and guest bathrooms. [See]{.underline} Hecker
Report, Exh. 7.

**C. DIA and HFS Had Extensive Control Over, and Involvement in, the
Design and Construction of these Nonaccessible Hotels.**

As will be shown more fully in the United States' motion for summary
judgment, DIA had extensive control over, and involvement in, the design
and construction of the Hazard Days Inn and other newly constructed Days
Inns that violate the ADA Standards. The license agreement (the "L.A.")
covering the Hazard Days Inn gave DIA extensive control over the design
and construction of that hotel. For instance, the L.A. set several
design features of the hotel ([e.g.]{.underline}, number of rooms and
parking spaces), set the dates by which hotel construction had to begin
and end, and required Hazard Management Group, Inc.[^6] ("HMGI") to
obtain DIA's approval of any delay in the construction schedule. L.A.,
Exh. 3, at ¶ 3, HAZ 1216-18, Schedule B at HAZ 1246, and Amendment to
L.A. at HAZ 1252. The L.A. further required HMGI to prepare
architectural plans for the hotel that conformed to Days Inn Design
Standards --- hundreds of detailed design and construction requirements
which are set forth in comprehensive detail in DIA's Planning and Design
Standards Manual ("PDSM")[^7]. --- and required HMGI to submit its plans
to DIA for DIA's review and approval before beginning construction.
L.A., Exh. 3, at ¶ 3, at HAZ 1216-1217; PDSM, Exh. 4, at §§ 3.01 through
10.07. It also required HMGI to construct the hotel in accord with the
plans approved by DIA, and to obtain DIA's written approval of any
changes to those plans. L.A., Exh. 3, at HAZ 1216-1217. The L.A. further
provided that DIA had the right to inspect the construction during the
course of the project and after its completion for compliance with the
approved construction plans and DIA Design Standards. [Id]{.underline}.
Under the L.A., DIA also reserved the right to require HMGI to make
modifications specified by DIA prior to opening. [Id]{.underline}. at
HAZ 1217-18. Finally, the L.A. proscribed HMGI from opening and
operating the hotel until after DIA certified that the hotel was
acceptable to DIA. [Id]{.underline}. DIA's control over the design and
construction of the Hazard Days Inn, as reflected in the L.A., is
typical of its control over the design and construction of other newly
constructed Days Inns. [See]{.underline} DIA's standard form of license
agreement, Exh. 2, at ¶ 3, at DIA 246-47, 274.

In addition to the control over the design and construction of the
Hazard Days Inn that DIA reserved to itself in the L.A., DIA involved
itself in the project in a variety of other ways as well. Among other
things, Mike Burgess, a DIA Franchise Sales Manager, selected the site
on which the Hazard Days Inn was constructed.[^8] Mr. Burgess then
introduced the owner of the site to Wilgus Napier, a principal of a
general contracting firm, who had constructed other Days Inn hotels and
who operated a Days Inn in Berea, Kentucky. Deposition of Wilgus Napier,
Exh. 8, at 70; Burgess Dep., Exh. 44, at \_\_\_. The plans that Mr.
Napier used to construct the Hazard Days Inn had previously been used to
construct the Berea Days Inn and were purchased from a DIA broker.
Napier Dep., Exh. 8, at 30-31, 37-39, 48; Deposition of J. Douglas Kidd,
AIA, Exh.9, at 42-43. Before construction of the Hazard Days Inn began,
DIA reviewed and approved the architectural plans for the hotel,
annotating the plans with recommended changes relating to compliance
with DIA's Design Standards, compliance with a safety requirement of a
model building code, compliance with industry standards for lamps, and
an accessibility requirement for a public toilet room[^9]. The
contractor incorporated DIA's revisions to the architectural plans into
the construction of the hotel. Napier Dep., Exh. 8, at 55-56. Once
construction was completed but before the hotel opened, a DIA
representative toured the property, inspecting the exterior and interior
of the hotel. Deposition of James Stansburry, Exh. 13, at 71-72,
107-111; Recap of Property Training at Hazard Days Inn, Exh. 23. Since
then, DIA has inspected the property at least three times a year as part
of its Quality Assurance ("QA") program. Keeble Dep., Exh. 11, at 297;
QA Forms for the Hazard Days Inn, Exh. 40. Among other things, the QA
inspections check for compliance with the Days Inn Design Standards,
including some accessibility requirements.^1^[^10] DIA's involvement in
the design and construction of the Hazard Days Inn is typical of its
involvement in the design and construction of other Days Inns.^1^[^11]

D. DIA Controls the Operations of the Hazard Days Inn and Other Newly\
Constructed Hotels in the Days Inn System.

As will be shown more fully in the United States' motion for summary
judgment, DIA also controls the operations of the Hazard Days Inn and
other newly constructed hotels in the Days Inn system. The L.A. provides
that the Hazard Days Inn must be operated in accordance with DIA's
System Standards. L.A., Exh. 3, at ¶ 5, at 1280, ¶16(c), at 1228; Keeble
Dep., Exh. 11, at 126-129. And, DIA sets thousands of detailed System
Standards governing the operation of the Hazard Days Inn in its System
Standards Manuals and other manuals.^1^[^12] The System Standards apply
to all aspects of hotel operations, such as the times that the front
desk must remain open, the forms of payment that the hotel must accept,
the number of matches that a Days Inn franchisee must place in the
ashtray of a guest room; the weight, fiber content, dimension, and
permissible shrinkage for towels; and the number and types of hangers
kept in the closet of each guest room.. OPM, Exh. 5, Appendix B, at 14,
16, 51-52. To ensure compliance with System Standards, DIA provided
training on them to the general manager and certain staff of the Hazard
Days Inn and reserved the right in theL.A. to enforce its System
Standards by conducting QA inspections of the Hazard Days Inn --- a
right that DIA exercises at least three times each year.^1^[^13] If HMGI
does not comply with DIA's System Standards, including QA system
requirements, DIA has the right under the L.A. to remove the Hazard Days
Inn from DIA's central reservations system or to terminate the L.A. and
force HMGI to close the Hazard Days Inn. L.A., Exh. 3, at ¶ 10, at HAZ
1222, at ¶ 19, at HAZ 1231; Keeble Dep., Exh.11, at 292-294; Napier
Dep., Exh.8, at 96-98. [See also]{.underline} 1993 Uniform Franchise
Offering Circular ("UFOC"), Exh. 1, at 46 (identifying number of hotels
terminated from DIA system for failure to comply with QA standards). If
a QA inspection reveals that alterations are needed to the hotel's
design and construction, DIA has the right under the L.A. to require
HMGI to make those modifications. L.A., Exh. 3, at ¶ 16(d), at HAZ 1229.
Thus, DIA exercises control over the operations of the Hazard Days Inn,
through the L.A., through its System Standards, and through its training
and QA programs.

DIA controls the operations of the Hazard Days Inn in other ways as
well: it operates a national reservations system that accounts for
25-30% of the bookings at the hotel; it operates a centralized system
for responding to guest complaints; it approves the suppliers that HMGI
can use to purchase certain products; and it implements national
marketing programs in which the Hazard Days Inn must participate. Keeble
Dep., Exh. 11, at 179-180; L.A., Exh. 3, at ¶ 10, at HAZ 1222, ¶ 11, at
1223-1224, at ¶ 15, at 1227-1228; OPM, Exh. 5, at 14-15, 25, 103; Napier
Dep., Exh. 8, at 149-152. This control that DIA exercises over the
operations of the Hazard Days Inn is typical of the control that DIA
exercises over the operations of other newly constructed Days
Inns.^1^[^14]

**ARGUMENT**

**A. Section 303 of the ADA Is a Broad Prohibition of the Design and
Construction of\
Public Accommodations and Commercial Facilities That Are Not Accessible
to Individuals with Disabilities.**

Section 303 prohibits discrimination against individuals with
disabilities in the design and construction of public accommodations and
commercial facilities. It provides:

> § 303. New Construction and Alterations in Public Accommodations and
> Commercial Facilities.
>
> \(a\) Application of Term. Except as provided in\
> subsection (b),^1^[^15] as applied to public accommodations\
> and commercial facilities, discrimination for purposes of section
> 302(a) of this title includes (1) a failure to design and construct
> facilities for first occupancy later than \[January 26, 1993\], that
> are readily accessible to and usable by individuals with
> disabilities\....

42 U.S.C. § 12183(a). Section 303 defines a discriminatory activity ---
the design and construction of inaccessible facilities --- and makes it
illegal to engage in that activity. It does not contain any limitation
on the parties who may be held liable under its terms. Thus, any party
who engages, or is involved, in the design and construction of an
inaccessible public accommodation or commercial facility has performed
an illegal activity, and violates § 303 of the ADA.

Liability under § 303 is broad but not unlimited. It depends on the
facts of each case. In particular, liability under § 303 depends on
three factual inquiries: (1) whether the facility in question is readily
accessible to and usable by individuals with disabilities; (2) whether
the party in question participated in the design and construction of
that facility; and (3) whether the party's participation included
participation in the design and construction of some portion of the
facility that

fails to comply with the ADA Standards. Put differently, the scope of a
party's responsibility under § 303 is commensurate with the scope of
that party's involvement in the design and construction of the
facility.^1^[^16] Thus, a plumbing subcontractor whose work was limited
to a facility's toilet room would be liable only for violations of ADA
Standards occurring within the scope of its involvement
([i.e.]{.underline}, in the toilet room) --- not for violations in the
hotel's parking lot. By contrast, a contractor who paved a hotel parking
lot might be liable for violations of the ADA Standards in the parking
lot, but not those in the hotel toilet room.

DIA contends that the test for liability under § 303 is "so amorphous as
to be no test at all."^1^[^17] But the test is not amorphous --- it is a
very concrete test that is based on an entity's actual involvement in
the design and construction of a facility. When the facts of a
particular case are considered, the test for liability under § 303 is
definite and easy to apply.

**B. Liability Under Section 303 Is Not Limited to Owners, Lessors,
Lessees, and Operators of Public Accommodations and Commercial
Facilities.**

In addition to § 303\'s new construction requirements, title III of the
ADA also contains a general rule prohibiting discrimination by public
accommodations, which is contained in § 302 of the ADA. It provides:

> § 302. Prohibition of Discrimination by Public Accommodations.
>
> \(a\) General Rule. No 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. Thus, liability for violation of Section 302 is
limited to "any person who owns, leases (or leases to), or operates a
place of public accommodation." [Id]{.underline}.

Unlike § 302, § 303 does not contain any language limiting liability to
persons who own, lease (lease to), or operate a place of public
accommodation. But § 303 does contain a reference to 302(a), and DIA
contends that this reference is intended to identify who is liable under
§ 303 much in the same way as Congress identified who is liable under §
302 --- [i.e.]{.underline}, by restricting liability to "any person who
owns, leases (or leases to), or operates a place of public
accommodation" or commercial facility. But a limitation of that kind
would be inconsistent with the language and structure of the statute and
with Congress' stated intent in enacting § 303.

1\. The Scope of § 303 is Broader, and Was Intended to Be Broader, Than
the\
Scope of § 302.

Unlike § 302, which applies only to public accommodations, § 303 applies
to two types of facilities: \"public accommodations\" and \"commercial
facilities.\" 42 U.S.C. § 12183(a). The ADA defines \"public
accommoda­tions\" as entities (1) whose operations affect commerce, and
(2) that fall into one or more of twelve categories of public
accommodations set out in the Act. 42 U.S.C. § 12181(7). This is a broad
definition that includes hotels, bars, restaurants, stadiums, theaters,
shopping malls, doctors' and lawyers' offices, museums, zoos, and many
other facilities that provide goods or services to the public.

Although "public accommodations" has been defined broadly in the ADA,
the term "commercial facilities has been given a still broader
definition. "Commercial facilities" are all facilities intended for
non-residential use whose operations affect commerce. 42 U.S.C.\
§ 12181(2).^1^[^18] While "commercial facilities" obviously include many
facilities that are "public accommodations,"^1^[^19] they also include
many facilities that are not "public accommodations," such as factories,
warehouses, many office buildings, and other buildings in which
employment may occur. Congress chose this expansive coverage of
commercial facilities deliberately. Lawmakers recognized that even
though employees at commercial facilities would be protected by title I
of the ADA, 42 U.S.C. §§ 12111-12117 (which requires private employers
to make reasonable accommodations for employees with disabilities), it
nonetheless made sense to impose a blanket requirement for architectural
accessibility on facilities that were potential places of employment,
but were not places of public accommodation. As the House Committee on
Education and Labor stated,

> \[t\]o the extent that new facilities are built in a manner that
> make(s)them accessible to all individuals, including potential
> employees, there will be less of a need for individual employers to
> engage in reasonable accommodation to particular employees.

H.R. Rep. 485, Part 2, 101st Cong., 2d Sess. 117 (1990).

Because § 303 expressly applies to commercial facilities in addition to
places of public accommodation, it would plainly be inconsistent with
the language of § 303 to incorporate language from § 302 that limits
liability to "any person who owns, leases (or leases to), or operates a
place of public accommodation." Under such a reading, the
[only]{.underline} people who could be held liable for design and
construction violations of [commercial facilities]{.underline} would be
those who own, lease, or operate [public accommodations]{.underline}.
Thus, for all commercial facilities that are not places of public
accommodation --- [e.g.]{.underline}, factories, warehouses, and many
office buildings --- no one would meet this definition and,
consequently, no one could be held account­able for ADA violations at
those facilities. Such a result contradicts the language of § 303 that
explicitly includes \"commercial facilities\" within the scope of the
new construction requirements as well as Congress' stated intention of
ensuring that [all]{.underline} new commercial facilities be covered by
the ADA's requirements for new construction. As the report of the House
Committee on Education and Labor explains:

> In many situations, the new construction will be covered as a \"public
> accommodation,\" because in many situations it will already be known
> for what business the facility will be used. The Act also includes,
> however, the phrase \"commer­cial facilities,\" to ensure that
> [all]{.underline} newly constructed commercial facilities will be
> constructed in an accessible manner. That is, the use of the term
> \"commercial facili­ties\" is designed to cover those structures that
> are not included within the specific definition of \"public
> accommodation.\"

H.R. Rep. 485, Part 2, 101st Cong., 2d Sess. 116 (1990) (emphasis in
original).

A House Judiciary Committee amendment moving the requirement for
accessible alterations from § 302 to § 303 provides further evidence
that Congress intended §303 to have a broader scope of coverage than §
302. As the Committee Report explains:

> \[t\]he Committee adopted an amendment to move the section governing
> alterations for existing facilities from Section 302(b)(2)(vi), which
> only covered public accommodations, to Section 303 which covers both
> public accommodations and commercial facilities\..... [If a business
> is going to build a new building or engage in alterations, the access
> requirements apply]{.underline}.

H.R. Rep. 485, Part 3, 101st Cong., 2d Sess. 63 (emphasis
added).^2^[^20] The Committee clearly understood that § 303 covered a
wider universe than § 302 and wanted to ensure that the requirements for
alterations, like those for new construction, applied to the many office
buildings, factories, warehouses, and other potential places of
employment that are not covered by § 302. As the Committee noted,

> if alterations were not included in Section 303, governing commercial
> facilities, the anomalous situation could arise of a new accessible
> building being renovated to include barriers to access.

[Id]{.underline}.

Thus, contrary to DIA's assertions, there can be little question that
Congress deliberately chose to draft §§ 302 and 303 differently, and
intended them to apply to different kinds of activities, different
categories of facilities, and different parties.^2^[^21] Accordingly,
the reading of § 303\'s reference to § 302(a) that is most consistent
with the language of the statute and congressional intent is that § 303
refers to § 302(a) for the sole purpose of indicating that the failure
to design and construct accessible facilities constitutes another type
of \"discrimination on the basis of disability,\" and [not]{.underline}
to identify the parties that may be held liable under § 303. Unlike
DIA's proposed interpretation of § 303, this interpretation gives full
effect to all of the terms of the provision.^2^[^22] [See]{.underline}
[Moskal v. United States]{.underline}, 498 U.S. 103, 109-10 (1990)
(courts should interpret statutes in a manner that gives effect to every
clause and word of the statute) (quoting [United States v.
Menasche]{.underline}, 348 U.S. 528, 538-39 (1955) (same)).^2^[^23]

2\. Limiting § 303\'s Coverage to Persons Who Own, Lease, or Operate a
Facility Would Frustrate Congress\' Purpose in Enacting the ADA.

Under well-established canons of statutory construction, in addition to
examining the text of the statute, the Court must also look to the
statute's remedial purposes and construe the text in a way that will
allow it to achieve those purposes.^2^[^24] Limiting the coverage of §
303 as DIA suggests would greatly diminish § 303\'s effectiveness in
achieving Congress\' stated purpose of ensuring that [all]{.underline}
new facilities are designed and constructed to be accessible, and result
instead in a great many more inaccessible buildings.

To be fully effective, the ADA\'s new construction obligation must apply
not only to the parties who own, lease, or operate the facility in
question, but also to all of the parties involved in its design and
construction. If all parties who engage in the illegal activity --- the
design and construction of inaccessible buildings --- are held liable
for doing so, the level of compliance with the statute will be
considerably higher than it would be if only some of those parties are
held accountable.^2^[^25] And Congress certainly did not wish to create
a scheme under which compliance will be achieved only as a result of
costly litigation. Such a scheme would burden not just individuals with
disabilities and the courts, but the rest of society as well, when
construction is halted, or a facility is shut down, for the purpose of
retrofitting it to comply with ADA Standards.

The intent of the statute cannot be fully realized unless it is read the
way Congress drafted it: § 303 simply identifies a prohibited activity
without limiting those parties who may be held liable for engaging in
it. Thus, there are incentives for all people who are involved in the
design and construction of a new building --- [e.g.]{.underline},
owners, architects, engineers, interior designers, builders, and
franchisors --- to ensure that it complies with ADA Standards.

Indeed, Congress has used the same approach to redress discrimination in
other civil rights statutes. Congress has not placed responsibil­ity on
only some of the parties engaged in the activity in question; instead,
it has crafted statutes more broadly to prohibit discriminatory conduct
by all parties involved. Put differently, it is a basic tenet of our
civil rights law that one party is not free to discriminate just because
another party somewhere down the line may be held liable for that
discrimination. For example, the Fair Housing Act makes a variety of
activities illegal without limiting the parties who may be held
responsible for engaging in them.^2^[^26] Indeed, § 303 of the ADA
mirrors a provision in § 804 of the Fair Housing Act, a provision which
identifies an illegal activity --- the design and construction of
inaccessible housing facilities --- but does not specify or limit the
parties that may be held liable for it.^2^[^27] In modeling § 303 of the
ADA on § 804(f)(3)(C) of the Fair Housing Act, Congress clearly chose to
approach the design and construction of inaccessible public
accommodations and commercial facilities in the same way that it had
approached the design and construction of inaccessible housing
facilities: it has simply specified an illegal activity --- the design
and construction of inaccessible facilities --- but has not limited that
prohibition to allow some parties, but not others, to discriminate in
that way. Since Congress specifically "invoked the sweep of its
authority" to establish a "clear and comprehensive national mandate" to
eliminate discrimination against individuals with disabilities when it
enacted the ADA, it is not surprising that Congress chose to draft § 303
so broadly.

> **3. DIA's Account of the Legislative History of § 302 and § 303 Is
> Misleading.**

DIA suggests that § 303 should be read to incorporate limiting language
from § 302 because, at an early stage of the drafting process, the
nondiscrimination requirements of § 302 and § 303 were both contained in
one section. But DIA's tortured tracing of the legislative history fails
to highlight for the Court that Congress intentionally separated § 302
and § 303 to retain broad coverage in § 303 while limiting the coverage
of § 302.

In early versions of the ADA, the accessibility requirements for
existing facilities that are now in § 302 and the accessibility
requirements for new construction that are now in § 303 were included in
what was then § 402. Section 402 set forth the "general rule" that
"\[n\]o individual shall be discriminated against in the full and equal
enjoyment of the goods, services, facilities, privileges, advantages,
and accommodations of any place of public accommodation, on the basis of
disability." But, in those bills, the term "public accommodation" was
defined to include both places used by the general public as customers,
clients, or visitors, and potential places of employment. S. 933 at §
401(2)(A); H.R. 2273 at § 401(2)(A). Although DIA fails to highlight it
for the Court, at the time that the precursors to §§ 302 and 303 were
together in § 402, neither bill contained any language specifying that
only the owners, operators, lessors, or lessees of the covered
facilities could be held liable for violations.

When the legislation was amended later that year, the obligations for
existing facilities were left in § 302 of the bill,^2^[^28] but the
requirements for new construction were moved to a new section ---
[i.e.]{.underline}, § 303. [See]{.underline} S. Rep. 116, 101st Cong.,
1st Sess. 58-60, 68-69 (1989). At the same time, Congress limited the
coverage of § 302 by removing "potential places of employment" from the
definition of "places of public accommodation." [Id]{.underline}. at
58-59. By contrast, new § 303 was made applicable to both places of
public accommodation (as redefined) and potential places of employment.
[Id]{.underline}. at 68-69. However, there was still no language in §
302 or § 303 specifying the parties who would be liable for violations.

It was not until the next year, shortly before the ADA was finally
adopted, that the language in § 302 concerning "privately operated
entities" was replaced with the final language regarding entities who
"own, lease (or lease to), or operate" public accommodations.
[See]{.underline} H.R. Rep. 485, Part 3, 101st Cong. 2d Sess. 11 (1990).
Significantly, this new language was added [only]{.underline} to § 302,
and [not]{.underline} to § 303. The change in the language of § 302 was
specifically intended to clarify that the parties covered by § 302 were
not only those who operated public accommodations, but also those who
owned and leased them. As the House Committee on the Judiciary
explained:

> This amendment makes it clear that the owner of the building which
> houses the public accommodation, as well as the owner or operator of
> the public accommodation itself, has obligations under this Act. For
> example, if an office building contains a doctor's office, both the
> owner of the building and the doctor's office are required to make
> readily achievable alterations. It simply makes no practical sense to
> require the individual public accommodation, a doctor's office for
> example, to make readily achievable changes to the public
> accommodation without requiring the owner to make readily achievable
> changes to the primary entrance to the building.

[Id]{.underline}. at 55-56.

At the same time that the owns, operates, or leases language was added
to limit coverage of § 302 to places of public accommodation, § 303 was
also amended. Its coverage, which previously had included public
accommodations and "potential places of employment," was redefined to
include public accommodations and "commercial facilities,"^2^[^29]
expressly rejecting the limitations imposed on § 302. Moreover, unlike
§302, no language was added to § 303 to indicate that those who own,
operate or lease the facilities in question were the only parties who
were accountable under § 303. Certainly, if Congress had wished to
specify the parties covered by § 303 in the same manner that it
specified the parties covered by § 302, it could have done so at the
same time that it "clarified" and limited the coverage of § 302. Indeed,
Congress made another amendment showing that it intended coverage under
§ 302 and § 303 to differ. As the House Judiciary Committee report
explains,

> \[t\]he Committee adopted an amendment to move the section governing
> alterations for existing facilities from Section 302(b)(2)(vi), which
> only covered public accommodations, to Section 303 which covers both
> public accommodations and commercial facilities.

[Id]{.underline}. at 63.^3^[^30] In sum, contrary to DIA's assertions,
there can be little question that Congress deliberately chose to draft §
302 and § 303 differently. Thus, the Court should not adopt DIA's
revisionist view of legislative history and impose limitations on § 303
that Congress chose not to include.

**4. Two Other Courts Have Addressed the Scope of § 303 and Reached
Opposite Conclusions.**

Two federal district courts have considered the proper scope of § 303's
coverage and come to different conclusions. The first case addressing
the issue was [Paralyzed Veterans of America v. Ellerbe Becket
Architects & Engineers, P.C.]{.underline}, 945 F. Supp. 1 (D.D.C. 1996).
In [PVA]{.underline}, the court dismissed § 303 claims against the
architectural firm that designed an arena on the grounds that § 303\'s
reference to § 302 limits the parties responsible for complying with §
303 to those who own, lease, or operate the facility. But the
[PVA]{.underline} opinion is not persuasive. Its central flaw is that it
does not explain why § 303, which plainly applies to public
accommodations [and]{.underline} commercial facilities, should be
limited to parties who own, lease, or operate public accommodations.
Rather, the court simply states that \"the limitation in § 302 to
owners, operators, and lessors also applies to § 303 and thereby
excludes architects . . . .\" [Id]{.underline}. at 2. But since § 302
applies only to owners, operators, and lessors of [public
accommodations]{.underline} and not to commercial facilities at all,
this analysis leads to the patently incorrect result of virtually
eliminating cover­age of strictly commercial facilities from the ADA's
new construction requirements.

In addition, the [PVA]{.underline} court erred when it assumed, without
explanation, that the aims of the statute could effectively be achieved
even if owners of new facilities were the only ones responsible for ADA
compliance. [Id]{.underline}. As discussed above, however, limiting the
scope of § 303 to owners, operators, lessors and lessees of public
accommodations would mean that the aims of § 303 would only be achieved
as a result of a multitude of legal actions to compel retrofitting of
facilities designed and constructed to be accessible --- which, as
previously noted, was a prospect Congress intended to avoid.

Much more persuasive is the ruling of the court in [Johanson v. Huizenga
Holdings, Inc.]{.underline}, 963 F. Supp. 1175 (S.D. Fla. 1997), another
action alleging that architects were violating § 303 by designing a new
arena to be inaccessible to individuals with disabilities. Again, the
architects moved to dismiss the § 303 claims on grounds that they did
not own, operate, or lease the facility. The [Johanson]{.underline}
court recognized that if the reading advanced by the architects were
correct, coverage of commercial facilities would effectively be
eliminated from § 303. The court noted that, under a reading that
limited liability to persons who own, lease, or operate a facility, "it
is conceivable that no entity would be liable for construction of a new
commercial facility which violates the ADA.\" [Id]{.underline}. at 1178.
Accordingly, the [Johanson]{.underline} court denied the architects'
motion to dismiss.^3^[^31]

Thus, the Court should reject the approach taken by the
[PVA]{.underline} court, which is advanced by DIA, and follow the lead
of the [Johanson]{.underline} court instead, since it is more consistent
with the language of the statute, the legislative history of the
statute, and Congress' express intent of ensuring that all new buildings
are accessible.

> **5. The Department of Justice's Interpretation of Section 303 Is
> Entitled To Deference.**

At the same time as it suggests that its reading of § 303 is compelled
by the \"plain language\" of the statute,^3^[^32] DIA also attempts to
avoid the \"plain language\" of the statute. DIA passes over the fact
that the language it would like to incorporate into § 303
([i.e.]{.underline}, person who owns, leases (or leases to), or operates
a place of public accommodation [or commercial facility]{.underline}) is
not the actual language of § 302 ([i.e.]{.underline}, "person who owns,
leases (or leases to), or operates a place of public accommodation").
Simply stated, the language that DIA wishes to import into § 303 from §
302 contains no references to commercial facilities or to the persons
who own, operate, or lease them. DIA suggests that the language of §
302(a) should not be read as written, but that it should be modified so
as \"to apply Section 303 only to parties who own, operate, or lease [a
covered facility]{.underline}.\" [Id]{.underline}. at 15. Later, DIA
suggests that what § 302(a) really means is that the parties who are
covered are the \"owners, lessors, and lessees [of the physical
location]{.underline}, in addition to operators.\" [Id]{.underline}. at
18. DIA thus attempts to convince the Court to adopt its interpretation
of § 303 by twisting the \"plain language\" of § 302 to include
additional parties.

DIA's approach to statutory interpretation implicitly suggests that the
language of § 303 is ambiguous.^3^[^33] Indeed, since § 303 itself does
not identify who the responsible parties are, and since the limitation
on responsible parties contained in § 302 is incompatible with the
express language of § 303, one might argue that the language of the
statute itself does not clearly answer the question of who is
responsible for compliance with § 303. In such a case, of course, the
interpretation of the statute by the agency entrusted with enforcement
of the statute is entitled to substan­tial deference. [Chevron, U.S.A.,
Inc. v. Natural Resources Defense Council, Inc.]{.underline}, 467 U.S.
837, 843 (1984) (where Congress has not directly addressed the precise
question at issue, \"considerable weight should be accorded to an
executive department\'s construction of a statutory scheme it is
entrusted to administer\"); [Teichman v. Espy]{.underline}, \_\_\_ F.3d
\_\_\_, No. 95-2168, 1997 WL 458680 (6th Cir. Aug. 13, 1997) (holding
that where a statute is silent or ambiguous on a given issue, "'\[a\]n
agency's interpretation of a statutory scheme that it is entrusted to
administer is entitled to a degree of deference,' \... and we will
uphold that construction if it is reasonable.")(quoting [Gallagher v.
Croghan Colonial Bank]{.underline}, 89 F.3d 275, 277 (6th Cir. 1996, and
citing to [Chevron]{.underline}, [supra]{.underline}).

As the agency charged with enforcing title III of the ADA, the
Department of Justice has taken the position that all parties involved
in the design and construction of new facilities must conform their
involvement, whatever its scope, to the requirements of § 303, and that
the parties who can be held accountable for violations of § 303 are not
limited to owners, lessors, lessees, or operators of the facility.
[See]{.underline}, [e.g.]{.underline}., U.S. Department of Justice,
Civil Rights Division, Public Access Section, [The Americans with
Disabilities Act Title III Technical Assistance Manual]{.underline},
Covering Public Accommodations and Commercial Facilities, November 1993,
§ III-5.1000 at 46.^3^[^34] Thus, the Department's interpretation of §
303 is entitled to substantial deference in this Court.

Accordingly, the Court should resist DIA's urgings to the contrary and
rule that liability under § 303 is not limited to those who own, lease
(or lease to), or operate facilities. It should hold, instead, that all
parties that are involved in the design and construction of a place of
public accommodation or commercial facility are responsible for
complying with § 303 and, thus, are liable for violating § 303 if they
fail to do so. Finally, the Court should deny DIA's motion for summary
judgment, since the undisputed facts show that DIA was involved in the
design and construction of the Hazard Days Inn and other Days Inns that
are not accessible to individuals with disabilities.

**C. Even if § 303 Were Limited as DIA Suggests, DIA Is Still Liable
Because It Operates the Hazard Days Inn and Other Newly Constructed Days
Inns.**

Even if liability under § 303 were limited to the parties identified in
§ 302, which it is not, DIA is still liable for violating § 303 of the
ADA. Given the degree of control that it exercises over all aspects of
the operation of the hotels in the Days Inn System, including the Hazard
Days Inn,

DIA plainly "operates" those hotels within the meaning of § 302.

> **1.** **Contrary to DIA's Assertions, [Neff v. American Dairy
> Queen]{.underline}\
> Does Not Require a Showing of Causation.**

Despite overwhelming evidence that DIA operates the Hazard Days Inn and
other hotels in the Days Inn system, DIA mistakenly relies on [Neff v.
American Dairy Queen Corp.]{.underline}, 58 F.3d 1063 (5th Cir. 1995),
[cert. denied]{.underline}, 116 S. Ct. 704 (1996), to support its
argument that this Court should nonetheless hold that DIA does not
operate those hotels. DIA contends that, under [Neff]{.underline}, a
party cannot be liable under § 302 as an operator of a facility unless
that party caused the ADA violations that are at issue.^3^[^35] But DIA
has mischaracterized the [Neff]{.underline} holding.

In [Neff]{.underline}, the plaintiff alleged that two Dairy Queen
restaurants constructed before passage of the ADA had violated § 302(b)
of the ADA by failing to remove architectural barriers to access in an
existing facility where barrier removal was readily achievable.
[Id]{.underline}. at 1064. The plaintiff argued that the franchisor,
American Dairy Queen (\"ADQ\"), \"operated\" the restaurants, and should
therefore be held liable for the restaurants\' failures to remove the
barriers. [Id]{.underline}. at 1065. Concluding from the facts of that
case that ADQ had minimal control over the removal of structural
barriers, the Fifth Circuit held that ADQ did not operate a place of
public accommodation within the meaning of § 302 because it did not have
control over barrier removal. [Id]{.underline}. at 1066-69 (holding that
"the relevant question" in determining whether ADQ operates at the Dairy
Queen restaurants is whether ADQ "controls modification of the
\[restaurants\]"). Although the Fifth Circuit noted that ADQ had not
caused the ADA violations at issue by refusing to permit its franchisees
to remove barriers to accessibility, [id]{.underline}. at 1069 n.13, it
did not hold that the plaintiff was required to establish causation in
order to establish that the franchisor was an operator under § 302.
[Neff]{.underline} simply required a showing that the franchisor
controlled modifications to the facility --- [i.e.]{.underline}, that
the franchisee had control over the discriminatory conduct at issue in
the case.^3^[^36] Thus, under the [Neff]{.underline} test, DIA operates
the Hazard Days Inn for the purposes of § 303 if DIA had control over
the discriminatory activity at issue under § 303 --- [i.e.]{.underline},
the design and construction of the Hazard Days Inn and other newly
constructed Days Inns that do not comply with the ADA Standards. DIA
meets that test.

**2. Under the [Neff]{.underline} Test, DIA Operates the Hazard Days
Inn.**

As is shown in Section A of the Argument, and as the United States will
show in more detail in its motion for summary judgment, the undisputed
facts show that DIA exercised extensive control over the design and
construction of the Hazard Days Inn and the other hotels in its system.
DIA selected the site for the Hazard Days Inn, and referred the owner of
the site to a contractor who was experienced in constructing and
operating other Days Inns. A DIA broker sold the contractor the
architectural plans that were adapted to construct the Hazard Days Inn.
DIA reviewed the plans before construction of the Hazard Days Inn began
and made changes to them, including changes to an accessibility feature
of the hotel. The changes that DIA made were incorporated into the
design and construction of the Hazard Days Inn. DIA inspected the Hazard
Days Inn before it opened for business and had the authority to prevent
the Hazard Days Inn from opening for business for failure to comply with
DIA's Design Standards or failure to comply with federal laws. And, DIA
has the authority under the L.A. to require HMGI to make modifications
to the Hazard Days Inn and can remove the Hazard Days Inn from the
reservations system, terminate the L.A., and compel the Hazard Days Inn
to cease doing business under the Days Inn name if HMGI does not make
those modifications. Thus, under the [Neff]{.underline} test, DIA
plainly operates the Hazard Days Inn for the purposes of § 303 because
DIA exercised extensive control over the design, construction, and
modification of the Hazard Days Inn, as it does for every newly
constructed Days Inn.

**3. [Neff]{.underline} Was Wrongly Decided.**

Even though the United States has shown that DIA operates the Hazard
Days Inn for purposes of § 303 under the test established by the Fifth
Circuit in [Neff]{.underline}, there is a major flaw in the reasoning of
the [Neff]{.underline} opinion. In deciding what the term \"operate\"
means, the Fifth Circuit focused solely on the question of who has the
power or control over the ability to remove architectural barriers,
rather than the more general question of who has significant power or
control over the operations of the facility. In doing so, the
[Neff]{.underline} Court produced a rule that cannot be reconciled with
the language of the statute.

Section 302(a) of the ADA contains a broad prohibition of discrimination
by any entity that \"owns, leases (or leases to), or operates a place of
public accommodation.\" 42 U.S.C. § 12182(a). But the ADA contains no
definition of the term "operates." Under well-established canons of
statutory construction, the common meaning of the term must be used to
determine who operates a facility. [Smith v. United States]{.underline},
508 U.S. 223 (1993); [Perrin v. United States]{.underline}, 444 U.S. 37,
42 (1979).

One common dictionary defines the term to mean "to control or direct the
functioning of," "to conduct the affairs of," or "to bring about or
effect." [Webster's II New Riverside University Dictionary]{.underline}
at 823 (1988). Similarly, Black's Law Dictionary defines "operate" as
"to perform a function, or operation, or produce an effect." [Black's
Law Dictionary]{.underline} 984 (5th ed. 1979). While the
[Neff]{.underline} court purports to use the common meaning of the term
"operates," it plainly does not do so --- instead using a contrived
definition of the term that varies with the form of discrimination
alleged. Other courts confronted with this question have recognized that
§ 302 does not require an inquiry into the party's authority over the
discriminatory activity in question, but rather whether that party can
direct or control the operation of the facility itself.
[See]{.underline}, [e.g.]{.underline}, [Aikins v. St. Helena
Hosp.]{.underline}, 843 F. Supp. 1329, 1335 (N.D. Cal. 1994) (\"\[t\]he
use of language relating to ownership or operation implies a requirement
of control over the [place providing services]{.underline}.\") (emphasis
added). Indeed, the cases cited by the [Neff]{.underline} court do not
support it\'s conclusion. Instead of focusing on whether the facility
has control over the discriminatory activity, they focus instead on a
more general inquiry --- whether the entity operates the facility in
general.^3^[^37]

Thus, the Fifth Circuit's reasoning in [Neff]{.underline} is
inconsistent with the language of the statute and contrary to the
majority of case law on the issue. This Court should follow the lead of
the majority of courts that have considered the issue, apply a general
definition to the term operates, and reject the holding of the
[Neff]{.underline} court and its contrived definition of the term
operates. While the choice of definition makes no difference to the
outcome of this case, since DIA operates the Hazard Days Inn under any
reasonable definition of the term, the Court should construe the statute
as written --- not as DIA wishes the statute were written.

> **4. The Undisputed Evidence Shows That DIA Operates the Hazard Days\
> Inn and Other Newly Constructed Days Inns.**

Thus, to determine if DIA operates the Hazard Days Inn and other newly
constructed Days Inns, the proper inquiry is whether DIA directs or
controls the operations of the facilities. The undisputed evidence shows
that it does.

> **a. DIA Operates the Hazard Days Inn and Other Newly Constructed Days
> Inns Through Its "Hotel Operating System" and "System Standards."**

When a licensee buys a franchise from DIA, part of what he or she buys
is a "hotel operating system." UFOC, Exh. 1, at 2. The Days Inn hotel
operating system (commonly referred to as the "Days Inn System") is both
comprehensive and mandatory. It addresses all aspects of the operation
of a Days Inn hotel, and, under the terms of the license agreement, the
licensee is required to operate the hotel in compliance with all System
Standards at all times. In addition to requiring compliance with the
Days Inn System, the license agreements give DIA several additional
means of control over the operation of Days Inn hotels. For example, the
L.A. (between DIA and HMGI pertaining to the Hazard Days Inn) typifies
the ways in which DIA can and does control the day-to-day operations of
the hotels in its system.^3^[^38]

As part of its System Standards, DIA establishes operating policies for
all Days Inn hotels --- operating policies that "must be strictly
observed by each property in the Days Inn System." OPM, Exh. 5, at 3.
DIA has the right to change the System Standards at any time, in any
fashion it deems necessary. UFOC, Exh. 1, at 28-29; Standard license
agreement, Exh. 2, ¶ 5, at 4; Keeble Dep., Exh. 11, at 146-147; Hoagland
Dep., Exh. 10, at 158-159. The operating policies that Days Inn hotels
must follow are set forth in the Days Inn Operating Policies Manual, one
of the Days Inn "System Standards" Manuals. OPM, Exh. 5, at 3. James
Stansburry, a former HFS employee who conducted training sessions for
hotel managers and employees at Days Inns around the country, explained
that the OPM

> was set up to tell the franchisee exactly what their responsibilities
> were as far as in operations, different requirements that the company
> required of them . . . . \[I\]t was their Bible to live by when
> they're at the hotel as far as operating the hotel under Days Inns'
> standards.

Stansburry Dep, Exh. 13, at 114. His description is apt. As the United
States will explain more fully in its motion for summary judgment, the
OPM sets hundreds of require­ments for the daily operation of all Days
Inn hotels, including the Hazard Days Inn. OPM, Exh. 5, at 13-16, 10-22,
33-34, 103, Appendix B, at 51-52. Among other things, the OPM sets
requirements for grooming and attire of hotel employees, employee
uniforms, hours of operation of the front desk, services that must be
provided to guests (such as wake-up calls, fax machines, free local
calls, free ice, complimentary coffee, baby cribs, and the like), the
forms of payment the hotel must accept, guest safety and security, and
swimming pools (including pool equipment, furniture, and chlorine and pH
levels). [Id]{.underline}. at 13-16, 20-22, 33-34. For hotels with
restaurants, the OPM sets a variety of operating requirements for the
restaurant; if there is no restaurant at or adjacent to the hotel, the
hotel must provide a free continental breakfast, and the OPM specifies
the hours and the menu (fruit juice, coffee (including decaf), tea, and
pastries, muffins, croissant, or "local specialties"). [Id]{.underline}.
at 33-34.

The OPM also includes dozens of specifications for the supplies and
furnishings that must be provided in every guest room, such as
requirements for the provision of, and often the number and location of,
headboards, pictures, desks, tables, chairs, televisions, mirrors, towel
racks, clothes hangers, smoke detectors, ashtrays, wastebaskets, rolls
of toilet tissue, note pads, and sheets of hotel stationery and
envelopes. [Id]{.underline}. at App. B, at 51-52. Similarly, the OPM
specifies the number of towels that must be provided in each guest rooms
(three bath towels, three hand towels, three wash cloths, and one bath
mat), and the size, weight, fiber content, and color of the towels,
sheets, pillowcases, and blankets. [Id]{.underline}. The maximum
shrinkage allowed is ten percent. [Id]{.underline}.

In addition, the OPM sets forth the responsibilities of the hotel's
general manager and requirements for employee relations, employee job
performance, and housekeeping and maintenance. [Id]{.underline}. at
13-16.

> **b. DIA Uses its QA Program to Enforce\
> Compliance with System Standards.**

DIA actively enforces its System Standards, including the requirements
of the OPM by conducting unannounced inspections of every Days Inn
hotel, including the Hazard Days Inn, at least three times per year.
L.A., Exh. 3, at ¶ 5(b), at HAZ 1220; Keeble Dep., Exh. 11, at 297. At
the end of each inspection, the hotel is scored on its compliance with
the System Standards. Keeble Dep., Exh. 11, at 277-78, 300-01; QA
Evaluation Forms, Exh. 40; Burns Dep., Exh.19, at 42.^3^[^39] If the
hotel receives a failing score, it is reinspected, and given thirty days
to cure the conditions that caused it to fail; if it still fails, the
hotel is subject to removal from the system. OPM, Exh. 5, at 6; Keeble
Dep., Exh. 11, at 292-94. Even for hotels with better scores, "QA"
deductions can be costly. The QA scores are translated into a "Sunburst"
rating system in which each property receives from zero to five
"Sunbursts," with higher scores getting more Sunbursts. DIA Worldwide
Directory, Exh. 33; Courchene Dep., Exh. 14, at 31; Keeble Dep., Exh.
11, at 12-14, 278-80, 283; HFS Incorporated's World Wide Web Material,
Exh. 34, at DIA 1406-1407. The Sunburst ratings for all Days Inn hotels
are published in the Days Inn directory, which is published twice a
year, and distributed free of charge at every Days Inn hotel.
[Id]{.underline}. A hotel's performance on its unannounced QA
inspections thus has a significant impact on whether guests will choose
to stay at the hotel and what rates they can charge for its rooms.
Courchene Dep., Exh. 14, at 30-31; Keeble Dep., Exh. 11, at 179-80,
915-16; HFS Incorporated's World Wide Web Materials, Exh. 34, at DIA
1406-1408.

QA inspections are exacting, including hundreds of items, both inside
and outside the facility. Courchene Dep., Exh. 14, at 54; Burns Dep.,
Exh. 19, at 26-32; HFS Incorporated's World Wide Web Materials, Exh. 34,
at DIA 1406; Day to Day with QA, Exh. 25. Among other things, QA
inspectors check for compliance with Days Inn's operating standards,
marketing programs, and reservations policies. Courchene Dep., Exh. 14,
at 54, 77-87; Merriman Dep., Exh. 20, at 49-50, 69; Burns Dep., Exh. 19,
at 26-32, 28, 38, 42; Stansburry Dep., Exh. 13, at 89-92; HFS
Incorporated's World Wide Web Materials, Exh. 34, at DIA 1406; Day to
Day with QA, Exh. 25. At the conclusion of the inspection, the inspector
fills out a QA evaluation form, giving the property a score for the
inspection, discusses the results of the inspection with the hotel
manager, and seeks a commitment from the manager to correct items for
which deductions were made. Keeble Dep. Exh. 11, at 277-78, 300-01, 319;
Burns Dep., Exh.19, at 27-28; QA Evaluation Forms, Exh. 40. Those
commitments often include agreements to take certain actions on a daily
basis. Courchene Dep., Exh. 14, at 69-70.

c\. DIA Controls or Directs the Functioning of the Hazard\
Days Inn and Other New Days Inns in Other Ways.

In addition to the System Standards --- as set out in the OPM and
enforced by the QA program --- the license agreements give DIA a variety
of other forms of control over or involvement in the day-to-day
operations of individual Days Inn hotels, including the Hazard Days Inn.
DIA controls renovations or other changes to the hotel (including the
authority to require renovations), the national reservations system,
national marketing and promotional programs, mandatory training programs
for the general managers of Days Inn hotels and hotel employees, the
handling of guest complaints, the manner in which licensees keep books
and records, and the vendors that licensees use to purchase certain
supplies and equipment.

**D. IA'S Reliance on the Lanham Act and State Court Decisions
Interpreting Agency Law is Misplaced.**

In an attempt to divert the Court from the true issue in this case ---
DIA's liability under the ADA for its own actions in controlling the
design, construction, and operations of the Hazard Days Inn and other
newly constructed Days Inns that are inaccessible to persons with
disabilities --- DIA argues that it should not be held liable under the
ADA because (1) its control over the design, construction, and
operations of these hotels was allegedly required under the Lanham Act,
15 U.S.C. §§ 1051, 1061, and 1127, [et]{.underline} [seq]{.underline}.,
to protect its trademarks, and (2) control of the type that it exercised
has allegedly been held insufficient to make franchisors liable for
personal injuries suffered at individual franchise locations under state
law theories of agency. But DIA's reliance on the Lanham Act and state
law theories of agency is unavailing. First, DIA exercises far more
control over the Hazard Days Inn and other newly constructed Days Inns
than is required to protect its trademark under the Lanham Act.
Moreover, the reason why DIA exercises control over design,
construction, and operations is immaterial: if it exercises control over
these functions, it is liable under the ADA notwithstanding any reason
it may have for doing so. Second, the State law cases on agency that DIA
cites are immaterial because the United States does not seek to hold DIA
vicariously liable for the acts of its agents: DIA's liability is based
on its own acts or omissions.

**1. DIA Exercises Far More Control Over the Hazard Days Inn and Other\
Newly Constructed Days Inns Than the Lanham Act Requires.**

DIA argues that the controls that it exercises over the Hazard Days Inn
and other hotels in the Days Inn System are simply quality controls
designed to protect its rights in its trademarks and service marks under
the Lanham Act and, thus, should not impose liability under the ADA.
Def. Supp. Mem. at 12. But DIA plainly goes far beyond the modest
requirements of the Lanham Act in the controls that it exercises over
the Hazard Days Inn and other hotels in the Days Inn System.

Under the Lanham Act, a trademark owner may grant a license and remain
protected so long as it maintains quality control of the goods and
services sold under the trademark by the licensee. [Taco Cabana Int'l,
Inc. v. Two Pesos, Inc.]{.underline}, 932 F.2d 1113 (5th Cir. 1991),
[cert. granted in part]{.underline}, 502 U.S. 1071 (1992); [Denison
Mattress Factory v. Spring-Air Co.]{.underline}, 308 F.2d 403 (5th Cir.
1962); [Sheila's Shine Products, Inc. v. Sheila Shine,
Inc.]{.underline}, 486 F.2d 114 (5th Cir. 1973). The rationale for the
quality control requirement is that marks are treated by purchasers as
an indication that the trademark owner is associated with the product.
Thus, if quality control is not maintained, the public will be misled
and the trademark will cease to have utility as an informational device.
[Kentucky Fried Chicken Corp. v. Diversified Packaging
Corp.]{.underline}, 549 F.2d 368, 387 (5th Cir. 1977). If the trademark
owner does not exercise adequate quality control, a court may find that
the trademark owner has abandoned the trademark. [Kentucky Fried
Chicken]{.underline}, 549 F.2d at 387; [Sheila's Shine]{.underline}, 486
F.2d at 114. But a finding of insufficient control essentially signals
involuntary trademark abandonment, which is very difficult to prove.
[Kentucky Fried Chicken]{.underline}, 549 F.2d at 387. Thus,
"\[r\]etention of a trademark requires only minimal quality
control\...." [Id]{.underline}. And the question a court asks for Lanham
Act purposes is "whether \[the trademark owner\] has abandoned quality
control." [Id]{.underline}. [See]{.underline} [Sheila's
Shine]{.underline}, 486 F.2d at 124 (failure to supervise a licensee for
over ten years was not construed as an abandonment of the trademark).

Here, DIA far exceeds the quality control requirements of the Lanham Act
for protection of its trade and service marks. DIA's PDSM contains
hundreds of detailed specifications for the design and construction of
the hotel that are not essential to ensuring the quality of services
provided by its franchisees --- [e.g.]{.underline}, specifications for
lightning protection, PDSM, Exh. 4, at § 8.01, at 67, and specifications
for insulation for walls, roofs, doors, windows, and floors, PDSM, Exh.
4, at § 4.03, at 26. The OPM and DIA's other manuals also include
hundreds of detailed specifications relating to the operation of
individual Days Inns which far exceed the quality control requirements
of the Lanham Act --- [e.g.]{.underline}, a requirement for a periodic
schedule for cleaning lint traps of dryers, OPM, Exh. 5, at § V.D.7., at
16, a requirement that each guest room must have three suit hangers,
Montrose style number 17BTN with an O ring or the equivalent, and three
skirt hangers, Montrose style number 17BTN with an O ring or the
equivalent, OPM, Exh. 5, at 51; a required check for energy conservation
at the hotel, Day to Day with QA, Exh. 25, at WIL 4317; requirements for
the manner in which sheets, pillow cases, bath towels, hand towels, and
wash cloths are folded, Day to Day with QA, Exh. 25, at WIL 4303 - 4308;
and requirements for the set up of housekeepers' carts, Day to Day with
QA, Exh. 25, at WIL 4309 - 4310

> **2. The Lanham Act Does Not Exempt DIA From Compliance with the\
> ADA.**

Even if DIA could prove that the control that it exercises over the
Hazard Days Inn and other hotels in the Days Inn System is only the
amount of control required under the Lanham Act to protect its trade and
service marks, the Lanham Act still would not afford DIA any exemption
from compliance with the ADA. DIA can point to no provision of the
Lanham Act or any other law governing trademark owners or franchisors
that exempts them from the requirements of the ADA or any other federal
civil rights law. Moreover, the ADA does not contain any provision
permitting trademark owners or franchisors to discriminate against
persons with disabilities without incurring ADA liability for their
actions.

> **3 DIA's Reliance on State Court Cases Applying Doctrines of Agency
> Is Unavailing Because DIA's Liability Results from Its Own Acts.**

In its supplemental memorandum in support of summary judgment, DIA
argues that it should not be held liable as an operator of the Hazard
Days Inn or other newly constructed Days Inns because franchisors have
not been held liable by state courts in personal injury actions based on
agency theories. But rulings by State courts on agency law in personal
injury cases are not relevant to DIA's liability under federal law
because the United States is not seeking to impose ADA liability based
on an agency theory: DIA's liability arises from its own actions and
inactions that resulted in a failure to design and construct the Hazard
Days Inn and thirteen other Days Inns to be accessible to persons with
disabilities.

The facts previously set forth in this Memorandum, which will be set
forth in more detail in the United States' motion for summary judgment,
amply demonstrate that DIA controlled the design, construction, and
operations of the Hazard Days Inn and the other newly constructed Days
Inns that are inaccessible to persons with disabilities. Thus, vicarious
liability on the basis of agency theory is simply not an issue in this
case.

**E. DIA Cannot Delegate Its Duty to Comply with the ADA to Its
Licensees.**

DIA\'s primary defense to the United States\' claim is that ADA
compliance at Days Inn hotels is somebody else\'s problem. According to
DIA, its license agreements have assigned the responsibility for ADA
compliance to its licensees, and thus relieve DIA of any responsibility
for compliance. [See]{.underline} Def. Mem. at 5-6. But DIA cannot
escape liability under the ADA by contracting it away. DIA has
participated in the design and construction of numerous new hotels, all
of which are inaccessible to individuals with disabilities. It is well
established in federal civil rights law that a party involved in
discriminatory conduct cannot disclaim away its responsibility for
compliance with a federal statute. Indeed, in enacting the ADA, Congress
made clear that "an entity may not do indirectly through contractual
arrangements what it is prohibited from doing directly under the
Act\.... \[And\], a covered entity may not use a contractual provision
to reduce any of its obligations under this Act."^4^[^40] H. Rep. No.
101-485 at 104.

Once DIA undertook to participate in, and exercise control over, the
design and construction of new Days Inn hotels, it also undertook the
responsibility to ensure that the new hotels in its chain comply with
the ADA.^4^[^41] Having involved itself extensively in the design and
construction of these hotels, DIA, like any other private party, cannot
escape a responsibility imposed by a federal statute by contracting it
away. As the cases discussed below make clear, the duties imposed under
federal non-discrimination statutes --- including the Fair Housing Act,
from which the language of section 303 is taken --- are not delegable.
If DIA has attempted to rely on its licensees to ensure that Days Inn
hotels comply with the ADA, they have done so at their own peril. If
licensees have failed to ensure compliance, both they and DIA are
responsible.

Several federal courts have held that federal civil rights statutes, and
particularly the Fair Housing Act, impose nondelegable duties.^4^[^42]
Indeed, the Sixth Circuit was the first Court of Appeals to recognize
that the duty imposed by the Fair Housing Act is not delegable. In 1974,
the Sixth Circuit held the owner of a real estate agency responsible for
the discriminatory acts of his salesmen, quoting with approval from a
district court opinion holding the owner of an apartment building
responsible for the discriminatory conduct of a resident manager \"both
under the doctrine of respondeat superior and because the duty to obey
the law is non-delegable.\" [Marr v. Rife]{.underline}, 503 F.2d 735,
741 (6th Cir. 1974) (quoting [United States v. Youritan Const.
Co.]{.underline}, 370 F. Supp. 643, 649 (N.D. Cal. 1973),
[aff\'d]{.underline} [in]{.underline} [part]{.underline}
[and]{.underline} [remanded]{.underline} [in]{.underline}
[part]{.underline} [by]{.underline}, 509 F.2d 626 (9th Cir. 1975)).
[See]{.underline} [also]{.underline} [Sanders v. Dorris]{.underline},
873 F.2d 938, 943 (6th Cir. 1988) (holding that real estate agency was
liable for the acts of its real estate agents even though agents were
instructed to comply with the law); [Heights Community Congress v.
Hilltop Realty, Inc.]{.underline}, 774 F.2d 135, 141 (6th Cir. 1985)
(holding that realtor could not escape liability for acts of real estate
agents by proving that the agents "were independent contractors, over
whom under common law it has no control" or proving that the realtor
instructed its agents in the law and urged them to comply with
it.).^4^[^43]

Thus, while the provisions in DIA\'s license agreements and other
disclaimers of responsibility may give DIA a third-party action against
the owners of the hotels or others, if those third parties fail to
discharge the duties they and DIA have allocated among themselves, those
provisions allocating responsibility among DIA and other parties are no
defense to an action under title III of the ADA.^4^[^44]

### CONCLUSION

For the reasons stated above, the United States respectfully requests
that Defendants' Motion for Summary Judgment be denied.

> Respectfully submitted,
>
> ISABELLE KATZ PINZLER
>
> Acting Assistant Attorney General
>
> Civil Rights Division
>
> JOHN L. WODATCH, Chief
>
> RENEE M. WOHLENHAUS, Acting Deputy
>
> Chief
>
> Disability Rights Section
>
> Civil Rights Division
>
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> JEANINE M. WORDEN
>
> THOMAS M. CONTOIS
>
> ROBERTA STINAR KIRKENDALL
>
> MARGARITA M. PRIETO
>
> Attorneys

# Disability Rights Section

> Civil Rights Division
>
> U.S. Department of Justice
>
> Post Office Box 66738
>
> Washington, D.C. 20035-6738
>
> \(202\) 307-6556

Dated: August 27, 1997

**CERTIFICATE OF SERVICE**

I hereby certify that on this 28th day of August, 1997, a true copy of
the foregoing United States Memorandum in Opposition to Defendants\'
Motion for Summary Judgment and the United States\' Exhibits Filed in
Support of its Motion for Summary Judgment and in Opposition to
Defendants Motion for Summary Judgment were served by common carrier
Federal Express for overnight delivery on William L Killion, Esq.,
Gregory R. Merz, Esq., Gray, Plant, Mooty, Mooty & Bennett, P.A., 3400
City Center, 33 South Sixth Street, Minneapolis, Minnesoto 55402,
attorneys for defendants Days Inns of America, Inc., and HFS
Incoorporated. I further certify that on this 28th day of August, 1997,
I caused a copy of the United States\' Memorandum in Opposition to
Defendants\' Motion for Summary Judgment to be served by U.S. Mail,
first class, postage prepaid, on Mr. Wilgus Napier, Napier-Sebastian
Construction, 951 Amlin Avenue, Xenia, Ohio 45385, the representative of
cross-claim defendant Hazard Management Group, Inc. Mr. Napier requested
that he not be served with a copy of the United Sttes\' Exhibits Filed
in Support of its Motion for Summary Judgment and in Opposition to
Defendants\' Motion for Summary Judgment because they are quite
voluminous.

> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> Jeanine M. Worden
>
> U.S. Department of Justice

# Civil Rights Division

> Disability Rights Section
>
> Post Office Box 66738
>
> Washington, D.C. 20035-6738
>
> \(202\) 307-6556

**U.S. Department of Justice**

Civil Rights Division

*Disability Rights Section*

*P.O. Box 66738*

*Washington, DC 20035-6738*

DJ# 202-30-6

September 4, 1997

**By Federal Express,**

**Overnight Delivery**

Clerk

United States District Court

for the Eastern District of Kentucky

Pikeville Division

102 Main Street

Pikeville, Kentucky 41502

Re: [United States v. Days Inns of America, Inc., et al.]{.underline},

(E.D. Ky. Civil Action No. 96-26)

Dear Clerk:

Enclosed for filing in the above-captioned action is the original and
one copy of the Stipulation for Extension of Time to File Reply Brief.

Thank you in advance for your assistance in filing these papers. Should
you have any questions, please contact me at

\(202\) 307-6556

Sincerely,

Jeanine M. Worden

Trial Attorney

Disability Rights Section

Enclosures

cc: Gregory Merz, Esq.

**U.S. Department of Justice**

Civil Rights Division

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

*Disability Rights Section*

*PO. Box 66738*

*Washington, DC 20035-6738*

DJ# 202-11E-17

September 4, 1997

**[VIA FEDERAL EXPRESS]{.underline}**

The Honorable Gregory Hollows

United States District Court for

the Eastern District of California

650 Capitol Mall, Room 2546

Sacramento, California 95814

Re: [United States v. Days Inns of America, Inc. et al.\
]{.underline}(E.D. Cal. No. CIV-S-96-260 WBS GGH)

Dear Judge Hollows:

This letter will confirm my conversation of this date with Chambers
staff. Gregory Merz, counsel for Days Inns of America, Inc. and HFS
Incorporated (collectively, \"DIA\"), and I have\
agreed to the re-scheduling of the hearing of DIA\'s motion to compel.
The motion was previously scheduled to be heard by conference call on
September 11, 1997 at 9:00 a.m. Pursuant to\
my discussion with Chambers staff, the motion has been re-\
scheduled for hearing by telephone conference call on September\
18, 1997 at 9:00 a.m. The conference call will be initiated by\
the parties. The parties will file their Joint Statement Re Discovery
Dispute on September 11, 1997.

Thank you for re-scheduling this hearing.

Sincerely,

Jeaine M. Worden

Trial Attorney

Disability Rights Section

\(202\) 307-6556

cc: Gregory Merz, Esq.

[^1]: 1 ^1^Because they are so closely related, DIA and HFS will be
    referred to collectively as "DIA," unless the context requires
    otherwise. In addition to being a wholly owned subsidiary of HFS,
    DIA and HFS have the same address, share office space, and file
    consolidated annual reports, financial statements, and tax returns.
    Deposition of William Keeble ("Keeble Dep."), Exh. 11, at 77-78;
    Consolidated Annual Report, Exh. 37; DIA's Financial Statements,
    Exhs. 38, 39. Moreover, DIA has no employees; all DIA functions are
    carried out by HFS employees. Keeble Dep., Exh. 11, at 30-35.

[^2]: 2 ^2^In addition to filing suit against DIA, the United States
    also filed suit against the owner, Hazard Management Group, Inc.;
    the architect, J. Douglas Kidd, AIA; and the contractor,
    Napier-Sebastian Corporation. But the claims against the owner,
    architect, and contractor have been settled pursuant to a Consent
    Decree. Thus, the United States' only remaining claims are against
    DIA.

[^3]: 3 ^3^The United States intends to file a motion for summary
    judgment in this case within the next two weeks. Because of the
    unavailability of witnesses, conflicting schedules of counsel, and
    DIA's continued failure to identify witness locations, discovery in
    this action has not yet been completed, and the United S25tates does
    not yet have all of the deposition transcripts on which it will
    rely.

[^4]: 4 ^4^Section 302(b)(2)(A)(iv) of the ADA, 42 U.S.C.
    § 12182(b)(2)(A)(iv), only requires removal of architectural
    barriers to access in facilities built before the passage of the ADA
    only to the extent that removing such barriers is "readily
    achievable." "Readily achievable" is defined to mean "easily
    accomplishable and able to be carried out without much difficulty or
    expense." 42 U.S.C. § 12181(9). The statute also identifies factors
    to consider in determining whether barrier removal is readily
    achievable in a particular case. [Id]{.underline}.

[^5]: 5 ^5^Mr. Hecker is the United States expert on architectural
    matters. His report lists all of the ways in which the Hazard Days
    Inn and thirteen other Days Inn hotels fail to comply with the ADA
    Standards. Harold Kiewel, AIA, Defendants' expert on architectural
    matters, did not contest Mr. Hecker's findings relating to the
    nonaccessibility of the Hazard Days Inn or any of the other thirteen
    Days Inns that Mr. Hecker surveyed. Deposition of Harold Kiewel,
    AIA, Exh. 15, at 9-11, 61.

[^6]: 6 ^6^HMGI is the licensee, and owner, of the Hazard Days Inn.

[^7]: 7 ^7^The PDSM contains Design Standards that comprehensively
    address the design and construction of all areas of the hotel,
    including Design Standards for barrier free rooms for persons with
    disabilities that are inconsistent with the ADA Standards.
    [See]{.underline} Keiwel, Exh. 15, at 163; Zelazny, Exh. 16 , at
    194.

[^8]: 8 ^8^Mr. Burgess testified to this fact at his deposition, but the
    United States could not obtain the transcript prior to filing this
    brief. Thus, the United States will supplement this brief with the
    appropriate references to, and excerpts from, the transcript
    promptly after it is received. In the interim, citations to Mr.
    Burgess' testimony will be\
    in the form Burgess Dep., Exh. 44, at \_\_\_.

[^9]: 9 ^9^Napier Dep., Exh. 8, at 48-56; Deposition of Richard
    Tischler, Exh. 17, at 122-129; Architectural Plans\
    of Hazard Days Inn with Changes Annotated by DIA, Exh. 43.

[^10]: 0 ^10^Stansburry Dep., Exh. 13, at 50-52, 71-72, 107-111;
    Courchene Dep., Exh. 14, at 67.

[^11]: 1 ^11^The architectural plans that were adapted for the Hazard
    Days Inn were purchased from a DIA broker, but DIA also issues
    prototype plans that its franchisees can give to their architects to
    short-cut the design process and make it less expensive. Burgess
    Dep., Exh. 44, at \_\_\_; Tischler Dep., Exh. 17, at 505.

[^12]: 2 ^12^Keeble Dep., Exh. 11, at 73-75; Napier Dep., Exh. 8, at
    87-98; PDSM, Exh. 4, §1.02.A, at 7; Operating Policies Manual
    ("OPM"), Exh. 5, at 3-4, 103; Standards of Operation and Design
    Manual, Exh. 6, at §100.00; Day to Day with QA, Exh. 25, at
    36,47-65, 67-92.

[^13]: 3 ^13^L.A., Exh. 3, at ;¶ 5(b), at HAZ 1220, ¶ 12, at 24-25; OPM,
    Exh. 5, at 45; Napier Dep., Exh. 8, at 96-98; Keeble Dep., Exh. 11,
    at 297; Courchene Dep., Exh. 14, at 30, 54; Deposition of Mark
    Merriman, Exh. 20, at 27-28.

[^14]: 4 ^14^[See]{.underline} Standard License Agreement, Exh. 2, at ¶
    10, at 7-8, at ¶ 11, at 8-9, at ¶ 15, at 12-13; OPM, Exh. 5,\
    at 14-15, 25, 103; Keeble Dep., Exh. 11, at 179-180.

[^15]: 5 ^15^Subsection (b) contains certain limitations on requirements
    for elevators.

[^16]: 6 ^16^As the Department of Justice explained in the deposition
    taken by DIA under Fed. R. Civ. P. 30(b)(6), "\[y\]our liability is
    coextensive with the scope of your involvement and participation."
    Deposition of Elizabeth Savage, Exh. 21, at 81. [See]{.underline}
    [also]{.underline} [id]{.underline}. at 103 ("The test \[under
    section 303\] is that you are involved in the design and\
    construction and that your liability is coextensive with the extent
    of your involvement.")

[^17]: 7 ^17^[See]{.underline} Defendants' Memorandum of Law in Support
    of Motion for Summary Judgment at 20.

[^18]: 8 ^18^Excepted from the definition of commercial facilities are
    aircraft, certain railroad facili­ties and equipment, and certain
    facilities covered or exempted from coverage under the Fair Housing
    Act. 42 U.S.C. § 12181(2).

[^19]: 9 ^19^The Hazard Days Inn, for instance, is a non-residential
    facility whose operations affect commerce, and thus is a
    \"commercial facility.\" In addition, the hotel is a \"public
    accommodation,\" as it falls within one of the statute\'s categories
    of public accommodation: it is \"an inn, hotel, motel, or other
    place of lodging,\" within the meaning of section 301(7)(A).
    [See]{.underline} 42 U.S.C. §§ 12181(7)(A).

[^20]: 0 ^20^The section in question became § 303(a)(2), which defines
    illegal discrimination to include a failure, when altering a
    facility or portion of a facility, to make those alterations in a
    manner that the altered portions of the facility are readily
    accessible to and usable by individuals with disabilities. 42 U.S.C.
    § 12183(a)(2).

[^21]: 1 ^21^By including the term "design" in § 303, Congress made
    clear that § 303 would cover persons who design the facility --- not
    just those who own, operate, or lease it. If owners, operators,
    lessors, and lessees were the only parties to be covered, Congress
    could have omitted the word \"design\" from § 303 and addressed only
    the end result by making it illegal to simply \"construct\"
    inaccessible facilities. Indeed, Congress took that approach in §
    226 of the ADA, 42 U.S.C. § 12146, which provides that "it shall be
    considered discrimination for a public entity to construct a new
    facility to be used in the provision of designated public
    transportation services, unless that facility is readily accessible
    to and usable by individuals with disabilities\...." By including
    the design function in the prohibited conduct, Congress deliberately
    extended § 303\'s coverage to extend not only to those parties who
    are ultimately responsible for the construction of new facilities,
    but also to those who design them --- architects, engineers,
    interior designers, and all other parties who design facilities.
    Thus, limiting § 303 to those persons who own, lease (lease to), or
    operate a facility, as DIA suggests, would nullify coverage
    expressly marked out by Congress.

[^22]: 2 ^22^DIA does not explain why incorporating the language of §
    302 which applies only to places of public accommodation would also
    limit liability to those who own, lease, or operate commercial
    facilities. No doubt the answer lies in the fact that the Hazard
    Days Inn is a commercial facility as well as a place of public
    accommodation. Thus, if the limiting language that DIA seeks to
    import into § 303 did not limit liability to those who own, lease,
    or operate commercial facilities as well as public accommodations,
    DIA would still be liable.

[^23]: 3 ^23^Moreover, limiting § 303 coverage to those parties
    identified in § 302 makes no sense from a practical perspective.
    Parties who own, operate, or lease public accommodations are the
    obvious choice for the obligations related to the day to day
    operation of existing businesses imposed by § 302. But parties who
    lease or operate a facility frequently will have nothing whatsoever
    to do with the initial design and construction of the facility.
    Indeed, it is not at all clear how one would identify who it is that
    "operates"a facility that has not yet been built.

[^24]: 4 ^24^[See]{.underline} [Peyton v. Rowe]{.underline}, 391 U.S.
    54, 65 (1968) (civil rights legislation should be liberally
    construed in order to effectuate its remedial purpose); [Tcherepnin
    v. Knight]{.underline}, 389 U.S. 332, 336 (1967) (it is a \"familiar
    canon of statutory construction that remedial legislation should be
    construed broadly to effectuate its purposes\"). \"\[R\]emedial
    statutes are to be liberally construed to effectuate their
    purposes.\" [Rettig v. Pension Benefit Guar. Corp.]{.underline}, 744
    F.2d 133, 155 n.54 (D.C. Cir. 1984). *See also* [Carparts Distrib.
    Ctr., Inc. v. Automotive Wholesaler\'s Ass\'n]{.underline}, 37 F.3d
    12, 18 (1st Cir. 1994) (broadly construing the ADA); [Kinney v.
    Yerusalim]{.underline}, 9 F.3d 1067 (3d Cir. 1993) (same), [cert.
    denied]{.underline} [sub]{.underline} [nom.]{.underline} [Hoskins v.
    Kinney]{.underline}, 114 S. Ct. 1545 (1994); [Howe v.
    Hull]{.underline}, 873 F. Supp. 72 (N.D. Ohio 1994) (same).

[^25]: 5 ^25^For instance, if liability under § 303 is limited to those
    who own, operate, or lease facilities, an owner could decide to
    erect a building that is not accessible to persons with disabilities
    and likely find an architect and contractor who were willing to do
    so. Neither the architect nor the contractor would have a strong
    incentive to refuse, since they would have no liability under the
    ADA and no liability to the owner because they were following the
    owner\'s instructions. Thus, a limiting reading of § 303 would
    permit more inaccessible buildings to be built, and accessibility of
    those buildings could only be achieved through lawsuits to compel
    compliance. Such a result is clearly not what Congress intended.
    Congress recognized that it is far easier and less expensive to
    incorporate accessible features into a building from the beginning
    than to go back later and retrofit the facility after construction
    is complete.

    > Because retrofitting existing structures to make them fully
    > accessible is costly, a far lower standard of accessibility has
    > been adopted for existing structures --- a standard of \"readily
    > achievable.\" Because it costs far less to incorporate accessible
    > design into the planning and constructing of new buildings and of
    > alterations, a higher standard of \"readily accessible to and
    > usable by\" person with disabilities has been adopted in the ADA
    > for new construction and alterations.

    H.R. Rep. 485, Part 3, 101st Cong., 2d Sess. 60 (1990).

[^26]: 6 ^26^[See]{.underline} Robert G. Schwemm, [Housing
    Discrimination Law and Litigation]{.underline} § 12.3(1) at 12-22
    (1990 and Supp. 1995) (Fair Housing Act provisions "simply declare
    certain housing practices to be unlawful without specifying who may
    be held responsible for these practices. Thus, anyone who commits
    one of the acts proscribed by the statute's substantive provisions
    is liable to suit," unless specifically exempted).

[^27]: 7 ^27^Section 804(f)(3)(C) of the Fair Housing Act provides that

    > For purposes of this subsection, discrimination includes --- in
    > connection with the design and construction of covered multifamily
    > dwellings for first occupancy after \[March 13, 1991\], a failure
    > to design and construct those dwellings in such a manner that ---
    > the public use and common use portions of such dwellings are
    > readily accessible to and usable by handicapped persons . . . .

    42 U.S.C. § 3604(f)(3)(C).

[^28]: 8 ^28^Section 402 was renumbered to § 302.

[^29]: 9 ^29^The legislative history is clear that the change from
    "potential places of employment" to "commercial facilities" was made
    solely for the purpose of avoiding any confusion with the provisions
    of title I of the ADA, which prohibits discrimination in employment.
    The two terms were intended to have the same meaning.
    [See]{.underline} H.R. Rep. 485, Part 3, 101st Cong., 2d Sess. 53
    (1990).

[^30]: 0 ^30^The section in question became section 303(a)(2), which
    defines illegal discrimination to include a failure, when altering a
    facility or portion of a facility, to make those alterations in a
    manner that the altered portions of the facility are readily
    accessible to and usable by individuals with disabilities. 42 U.S.C.
    § 12183(a)(2).

[^31]: 1 ^31^The [Johanson]{.underline} case is still pending in the
    United States District Court for the Southern District of Florida.

[^32]: 2 ^32^DIA\'s Memorandum at 9-10, 14.

[^33]: 3 ^33^Indeed, the Supreme Court has noted that when two courts
    construe a statute differently --- such as PVA and
    [Johanson]{.underline} --- it is difficult to say that a statute is
    not ambiguous. [Smiley v. Citibank (South Dakota),
    N.A.]{.underline}, 116 S. Ct. 1730, 1732-33 (1996).

[^34]: 4 ^34^In addition to including this interpretation of § 303 in
    its Technical Assistance Manual, the Department has also
    consistently taken this legal position in briefs filed in other
    lawsuits, [e.g.]{.underline}, [PVA]{.underline},
    [Huizenga]{.underline}, [supra]{.underline}.

[^35]: 5 ^35^[See]{.underline} Defendants' Supplemental Memorandum of
    Law in Support of Motion for Summary Judgment ("Def. Supp. Mem.") at
    5-9.

[^36]: 6 ^36^Even if DIA's interpretation of [Neff]{.underline} were
    correct, and a showing of causation were required to establish that
    DIA operates the Hazard Days Inn, the United States has made that
    showing. The undisputed facts show that DIA caused the Hazard Days
    Inn to be inaccessible: its broker sold plans for an inaccessible
    hotel to Mr. Napier; it failed to correct violations of the ADA
    Standards when it reviewed and approved the plans for the Hazard
    Days Inn; it failed to require HMGI to correct violations of the ADA
    Standards prior to allowing the Hazard Days Inn to open for
    business; and it permitted the Hazard Days Inn to continue
    operations without making modifications to eliminate violations of
    the ADA Standards even though it had the authority under the L.A. to
    require HMGI to make the modifications required to make the Hazard
    Days Inn accessible.

[^37]: 7 ^37^[See]{.underline} [Carparts Distribution Center Inc. v.
    Automotive Wholesalers Ass\'n of New England]{.underline}, 37 F.3d
    12 (1^st^ Cir. 1994), where the First Circuit considered whether a
    self-funded medical reimbursement plan was covered as an
    \"employer\" under title I of the ADA. The court did not look just
    to the plan\'s control over the alleged discrimina­-tory act, as
    [Neff]{.underline} implies. [Id]{.underline}. To the contrary, the
    First Circuit underscored its obligation to construe the ADA
    broadly, and offered several possible theories under which the plan
    --- which in no way \"employed\" the plaintiff in the traditional
    sense --- could be found [covered]{.underline} by the Act.
    [Id.]{.underline} at 16-18.

    Similarly, in [Howe v. Hull]{.underline}, 873 F. Supp. 72 (N.D. Ohio
    1994), the court noted the broad language and remedial purposes of
    the ADA, and extended coverage under title III to an on-call
    admitting physician, finding him individually liable for his
    discriminatory actions. [Id]{.underline}. at 78. In determining
    whether the physician was an \"operator of the hospital\" within the
    meaning of the ADA, the court considered not only whether the
    physician had the power and discretion to perform the allegedly
    discriminatory act, but whether he was in a position of authority at
    the hospital generally. And, although it came to a contrary
    conclusion, the court in [Aikins]{.underline} applied a similar
    analysis in finding that a physician did not operate a hospital
    within the meaning of the ADA because he had no control over the
    specific prohibited activity --- the requirement to provide
    auxiliary aids and services to individuals who are deaf --- and
    because he was \"not on the hospital\'s board of directors, and
    \[had\] no authority to enact or amend hospital policy,\" he did not
    \"operate\" the hospital within the meaning of title III.
    [Aikens]{.underline}, 843 F. Supp. at 1335.

[^38]: 8 ^38^DIA cites testimony by Elizabeth Savage, Counsel to the
    Acting Assistant Attorney General for Civil Rights, to argue that
    the United States does not contend that DIA controls the day-to-day
    operations of the Hazard Days Inn or other hotels in the Days Inn
    System. But the testimony that DIA relies on, which is taken out of
    context, does not represent the United States consistent position in
    this case. Ms. Savage's testimony merely reflects the fact that the
    United States does not contend that DIA controls every single aspect
    of a hotel's day-to-day operation --- meaning DIA is not present at
    the site managing every aspect of the day-to-day operations of the
    facility at all times. Savage Dep., Exh. 21. [See]{.underline}
    [also]{.underline} United States Responses to DIA's Third Set of
    Interrogatories.

[^39]: 9 ^39^The inspections are mandatory; if a hotel refuses an
    inspection, it receives a score of zero. Keeble Dep., Exh. 11, at
    998.

[^40]: 0 ^40^Indeed, § 302(b)(1)(D) of the ADA, 42 U.S.C. §
    12182(b)(1)(D), specifically provides: "An individual or entity
    shall not, directly or through contractual or other arrangements,
    utilize standards or criteria or methods of administration (i) that
    have the effect of discriminating on the basis of disability; or
    (ii) that perpetuate the discrimination of others who are subject to
    common administrative control."

[^41]: 1 ^41^DIA\'s participation in the design and construction of new
    Days Inn hotels is extensive. As discussed above, they have created
    prototype plans for new hotels, authored a Planning and Design
    Standards Manual with hundreds of design specifications and
    architectural details (including accessibility requirements),
    drafted and entered into license agreements which reserve to DIA
    control over every aspect of the design and construction of every
    new Days Inn hotel, reviewed and approved plans for new hotels,
    monitored construction, and inspected every new hotel before
    admitting it to the Days Inn system.

[^42]: 2 ^42^The Supreme Court has defined a non-delegable duty as
    follows:

    > The concept of a nondelegable duty imposes upon the principal not
    > merely an obligation to exercise care in his own activities, but
    > to answer for the well-being of those persons to whom the duty
    > runs. The duty is not discharged by using care in delegating it to
    > an independent contractor. Consequently, the doctrine creates an
    > exception to the common-law rule that a principal normally will
    > not be held liable for the tortious conduct of an independent
    > contractor. So understood, a nondelegable duty is an affirmative
    > obligation to ensure the protection of the person to whom the duty
    > runs.

    [General Bldg. Contractors Ass\'n v. Pennsylvania]{.underline}, 458
    U.S. 375, 395-96 (1982) (citations omitted). The [General Bldg.
    Contractors Ass\'n]{.underline} case addressed the question of
    whether 42 U.S.C. § 1981 imposed a nondelegable duty on an employer.
    After defining the term, the Court went on to hold that because §
    1981 does not speak in terms of duties, but only declares specific
    rights held by all persons in the United States, it imposed no such
    duty. 458 U.S. at 396. Nothing in the Court\'s opinion, however, is
    contrary to the holdings of several Courts of Appeals and District
    Courts, discussed subsequently, that other federal civil rights
    statutes, including the Fair Housing Act, do impose nondelegable
    duties not to discriminate.

[^43]: 3 ^43^[Accord]{.underline} [Walker v. Crigler]{.underline}, 976
    F.2d 900, 904 (4th Cir. 1992) (adopting \"general rule\" applied by
    other federal courts that duty not to discriminate under Fair
    Housing Act is non-delegable, (citing [Marr v. Rife]{.underline}));
    [Coates v. Bechtel]{.underline}, 811 F.2d 1045, 1051 (7th Cir. 1987)
    (in cases under Fair Housing Act and § 1982, courts have imputed
    wrongful acts of real estate agent to property owner, even if not
    authorized or ratified); [Phiffer v. Proud Parrot Motor Hotel,
    Inc.]{.underline}, 648 F.2d 548, 552 (9th Cir. 1980) (duty to obey
    laws relating to racial discrimination is non-delegable); [Saunders
    v. General Svcs. Corp.]{.underline}, 659 F. Supp. 1042, 1059 (E.D.
    Va. 1987) (under Fair Housing Act, duty not to discriminate is
    non-delegable); [Harrison v. Otto G. Heinzeroth Mortgage
    Co.]{.underline}, 430 F. Supp. 893, 896-97 (N.D. Ohio 1977) (same);
    [United States v. L&H Land Corp.]{.underline}, 407 F. Supp. 576, 580
    (S.D. Fla. 1976) (same); [Zuch v. Hussey]{.underline}, 394 F. Supp.
    1028, 1051 (E.D. Mich. 1975) (same); [United States v. Real Estate
    Devel. Corp.]{.underline}, 347 F. Supp. 776, 785 (N.D. Miss. 1972)
    (same).

[^44]: 4 ^44^Indeed, DIA and HFS have filed just such a claim in this
    case, asserting a cross-claim against the owner of the Hazard Days
    Inn, under an indemnifica­tion provision in the license agreement for
    the Hazard Days Inn. The United States expresses no opinion on the
    merits of DIA\'s or HFS\' indemnification claim.