**UNITED STATES DISTRICT COURT**

**FOR THE CENTRAL DISTRICT OF ILLINOIS**

**DANVILLE/URBANA DIVISION**

**UNITED STATES OF AMERICA, )**

**)**

**Plaintiff, )**

**)**

**)**

**v. ) Case No. 96-2028**

**)**

**)**

**DAYS INNS OF AMERICA, INC., *et al.* )**

** )**

**)**

**Defendants. )**

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_)**

**PLAINTIFF UNITED STATES\' MEMORANDUM IN OPPOSITION TO**

**DEFENDANTS DAYS INNS OF AMERICA, INC. AND HFS INCORPORATED\'S**

**MOTION FOR SUMMARY JUDGMENT**

**(ORAL ARGUMENT REQUESTED)**

ISABELLE KATZ PINZLER

Acting Assistant Attorney General

Civil Rights Division

JOHN L. WODATCH, Chief

RENEE M. WOHLENHAUS,

Acting Deputy Chief

ROBERTA S. KIRKENDALL

JEANINE M. WORDEN

MARGARITA M. PRIETO

THOMAS M. CONTOIS

Attorneys

Disability Rights Section

Civil Rights Division

U.S. Department of Justice

Post Office Box 66738

Washington, D.C. 20035-6738

\(202\) 307-0986

# TABLE OF CONTENTS

[Page]{.underline}

I. INTRODUCTION 1

II\. ARGUMENT 2

A. Section 303 of the ADA Broadly Prohibits the Design and Construction
of\
Public Accommodations and Commercial Facilities that are not Accessible
2

1\. DIA\'s argument is inconsistent with the language, structure, and\
purpose of title III of the ADA. 3

2\. DIA's argument is inconsistent with the legislative history of §§
302\
and 303 9

B. DIA\'s Duty to Comply With the ADA\'s New Construction Requirements\
is not Delegable. 11

C. DIA\'s Reliance on *Neff v. American Dairy Queen* is Misplaced 13

1\. *Neff* is wrongly decided. 14

2\. This case is distinguishable from *Neff*. 17

3\. Even if *Neff* were correctly decided, and applicable here, DIA\
would be responsible under the *Neff* "test" for the failure of the\
Champaign Days Inn to be readily accessible to and usable by\
individuals with disabilities. 18

D. DIA Exercises Considerably More Control Over its Licensees than is\
Required by the Lanham Act. 20

E. DIA\'s Reliance on Agency Law is Misplaced. 22

III\. CONCLUSION 25

# TABLE OF AUTHORITIES

[Cases]{.underline}: [Page(s)]{.underline}:

[Aikins v. St. Helena Hosp.]{.underline}, 843 F. Supp. 1329 (N.D. Cal.
1994) 16

[Brotherhood of Railroad Trainmen v. Baltimore & Ohio Ry.
Co.]{.underline}, 331 U.S. 519 (1947) [8]{.underline}

[Carparts Distribution Center Inc. v. Automotive Wholesalers Ass\'n of
New]{.underline}\
[England]{.underline}, 37 F.3d 12 (1st Cir. 1994) 16

[Chevron, U.S.A., Inc. v. Natural Resources Defense Council,
Inc.]{.underline}, 467 U.S. 837 (1984) 5

[Cislaw v. Southland Corp.]{.underline}, 4 Cal. App. 4th 1284, 6 Cal.
Rptr. 2d 386\
(Cal. Ct. App. 1992) 23

[Coates v. Bechtel]{.underline}, 811 F.2d 1045 (7th Cir. 1987) 12

[D'Amico v. New York State Bd. of Law Examiners]{.underline}, 813 F.
Supp. 217 (W.D.N.Y. 1993) 9

[Dawn Donut Co., Inc. v. Hart\'s Food Stores, Inc.]{.underline}, 267
F.2d 358 (2d Cir. 1959) 21

[Days Inns of America, Inc. v. Reno]{.underline}, 935 F. Supp. 874 (W.D.
Tx. 1996) 14, 17

[Drexel v. Union Prescription Centers, Inc.]{.underline}, 582 F.2d 781
(3rd Cir. 1978) 17

[Dunn v. Commodity Futures Trading Comm'n]{.underline}, \_\_\_ U.S.
\_\_\_, 117 S. Ct. 913 (1997) 7

[Ganton Technologies, Inc. v. Quadion Corp.]{.underline}, 834 F. Supp.
1018 (N.D. Ill. 1993) 19

[General Bldg. Contractors Ass\'n v. Pennsylvania]{.underline}, 458 U.S.
375 (1982) 12

[Hanson v. Espy]{.underline}, 8 F.3d 469 (7th Cir. 1993) 5-6

[Hayman v. Ramada Inn, Inc.]{.underline}, 357 S.E.2d 394 (N.C. App.
1987) 23

[Heights Community Congress v. Hilltop Realty, Inc.]{.underline}, 774
F.2d 135 (6th Cir. 1985) 12

[Howe v. Hull]{.underline}, 873 F. Supp. 72 (N.D. Ohio 1994) 16

[HRW Systems, Inc. v. Washington Gas Light Co.]{.underline}, 823 F.
Supp. 318 (D. Md. 1993) 19

[Johnson v. Commissioner of Internal Revenue]{.underline}, 114 F.3d 145
(10th Cir. 1997) 8

[Kentucky Fried Chicken Corp. v. Diversified Packaging
Corp.]{.underline}, 549 F.2d 368\
(5th Cir. 1977) 20

[Marr v. Rife]{.underline}, 503 F.2d 735 (6th Cir. 1974) 12, 24

[Neff v. American Dairy Queen Corp.]{.underline}, 58 F.3d 1063 (5th Cir.
1995),\
[cert. denied]{.underline}, \_\_\_\_ U.S. \_\_\_\_, 116 S. Ct. 704
(1996) 13-19

[Oberlin v. Marlin American Corp.]{.underline}, 596 F.2d 1322 (7th Cir.
1979) 17, 20-21

[Pennington v. Didrickson]{.underline}, 22 F.3d 1376 (7th Cir. 1994) 5

[Perrin v. United States]{.underline}, 444 U.S. 37 (1979) 24

[Phiffer v. Proud Parrot Motor Hotel, Inc.]{.underline}, 648 F.2d 548
(9th Cir. 1980) 12

[Pierson Sand & Gravel, Inc. v. Pierson Township]{.underline}, 851 F.
Supp. 850 (W.D. Mich. 1994) 19

[Robinson v. Shell Oil Co.]{.underline}, \_\_\_ U.S. \_\_\_, 117 S. Ct.
843 (1997) 5

[Saunders v. General Svcs. Corp.]{.underline}, 659 F. Supp. 1042 (E.D.
Va. 1987) 12

[Smith v. United States]{.underline}, 508 U.S. 223 (1993) 24

[United States v. Baxter Health Care Corp.]{.underline}, 901 F.2d 1401
(7th Cir. 1990) 6

[United States v. Ellerbe Becket, Inc.]{.underline}, \_\_\_ F. Supp.
\_\_\_, 1997 WL 610275 3

(D. Minn. Oct. 2, 1997) 3

[United States v. Jac Natori Co., Ltd.]{.underline}, 108 F.3d 295 (Fed.
Cir. 1997) 8

[United States v. Minker]{.underline}, 350 U.S. 179 (1956) 8

[United States v. Youritan Construction Co.]{.underline}, 370 F. Supp.
643 (N.D. Calif. 1973),\
*aff\'d in part and rev\'d in part on other grounds*, 509 F.2d 626 (9th
Cir. 1975) 12

[Walker v. Crigler]{.underline}, 976 F.2d 900 (4th Cir. 1992) 12

[Ware v. Wyoming Bd. of Law Examiners]{.underline}, 973 F. Supp. 1339
(D. Wy. 1997) 9

[Wisconsin Elec. Power Co. v. Reilly]{.underline}, 893 F.2d 901 (7th
Cir. 1990) 6

[Statutes]{.underline}:

15 U.S.C. §§ 1051, 1061, and 1127 *et seq*. 20

42 U.S.C. § 3604(3)(C) 7

42 U.S.C. § 12101(b)(1) 24

42 U.S.C. § 12101(b)(4) 24

42 U.S.C. §§ 12181 through 12189 1

42 U.S.C. § 12182(b)(1)(D) 12

42 U.S.C. § 12183 4

42 U.S.C. § 12188(a)(1) 8

[Legislative history]{.underline}:

S. 933, 101st Cong. Title IV (May 9, 1989) 9

H.R. 2273, 101st Cong. Title IV (May 9, 1989) 9

S. Rep. 116, 101st Cong., 1st Sess. 58-60, 68-69 (1989) 10

H.R. Rep. 711, 100th Cong., 2d Sess. 16-18 (1988) 7

H.R. Rep. 485, Part 2, 101st Cong. 2d Sess. 11 (1990) 13

H.R. Rep. 485, Part 3, 101st Cong. 2d Sess. 11 (1990) 10

134 Cong. Rec. S10532-04 (daily ed. Aug. 2, 1988) 7

136 Cong. Rec. H2599-01 \*H2634 (daily ed. 1990) 8

**I. INTRODUCTION**

Despite undisputed evidence that they have participated in and exercised
extensive control over the design and construction of several new Days
Inn hotels that are inaccessible to individuals with disabilities, Days
Inns of America, Inc. ("DIA") and HFS Incorporated ("HFS") contend that
they bear no responsibility for those hotels under title III of the
Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12181 through
12189 ("ADA"). According to DIA and HFS, Congress\' directive to end
discrimination against individuals with disabilities does not apply to
them: it is only P & P and other small businessmen like them who must
comply with the ADA.

DIA's^1^[^1] argument rests on a fundamental misreading of the ADA and
its legislative history. Despite DIA\'s protestations to the contrary,
the ADA and its legislative history do not limit compliance with new
construction requirements to those who own, operate or lease a new
facility. Instead, Congress has made it illegal for [any]{.underline}
individual or entity to design and construct an inaccessible facility,
whatever their relationship to the facility after its completion. And,
even if DIA\'s reading of the ADA were correct, the United States has
introduced abundant, undisputed evidence showing the ways in which DIA
controls and directs the functioning of the hotels in its chain, such
that DIA "operates" those hotels within the meaning of title III.

In addition to misreading the ADA, DIA advances a variety of other
theories to relieve itself from responsibility for ADA violations at new
Days Inn hotels. For instance, DIA maintains that it has no ADA
liability because it has assigned responsibility for ADA compliance to
its licensees, under the terms of its license agreements. Even if DIA\'s
purported assignment of ADA liability were valid, however, it is well
established that the duty to comply with a federal civil rights law
cannot be delegated. While such an assignment may give DIA an action
against its licensees ([e.g.]{.underline}, for indemnification), it is
no defense to an ADA action against DIA and HFS directly for their parts
in the design and construction of the Champaign Days Inn.

DIA also seeks to avoid liability by invoking state common law
principles of agency. The government, however, has not advanced any
claim based on an agency theory, or any other theory of vicarious
liability. To the contrary, the United States has consistently
maintained that, due to its extensive participation in and control over
the design and construction of all new Days Inn hotels, including the
Champaign Days Inn, DIA has its own, independent responsibility to
comply with the ADA. As the Champaign Days Inn and numerous other new
inaccessible Days Inns prove, DIA has consistently failed to meet that
responsibility. Thus, DIA is liable for its own violation of the ADA,
not for some other person or entity\'s failure to comply with the
statute.

**II. ARGUMENT**

A. **Section 303 of the ADA Broadly Prohibits the Design and
Construction of Public Accommodations and Commercial Facilities that Are
Not Accessible.**

Section 303 of the ADA --- the ADA\'s mandate requiring all newly
constructed facilities to be fully accessible --- applies to any party
that controls or participates in the design and construction of a new
public accommodation or commercial facility. *See* U.S. Mem. at 2-3,

6-12. DIA\'s argument that it is only illegal for [some]{.underline}
parties to engage in this activity fails to comport with the structure,
purpose, language, and legislative history of title III and § 303 in
particular. In an effort to convince this court that its view of the
statute is correct, DIA misrepresents the ADA's language and its
legislative history, offering conclusory and misleading statements that
confuse the actual congressional intent regarding § 303 with DIA's
fictional recreations of legislative intent. DIA's statements are not
supported by the ADA, supporting legislative history, or court
precedent, and therefore should be disregarded.^2^[^2]

1\. [DIA\'s argument is inconsistent with the language, structure, and
purpose of title III of the ADA.]{.underline}

As the United States argued in its memorandum in support of its motion
for summary judgment, § 303 of the ADA is not limited to parties who
own, lease, or operate public accommodations. *See* U.S. Mem. at 6-19.
In suggesting that § 303 is so limited, DIA fails to explain how its
reading of the statute can be reconciled with the structure of title
III, the language of § 303 itself, with Congress\' clearly expressed
intent to ensure that all new facilities are designed and constructed to
be accessible, or with court decisions that have interpreted § 303
consistent with the United States' reading of the statute.

The most serious flaw in DIA\'s argument is its failure to recognize,
much less address, the disparity in the scope of §§ 302 and 303. While §
303 applies to both commercial facilities and public accommodations, §
302 applies only to public accommodations, and to private entities that
own, lease, or operate public accommodations. *See* U.S. Mem. at 13-16.
Limiting § 303 to the parties identified in § 302 would effectively
eliminate ADA coverage of all commercial facilities --- except those
that happened to be owned, leased, or operated by a public
accommodation.

DIA attempts to sidestep this problem by breaking down § 302(a) into
five parts --- an exercise not based on any reasoned analysis or intent
of the drafters --- and severing the "owners, operators, lessors, and
lesseest" language from the words that follow --- the words that limit
[all of]{.underline} § 302 to places of public accommodation. *See*
DIA\'s Mem. at 7-10.^3^[^3] After breaking the language of § 302(a) into
parts, DIA then mixes and matches the segments, picking and choosing
which parts of the section are included in § 303 by virtue of the phrase
"discrimination for purposes of section 302(a) includes. . ." 42 U.S.C.
§ 12183. While DIA repeatedly claims to be relying on the "plain
language" of the statute --- *see* DIA\'s Mem. at 7 --- it is intriguing
that DIA's chief argument instead relies upon a revision and expansion
of the statute's language to something that is simply not there, and was
never intended by Congress to be there. DIA argues that, since, § 303
contains a reference to § 302(a), liability under § 303 should be
limited to entities that are named in § 302(a) --- [i.e.,]{.underline}
persons "who own, lease (or lease to), or operate a place of public
accommodation." But, recognizing that a direct incorporation of the
limiting

language of § 302(a) into § 303 would impermissibly eliminate § 303\'s
coverage of commercial facilities, DIA asks the Court not only to
incorporate the limiting language from § 302(a) [but also to amend it so
that it applies to persons who own, lease (lease to), or operate
commercial facilities, in addition to the parties actually named in §
302(a)]{.underline}.

In ascertaining the meaning of statutory language, "the plainness or
ambiguity of statutory language is determined by reference to the
language itself, the specific context in which that language is used,
and the broader context of the statute as a whole." [Robinson v. Shell
Oil Co.]{.underline}, \_\_\_ U.S. \_\_\_\_, 117 S. Ct. 843, 846 (1997).
The United States\' position is that there is only one reading of the
statute that is consistent with the language of both § 302 and § 303,
and with the structure, purpose, and legislative history of the Act.
U.S. Mem. at 8-19. And, even if the Court were to conclude that the
statute is ambiguous^4^[^4], then the interpretation of the statute by
the agency entrusted with its enforcement is entitled to substan­tial
deference. *See, e.g.,* [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\");
[Pennington v. Didrickson]{.underline}, 22 F.3d 1376, 1382-83 (7th Cir.
1994); [Hanson v. Espy]{.underline}, 8 F.3d 469, 472-73 (7th Cir. 1993);
[United States v. Baxter Health Care Corp.]{.underline}, 901 F.2d 1401,
1407 (7th Cir. 1990); [Wisconsin Elec. Power Co. v. Reilly]{.underline},
893 F.2d 901, 906-07 (7th Cir.1990). By contrast, DIA\'s suggestion that
the "owns, leases (or leases to), or operates" language should be
detached from "a place of public accommodation" and applied to § 303, to
cover both public accommodations and commercial facilities, is
inconsistent with the purpose of § 303. As explained in the United
States\' Memorandum supporting Summary Judgment, the aim of making all
new construction accessible as it is being built, rather than doing
costly retrofitting, which is required by § 303, is far better
accomplished if § 303\'s prohibition applies to all parties engaged in
the design and construction of new facilities. *See* U.S. Mem. at 13-17.
DIA does not explain why Congress would go to the trouble to define an
illegal activity (the design and construction of inaccessible
facilities), and yet allow a multitude of parties to engage in that
activity with impunity --- parties including not only franchisors that
involve themselves in design and construction, but also architects,
engineers, and contractors. Congress has not taken such an approach in
other civil rights statutes, and DIA offers no evidence proving that
Congress intended the ADA to be any different. *See* U.S. Mem. at
16-17.^5^[^5]

In fact, § 804(f)(3)(C) of the Fair Housing Act ("FHA"), which was
enacted two years before the ADA was enacted and is the provision that §
303 mirrors, uses identical "failure to design and construct" language
without listing responsible parties (in particular, there is no FHA

limitation to owners, operators, lessors and lessees). 42 U.S.C. §
3604(3)(C). Moreover, a review of the legislative history of that
provision confirms that Congress indeed intended entities that
participate in design and construction of housing, such as architects,
contractors and developers, to be responsible and have liability for
compliance with the new construction provisions of the FHA.
[See]{.underline} H.R. Rep. 100-711, 100th Cong., 2d Sess. 16-18.^6^[^6]
It is doubtful that the 101st Congress, when enacting identical language
as applied to public accommodations and commercial facilities merely two
years later, would have intended such a drastically different
result.^7^[^7]

Next, DIA attempts to reduce Congress' inclusion of the term "design" in
§ 303 to nothing more than a mere "triggering event." DIA Mem. at
12-14.^8^[^8] There is nothing in the statute's language or legislative
history to support this assertion. Congress included the term "design"
in § 303 to make it clear that it was concerned with more than just the
end result of the

design and construction process.^9^[^9] If, as DIA suggests, the focus
were really intended to be only on those parties who are ultimately
responsible for the facility, it would have made far more sense for
Congress to have omitted the word "design" from the statute altogether,
and simply to have made it illegal to "construct" an inaccessible
facility. Congress, however, did expressly include the term \"design\"
when describing the prohibited activities --- *see* U.S. Mem. at 13 ---
and DIA's strained rationale for the inclusion of the word design in the
statute is simply not supported by the legislative history nor the
language of the statute itself. It is more faithful to the language of
the statute, and better serves the purposes of the Act, to read § 303\'s
use of the conjunctive \"and\" to make it unlawful to design an
inaccessible facility as well as to construct an inaccessible
facility.^10^[^10]

2\. [DIA's argument is inconsistent with the legislative history of §
302 and § 303.]{.underline}

DIA correctly points out that § 302 and § 303 were at one time part of
the same section. DIA fails to recognize, however, that the changes made
to those sections after they were separated suggest that § 302 and § 303
were specifically modified in ways that caused them to apply not just to
different facilities, but also to different parties.

In early versions of the legislation, the provisions that now constitute
§ 302 and § 303 of the ADA were included in what was then Title IV,
Public Accommodations and Services Operated by Private Entities. *See,
e.g.,* S. 933, 101st Cong. Title IV (May 9, 1989); H.R. 2273, 101st
Cong. Title IV (May 9, 1989). Provisions governing both existing
facilities and new construction were included in § 402, which 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." S. 933 at § 402(a);
H.R. 2273 at § 402(a). 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). Neither the House nor the
Senate bill contained any language regarding the owners, operators,
lessors, or lessees of the covered facilities.

Later in 1989, title IV was renumbered as title III, and the
requirements for new construction and existing facilities were separated
into two sections: the obligations for existing facilities were left in
what had been § 402 of the legislation (now renumbered to be § 302), and
the requirements for new construction were moved to new § 303. *See* S.
Rep. 116, 101st Cong., 1st Sess. 58-60, 68-69 (1989). At the same time,
"potential places of employment" were eliminated from the definition of
"public accommodation," so that the term (and new § 302) applied only to
twelve categories of "privately operated entities." [Id]{.underline}. at
58-59. New § 303 was made applicable to both public accommodations (as
redefined) and potential places of employment. [Id]{.underline}. at
68-69.

It was not until 1990, 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* 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. Indeed, it is quite clear that
that language was not intended in any way to define the scope of § 303;
to the contrary, the change in the language of § 302 was specifically
intended to clarify the coverage of § 302 itself, to make clear that the
parties covered by that section were not only those who operated public
accommodations, but also those who owned and leased them. As the House
Committee on the Judiciary explained:

The Committee adopted an amendment which clarifies that the prohibition
against discrimination "in the full and equal enjoyment of the goods,
services, facilities, privileges, advantages, and accommodations of any
place of public accommodation," applies to "any person who owns, leases
(or leases to), or operates a place of public accommodation."

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, leases (or leases to), or operates,"
language was added to § 302, Congress also amended § 303. Its coverage,
which previously had included public accommodations and "potential
places of employment," was redefined to include public accommodations
and "commercial facilities." Unlike § 302, however, no language was
added to § 303 to indicate that those who own, operate or lease the
facilities in question were the only parties with responsibilities under
§ 303. Certainly, if Congress had wished to restrict § 303's coverage in
that manner, it could have done so at the same time that it "clarified"
the coverage of § 302. In sum, 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.

**B. DIA\'s Duty to Comply With the ADA\'s New Construction Requirements
is Not Delegable.**

DIA contends that ADA compliance at Days Inn hotels is somebody else\'s
problem. According to DIA, its license agreements have assigned the duty
of ADA compliance to its licensees and, thus, relieved DIA of all ADA
liability. DIA\'s Mem. at 3-4, 21-24. But it is a well-settled matter of
law that the duty to comply with federal civil rights statutes such as
the ADA cannot be delegated.^11^[^11] [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); [Coates v. Bechtel]{.underline}, 811 F.2d 1045,
1051 (7th Cir. 1987) (under Fair Housing Act and § 1982, courts have
imputed wrongful acts of real estate agent to property owner, even if
not authorized or ratified).^12^[^12] Moreover, even if there were no
general prohibition against delegating duties to comply with federal
civil rights statutes, the ADA specifically addresses this issue. Under
§ 302 of the ADA: "\[a\]n 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." 42 U.S.C. § 12182(b)(1)(D) (emphasis added). The legislative
history makes clear that Congress intended this language to prevent
entities from escaping ADA liability through contractual arrangements
such as the one contained in DIA's license agreements: "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**." H.R. Rep. 485, Part 2, 101st Cong., 2d Sess. (1990)
at 104 (emphasis added).

Thus, while the provisions in DIA\'s license agreements and other
disclaimers of responsibility may give DIA a third-party action against
its licensees, those license provisions provide no defense to an action
by the United States under title III of the ADA.

**C. DIA\'s Reliance On [Neff v. American Dairy Queen]{.underline} is
Misplaced.**^13^[^13]

DIA relies on [Neff v. American Dairy Queen Corp.]{.underline}, 58 F.3d
1063 (5th Cir. 1995), [cert. denied]{.underline}, \_\_\_\_ U.S.
\_\_\_\_, 116 S. Ct. 704 (1996), in an attempt to show that it does not
operate the Champaign Days Inn or other Days Inn hotels.^14^[^14] That
reliance is misplaced. As a district court in the Fifth Circuit
previously noted in response to DIA's argument that [Neff]{.underline}
controlled the decision of DIA's liability in these matters, "\[i\]f
DIA/HFS indeed is relying on such precedent \[[Neff]{.underline}\], this
Court finds such reliance *to be of dubious nature given the
distinguishable facts and section of the ADA addressed in
[Neff]{.underline} versus that found in the present suit*." [Days Inns
of America, Inc. v. Reno]{.underline}, 935 F. Supp. 874, 878 n.21 (W.D.
Tx. 1996) (emphasis added).

1\. *[Neff]{.underline}*[ is wrongly decided]{.underline}.

In [Neff]{.underline}, the plaintiff alleged that a franchisor violated
§ 302 of the ADA by failing to remove architectural barriers to
accessibility at two of its franchisees' restaurants that had been built
before passage of the ADA. [Id]{.underline}. at 1065. Concluding that
the franchisor had minimal control over the removal of architectural
barriers at the restaurants, the Fifth Circuit held that the franchisor
was not liable under § 302 because it did not "operate" the restaurants
within the meaning of the ADA.^15^[^15] [Id]{.underline}. at 1066,
1068-69. Thus, in deciding what the term \"operate\" means under title
III, the Fifth Circuit focused solely on the question of who has control
over the ability

to remove architectural barriers --- not the more general question of
who has power or control over all of the operations of the facility. In
doing so, [Neff]{.underline} produces a rule that cannot be reconciled
with other provisions of § 302(b) and leads to absurd results.

[Neff]{.underline}\'s narrow inquiry --- looking only to see who had
authority to make physical changes to the facility --- is not consistent
with the language of the statute, and makes no sense. Section 302(a) of
the ADA prohibits discrimination by any entity that \"owns, leases (or
leases to), or operates a place of public accommodation.\" 42 U.S.C. §§
12182(a). Section 302(b) then defines several particular types of
activity considered to be discrimination. Under the [Neff]{.underline}
approach, the entities who would be covered under § 302(b) would vary
from prohibition to prohibition, because, under the [Neff]{.underline}
approach, the question would not be whether an entity operates the
public accommodation in a general sense (as is implied by § 302(a)), but
rather whether the entity has control over the activity in question in
the particular sub-paragraph of

§ 302(b) (things such as imposing eligibility criteria, modifying
policies and practices, or providing auxiliary aids and services). *See*
42 U.S.C. §§ 12182(b)(2)(A)(i), (ii), (iii). [Neff]{.underline} thus
suggests that rather than making a single determination of who is
covered under § 302(a), coverage must be determined separately for each
of § 302(b)\'s particular prohibitions. Nothing in the language of the
statute supports such an odd conclusion.^16^[^16]

Other courts confronted with this question have understood that § 302
requires an inquiry not into whether the party in question has authority
over the particular activity in question, but rather whether that party
can direct or control the operation of the facility itself.^17^[^17]
Indeed, the cases relied upon by the Fifth Circuit in [Neff]{.underline}
apply this general test. For instance, in [Carparts Distribution Center
Inc. v. Automotive Wholesalers Ass\'n of New England]{.underline}, 37
F.3d 12 (1st Cir. 1994), the First Circuit considered whether a
self-funded medical reimbursement plan was covered as an \"employer\"
under title I of the ADA. The First Circuit did not look just to the
plan\'s control over the alleged discrimina­tory act, as
[Neff]{.underline} implies. 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.^18^[^18]

2\. [This case is distinguishable from
]{.underline}*[Neff]{.underline}*.

In any event, this case is readily distinguishable from
[Neff]{.underline}. First and foremost, [Neff]{.underline} was decided
under § 302; this case has been filed under § 303. [Days Inns of
America, Inc.]{.underline}, 935 F. Supp. at 878 n.21. Second, the
[Neff]{.underline} court based its holding entirely on the language of
the franchise agreement in that case; the court did not consider any
other evidence of ADQ\'s control over the restaurants.
[Neff]{.underline}, 58 F.3d at 1065, 1067. And because the plaintiff
conceded that the franchise agreement was unambiguous, the court held
that the only question presented --- the construction of an unambiguous
contract --- was one of law. [Neff]{.underline}, 58 F.2d at 1065. In
general, however, courts have held that the nature and extent of control
exercised by a franchisor over a franchisee is a question of
fact.^19^[^19]

In this case, the degree of control that DIA exercises over its
licensees, including P & P, is evidenced not just by the license
agreement, but by a variety of other documentary evidence, and the
testimony of several witnesses. As discussed above and in the United
State's Statement of Undisputed Facts, the undisputed evidence shows
that DIA exercises considerable control over virtually all aspects of
the operation or management of the Champaign Days Inn, including
marketing, setting room rates, front desk operations, employee training,
employee relations, employee uniforms and job duties, dealing with
walk-up business, providing wake up calls and continental breakfasts,
fees charged for local telephone calls, fax services, and use of baby
cribs, purchasing supplies and equipment, maintenance, assuring the
cleanliness of rooms, maintaining books and records, and others. *See*
U.S. Mem. at 20-23; Facts ¶¶ 75-91; United States\' Response to Days
Inns of America, Inc. and HFS Incorporated\'s Statement of Undisputed
Material Facts ¶¶ 19-28. In addition, the undisputed facts further show
that DIA exercises control over a variety of other hotel functions or
operations, including the hotel\'s reservations system ( Facts ¶¶
114-117), provision of no-smoking rooms and making courtesy calls to
guests (Facts ¶¶ 118-120), training for hotel managers (Facts ¶¶
121-127), and handling guest complaints (Facts ¶¶ 137-143). By means of
its Operating Policies Manual, its Franchise Services Department, its
Quality Assurance program, and the Sunburst rating system, DIA controls
hundreds of aspects of the daily operation of hotels in its chain. *See*
Facts ¶¶ 92-113, 128-136. In sum, the evidence that DIA operates the
Champaign Days Inn and other Days Inn hotels is overwhelmingly great
compared to the meager evidence considered by the Fifth Circuit in
[Neff]{.underline}.

3\. [Even if ]{.underline}*[Neff]{.underline}*[ were correctly decided,
and applicable here, DIA would be responsible under the
]{.underline}*[Neff]{.underline}*[ "test" for the failure of the
Champaign Days Inn to be readily accessible to and usable by individuals
with disabilities.]{.underline}

Even under the test adopted by the Fifth Circuit in [Neff]{.underline},
DIA operates the Champaign Days Inn and other Days Inns.
[Neff]{.underline}, 58 F.3d at 1066-67 ("the relevant inquiry in a case
such as this one is whether \[the franchisor\] specifically controls the
modification of the franchises to improve their accessibility to the
disabled").^20^[^20] Thus, in a case alleging violation of § 303, the
relevant inquiry under [Neff]{.underline} would be whether DIA
specifically controlled the design and construction of the buildings at
issue. And, the undisputed facts make clear that DIA had such control
and exercised it.^21^[^21]

For instance, DIA provided its PDSM to the licensee, required P & P to
prepare plans that conformed to the Days Inn design standards (which
include accessibility requirements) contained in the PDSM, reviewed
those plans for compliance with DIA's design standards and other
standards and noted changes on them (including changes to improve the
accessibility of the hotel), monitored the progress of construction,
inspected the hotel upon its completion, before admitting it to the Days
Inn system, and repeatedly inspected the hotel after it became a part of
the Days Inn system. *See* Facts ¶¶ 48-66. Under the terms of both the
license agreement and the PDSM, DIA required P & P to design and
construct the hotel in compliance with the ADA, and

the license agreement gives DIA the affirmative authority to require P &
P to modify the hotel (both to gain intial admittance to the Days Inn
system, and to renovate the hotel later in the life of the agreement).
*See* Facts ¶¶ 31, 90-91. Moreover, if P & P refuses to comply with its
obligations under the license agreement (including the requirement to
comply with the ADA), DIA can suspend P & P from the Days Inn
reservation system, or terminate the agreement (and require P & P to
forfeit its investment in the franchise). Thus, even if the
[Neff]{.underline} test were relevant here, the United States has proved
that DIA has more than sufficient control over the design and
construction of the Champaign Days Inn and other Days Inns to meet that
test.

**D. DIA Exercises Considerably More Control Over its Licensees than is
Required by the Lanham Act.**

DIA argues that the controls that it exercises over the operations of
Days Inn hotels are no more than is required to preserve the validity of
its trade and service marks under the Lanham Act, 15 U.S.C. §§ 1051,
1061, and 1127 *et seq*. DIA's Mem. at 21. But DIA can point to no
provision of the Lanham Act that shields the owner of a trade or service
mark from liability under federal civil rights laws --- because there is
none. Most importantly, DIA exercises far more control over its
licensees' operations than the Lanham Act requires.

Under the Lanham Act, a franchisor need only exercise minimal controls
over its licensees to ensure that they are not deceiving the
unsuspecting public by selling goods bearing the mark that are of
inferior quality. [Oberlin v. Marlin American Corp.]{.underline}, 596
F.2d at 1327 (holding licensor must control certain "operations of its
licensees to ensure that the trademark is not used to deceive the
public"); [Kentucky Fried Chicken Corp. v. Diversified Packaging
Corp.]{.underline}, 549 F.2d 368, 387 (5th Cir. 1977) (same). As the
Seventh Circuit explained, "the scope of the

duty of supervision associated with a registered trademark is
commensurate with \[the\] narrow purpose" of the Lanham Act to avoid
deception. [Oberlin]{.underline}, 596 F.2d at 1327. A licensor is not
required to control the day-to-day operations of a licensee "beyond that
necessary to ensure uniform quality of the product or service."
[Id]{.underline}. Similarly, the Fifth Circuit explained that
"\[r\]etention of a trademark requires only minimal quality control,"
and the party seeking to establish that the control has been inadequate
must "carry \[a\] heavy burden." 549 F.2d at 387.^22^[^22]

The System Standards imposed by DIA in its OPM and its PDSM --- and as
enforced by its Quality Assurance program and Sunburst rating system ---
far exceed the quality control requirements of the Lanham Act. The OPM,
for instance, sets remarkably detailed requirements for all aspects of
the daily operations of Days Inn hotels, including specifying all
furnishing, fixtures, and supplies for guest rooms (*e.g.*, the number
of Montrose style number 17BTN skirt hangers with an O ring or
equivalent), the size, weight, color, and fiber content of all towels
and linens (maximum shrinkage allowed is ten percent), the size of the
ice bucket, and the size of the soaps). Facts ¶¶ 94.c, d. It sets
requirements for guest services, including wake-up service, a fax
machine, complimentary coffee, free local phone calls, free ice, free
use of baby cribs, and a complimentary continental breakfast consisting
of fruit juices, freshly brewed coffee, decaffeinated coffee, hot water,
tea bags, breakfast pastries, muffins, croissants, or local
specialities. Facts ¶¶ 94.i, o. It also sets detailed housekeeping and
maintenance requirements (*e.g.*, establishing a schedule for cleaning
the lint traps in dryers). And, the QA inspections evaluate dozens of
items for cleanliness and proper working condition. Facts ¶¶ 94.k, 99,
104.

Similarly, the PDSM contains hundreds of detailed specifications for the
design and construction of the hotel, many of which are not essential to
ensuring the quality of services provided to guests. In addition to
detailed requirements for guest rooms, the hotel lobby, and other public
areas, the PDSM includes site requirements (*e.g.*, for paving
materials, loading docks, dumpster pads, and swimming pool filtering
systems); structural requirements (*e.g.*, for soil borings, the
hotel\'s structural frame, roofing materials, and insulation in the
exterior walls); requirements for employee areas (*i.e.*, for the hotel
laundry, linen storage area, the capacity of washers and dryers, the
maintenance area, and the storage of equipment and materials in various
storage areas); and requirements for the hotel\'s electrical system
(*e.g.*, for circuit breakers, wiring conduits, transformer locations,
and lightning protection). Facts ¶ 35. DIA\'s expert witness admitted
that the PDSM contained requirements for areas of the hotel that guests
would never see, and that the PDSM contained numerous requirements that
had nothing to do with defining Days Inn\'s market position. Kiewel
Dep., Ex. 19, 168-69, 176-79.^23^[^23] In sum, there can be little
question that the requirements DIA imposes on its licensees far exceed
what is required by the Lanham Act.

**E. DIA\'s Reliance on Agency Law is Misplaced.**

To divert the Court from the real issues in this case, DIA devotes
considerable effort to arguing that it does not meet the requirements
for liability under principles of the law of agency,

a theory of liability on which the United States does not rely. DIA\'s
Mem. at 21-24. Citing numerous irrelevant cases, DIA insists, at length,
that control of the type exercised by DIA has been held insufficient to
make franchisors vicariously liable, under state law, for personal
injuries suffered on the premises of individual franchise locations.
*See* DIA\'s Mem. at 21-24 . But rulings by state courts on agency law
in personal injury cases are not relevant to DIA's liability under the
terms of a federal statute. The United States does not contend that DIA
should be held vicariously liable --- under agency law or any other law
--- for the actions of its franchisees. DIA's liability in this case
arises from its own actions and inactions. Thus, unlike [Hayman v.
Ramada Inn, Inc.]{.underline}, 357 S.E.2d 394, 397 (N.C. App. 1987), and
the other cases cited by DIA, liability here does [not]{.underline}
depend upon the existence of an agency relationship. *See* DIA's Mem. at
21-23.

DIA also relies upon state law agency cases to define the term
"operate," in the event that its reading of [Neff]{.underline} is not
adopted. DIA's Mem. at 20-23. But the cases cited by DIA make clear that
they rest on policy choices that are embodied in state law^24^[^24] ---
not on the very different policies embodied in federal civil rights law.
And, DIA has shown no basis whatsoever for concluding that Congress
wished to afford some special protection to franchisors. To the

contrary, Congress made clear that the purpose of the ADA is to provide
\"a clear and comprehensive national mandate for the elimina­tion of
dis­crim­ination against individuals with disabilities,\" 42 U.S.C.
§ 12101(b)(1), and to that end, Congress acted to "invoke the sweep of
congressional authority, including the power to enforce the fourteenth
amendment and to regulate commerce, in order to address the major areas
of discrimination faced day-to-day by people with disabilities." 42
U.S.C. § 12101(b)(4). There is simply no suggestion anywhere in the Act
or its legislative history that Congress intended to carve out a special
protection for franchis­ors, exempting them from the requirements placed
on all other American businesses.^25^[^25]^\ ^Moreover, it is well
settled that, unless otherwise defined, words appearing in a statute are
to be interpreted as having their ordinary, natural, or common meaning.
*See, e.g.,* [Smith v. United States]{.underline}, 508 U.S. 223, 228
(1993); [Perrin v. United States]{.underline}, 444 U.S. 37, 42 (1979).
Accordingly, the term "operate" must be given its ordinary meaning, not
some meaning developed in a specialized line of cases dealing with
another area of the law. And, under the ordinary, natural or

common meaning of operates, the facts show beyond dispute that DIA
operates the Champaign Days Inn.

**III. CONCLUSION**

For the reasons stated, the United States respectfully requests that
this Court deny DIA\'s motion for summary judgment.

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

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

ROBERTA STINAR KIRKENDALL

JEANINE M. WORDEN

THOMAS M. CONTOIS

MARGARITA M. PRIETO

Disability Rights Section

Civil Rights Division

U.S. Department of Justice

Post Office Box 66738

Washington, D.C. 20035-6738

\(202\) 307-0986

Dated: November 14, 1997

[^1]: ^1^As in the United States\' Memorandum in Support of its Motion
    for Summary Judgment ("U.S. Mem."), defendants DIA and HFS are
    referred to collectively as DIA, unless the context requires
    otherwise.

[^2]: ^2^DIA directs the Court's attention to the ruling in [United
    States v. Days Inns of America, Inc.]{.underline} (D.S.D.), where
    the U.S. District Court for the District of South Dakota granted
    DIA's motion for summary judgment, holding that DIA had not done
    enough in the design and construction of the Wall Days Inn to be
    held liable under § 303. But the South Dakota court's ruling was a
    very narrow one based on the facts relating to the Wall Days Inn.
    That ruling is not relevant to the issues before this Court because
    the facts that the court relied on in that case are very different
    from the facts relating to DIA's participation in the design and
    construction of the Champaign Days Inn. Moreover, the South Dakota
    court did not address the legal issues relating to the proper
    interpretation of § 303 that are before this Court other than to
    acknowledge that it would not revisit the holding of the Ellerbe
    court, which concluded that persons other than owners, operators,
    and lessors could be liable under § 303. Thus, the United States
    submits that the opinion in [United States v Days Inns of America,
    Inc.]{.underline} (D.S.D.) Is [not]{.underline} persuasive authority
    that would merit consideration in this case.

[^3]: ^3^Indeed, when Congress had the opportunity to apply the "owns,
    leases (or leases to), or operates" language to commercial
    facilities it chose not to do so. *See* *infra* 8-10.

[^4]: ^4^The statute includes no provision whatsoever regarding entities
    that own, lease, or operate [commercial facilities]{.underline}.
    Therefore, it necessarily follows from DIA\'s argument that the
    statute is ambiguous. [See]{.underline} [United States v. Ellerbe
    Becket, Inc.]{.underline}, \_\_\_ F. Supp. \_\_\_, 1997 WL 610275,
    \*7 n.4 (D. Minn. Oct. 2, 1997) (holding "own, operate and lease"
    language is not incorporated into § 303 and stating "\[t\]he Court
    would reach the same conclusion if it found that the silence of §
    303(a) with respect to parties responsible for violations, along
    with the reference to § 302(a) in § 303(a) constituted an ambiguity
    in the statute.").

[^5]: ^5^Section 302 of the ADA itself demonstrates that Congress has
    taken the same approach here. As discussed below, *see* Part II.A.2,
    as the legislation neared enactment, the scope of\
    § 302\'s coverage was expanded to include not just those parties who
    operate public accommodations, but the parties that own and lease
    them as well. In doing so, Congress brought within the coverage of §
    302 every party that might conceivably have responsibility for, or
    be in a position to ensure compliance with, the various
    non-discrimination requirements of §302.

[^6]: ^6^The Committee Report makes clear that there was no limitation
    on liability under the new construction provisions of the FHA: "The
    Committee believes that these provisions carefully facilitate the
    ability of tenants with handicaps to enjoy full use of their homes
    without imposing unreasonable requirements on homebuilders,
    landlords and non-handicapped tenants." [Id.]{.underline}
    [See]{.underline} [also]{.underline} 134 Cong. Rec. S10532-04
    \*61(Statement of Sen. Humphrey) ("bill subjects the designer and
    the builder to severe penalties if either designs or builds housing
    that fails to conform. . .").

[^7]: ^7^Indeed, early versions of the ADA were introduced in the 100th
    Congress and considered at the same time as the Fair Housing
    Amendments Act.

[^8]: ^8^The Supreme Court has made it clear that "legislative
    enactments should not be construed to render their provisions mere
    surplusage." [Dunn v. Commodity Futures Trading Comm'n]{.underline},
    \_\_\_ U.S. \_\_\_, 117 S. Ct. 913, 917 (1997). If, in fact,
    Congress had intended only to hold owners, operators, lessors and
    lessees responsible for violations of § 303, the inclusion of the
    term "design" would be meaningless.

[^9]: ^9^

    Title III\'s remedial provisions allow private actions to be brought
    [before]{.underline} a new facility is built inaccessibly. 42 U.S.C.
    § 12188(a)(1). That Congress authorized actions against buildings
    before they are completed --- based on nothing more than the designs
    for the facility --- further demonstrates the importance Congress
    attached to ensuring that those who design new facilities do so in
    compliance with the ADA. As Rep. Schroeder noted, "\[t\]he ADA
    recognizes that it is important to stop a violation of the act's
    access provisions before it occurs. It is a lot cheaper to make a
    building accessible to people with disabilities in the design stage
    than once the building is erected." 136 Cong. Rec. H2599-01,
    \*H2634. But if DIA\'s reading of the statute were correct, many
    individuals and entities who design new facilities would be excluded
    from coverage.

[^10]: ^10^

    DIA even goes so far as to suggest that § 303 should be limited by
    the "own, operate and

    lease" language because the heading of title III is "Public
    Accommodations and Services Operated by Private Entities." DIA's
    Mem. at 15 n.8. It is well settled that "the title of a statute and
    the heading of a section cannot limit the plain meaning of the
    text." [Brotherhood of Railroad Trainmen v. Baltimore & Ohio Ry.
    Co.]{.underline}, 331 U.S. 519, 528-29 (1947); [United States v.
    Minker]{.underline}, 350 U.S. 179, 185 (1956) (quoting same).
    [See]{.underline} [also]{.underline} [Johnson v. Commissioner of
    Internal Revenue]{.underline}, 114 F.3d 145, 150 (10th Cir. 1997)
    ("title to a statutory provision is not part of the law itself. .
    ."); [United States v. Jac Natori Co., Ltd.]{.underline}, 108 F.3d
    295, 299 (Fed. Cir. 1997) ("The titles of statutes are simply
    reference guides and cannot limit or contravene the statutory
    text.") Moreover, several provisions of title III are not limited to
    owners, operators, lessors and lessees. In addition to § 303,
    liability under § 309 extends to "[any person]{.underline} that
    offers examinations or courses. . ." 42 U.S.C. § 12189.
    [See]{.underline} [D'Amico v. New York State Bd. of Law
    Examiners]{.underline}, 813 F. Supp. 217, 221 (W.D.N.Y.
    1993)("person" defined to have same meaning as term in § 701 of
    Civil Rights Act); [Ware v. Wyoming Board of Law
    Examiners]{.underline}, 973 F. Supp. 1339, 1353 (D. Wy. 1997)
    (same).

[^11]: ^11^The Supreme Court has defined a non-delegable duty as "not
    merely an obligation to exercise care in \[a party's\] 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." [General Bldg.
    Contractors Ass\'n v. Pennsylvania]{.underline}, 458 U.S. 375,
    395-96 (1982) (citations omitted).

[^12]: ^12^*See also *[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);
    [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); [Marr v. Rife]{.underline}, 503
    F.2d 735, 741 (6th Cir. 1974) (holding the owner of an apartment
    building responsible for the discriminatory conduct of a resident
    manager \"because the duty to obey the law is non-delegable\"),
    *quoting* [United States v. Youritan Construction Co.]{.underline},
    370 F. Supp. 643, 649 (N.D. Calif. 1973), *aff\'d in part and rev\'d
    in part on other grounds*, 509 F.2d 626 (9th Cir. 1975)); [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).

[^13]: ^13^The United States does not believe it is necessary to prove
    that DIA operates the Champaign Days Inn, since DIA is liable under
    § 303 solely because it participated in the design and construction
    of the Champaign Days Inn. However, assuming for the sake of
    argument that DIA were correct in its reading of §§ 302 and 303, and
    that the coverage of § 303 were limited to owners, operators,
    lessors and lessees, DIA is nonetheless still liable for violating §
    303 because it operates the Champaign Days Inn (and other Days Inn
    hotels). *See* U.S. Mem. at 20-23.

[^14]: ^14^DIA argues that the United States does not contend that DIA
    controls the day-to-day

    operations of the Champaign Days Inn, or other Days Inn hotels.
    DIA\'s Mem. at 20. In making this argument, DIA relies solely on the
    uncorrected version of Ms. Savage\'s deposition transcript, and
    disregards a variety of other statements by the United States that
    it does contend that DIA controls the daily operations of the hotels
    in its system, including the Champaign Days Inn. *See* United
    States\' Responses to Days Inns of America, Inc.\'s Third Set of
    Interrogatories and Requests for Production, Ex. 46, at 1-9.

    Ms. Savage\'s testimony was not to the contrary. She testified that
    DIA exercised control over the operations of Days Inn hotels in a
    variety of ways, including the reservations system, the operating
    policies manual, other manuals, training programs, QA inspections,
    the Sunburst rating system, DIA\'s central handling of guest
    complaints, and others. Savage Dep., Ex. 44, at 283-85. Indeed, in
    quoting Ms. Savage in its memorandum (and in citing her deposition
    in support of this paragraph), DIA did not consult the errata sheet
    compiled by Ms. Savage upon reviewing the deposition transcript (and
    has not provided that errata sheet as an exhibit). *See*
    [id]{.underline}., errata sheet.

[^15]: ^15^While the [Neff]{.underline} court began its analysis with
    traditional definitions of the term "operates,"­ [i.e.,]{.underline}
    '\[t\]o control or direct the functioning of.' [id]{.underline}. at
    1065, the court proceeding to an inappropriately narrow test,
    considering only whether the entity had control over the prohibited
    activity at issue (the removal of archi­tec­tural barriers), not
    whether the entity had general control of the place of public
    accommodation. [Id.]{.underline} at 1066. As a result, the court
    only considered one provision of the ADQ license agreement, which
    gave American Dairy Queen the right to disapprove or veto structural
    changes to the facility. [Id.]{.underline} at 1068.

[^16]: ^16^The [Neff]{.underline} court does not explain, for instance,
    how (by any definition of \"operates\") a party who has control over
    the ability to make physical changes to the facility, but who has no
    other control over the business conducted there, nonetheless
    \"operates\" the facility. If such a party does \"operate\" the
    facility, the [Neff]{.underline} court fails to explain either 1)
    why it makes sense to hold that party responsible for the other
    obligations of § 302(b) as well --- such as providing auxiliary aids
    and services, or modifying the business\' policies and practices, or
    2) if the party is not to be held liable for those obligations, why
    not (since the party has already been held to be \"operating\" the
    facility).

[^17]: ^17^ *See, e.g.,* [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)).

[^18]: ^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. [Id]{.underline} Although it came to a
    contrary conclusion, the [Aikins]{.underline} court applied a
    similar analysis in finding that a physician did not operate a
    hospital within the meaning of the ADA. The court found that because
    he not only had no control over the specific prohibited activity ---
    the requirement to provide auxiliary aids and services to
    individuals who are deaf --- but also 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. 843 F. Supp. at 1335.

[^19]: ^19^[Oberlin v. Marlin American Corp.]{.underline}, 596 F.2d
    1322, 1326 (7th Cir. 1979) (legal status of relationship between
    franchisor and franchisee depends of facts of relationship); [Drexel
    v. Union Prescription Centers, Inc.]{.underline}, 582 F.2d 781,
    785-86 (3rd Cir. 1978) (treating question, arising under state law
    of agency, of whether franchisor operated retail store as one of
    fact).

[^20]: ^20^DIA contends that there must also be some showing that the
    franchisor "caused" the facility not to comply with the ADA. DIA's
    Mem. at 16-18. [Neff]{.underline} contains no such requirement. But
    even if DIA's interpretation were correct, the United States has
    made that showing. The undisputed facts show that DIA caused the
    Champaign Days Inn to be inaccessible: the PDSM which DIA provided
    to P & P was not consistent with the ADA, Facts ¶¶ 37-38; when DIA
    reviewed specifications and plans for the Champaign hotel, it did
    not review them for compliance with the ADA, or for compliance with
    DIA\'s own barrier-free requirements, Facts ¶¶ 146-148; and when DIA
    inspected and admitted the Champaign hotel into the Days Inn system,
    it ignored or failed to note blatant violations of the ADA, and
    failed to require P & P to bring the facility into compliance with
    the ADA, as required by the license agreement and the PDSM. Facts
    ¶ 147.

[^21]: ^21^DIA suggests, without any reasoning or analysis, that a
    Seventh Circuit decision interpreting totally unrelated statutory
    language in a federal environmental statute, CERCLA, should
    determine this Court's interpretation of whether DIA "operates" the
    Champaign Days Inn under § 302 of the ADA. DIA Memorandum at 18. It
    is absurd to suggest that the CERCLA definition has any meaning in
    the context of the ADA, a civil rights statute. Even assuming,
    [arguendo]{.underline}, there were any basis to compare the two
    provisions, DIA would be held to be an "operator" under either
    statutory definition. Courts have repeatedly held entities liable
    pursuant to CERCLA if they had the authority to "control," even if
    they did not exercise that authority. [HRW Systems, Inc. v.
    Washington Gas Light Co.]{.underline}, 823 F. Supp. 318 (D. Md.
    1993); [Ganton Technologies, Inc. v. Quadion Corp.]{.underline}, 834
    F. Supp. 1018 (N.D. Ill. 1993); [Pierson Sand & Gravel, Inc. v.
    Pierson Township]{.underline}, 851 F. Supp. 850 (W.D. Mich. 1994).
    DIA clearly has the authority to control the operations at its
    franchised locations, and operates Days Inn hotels, as demonstrated
    by the facts in this case.

[^22]: ^22^*See also* [Dawn Donut Co., Inc. v. Hart\'s Food Stores,
    Inc.]{.underline}, 267 F.2d 358, 367 (2d Cir. 1959) (licensor must
    take "some reasonable steps to prevent misuses of his trademark").

[^23]: ^23^It is not surprising that the PDSM exceeds what is required
    by the Lanham Act, given that the PDSM was originally developed not
    for the purposes of quality control for franchisees, but in
    connection with actual construction projects undertaken by DIA\'s
    predecessor in interest. *See* Facts ¶ 33. The manual was later
    distributed to franchisees, a practice which DIA continued when it
    took control of the company. [Id.]{.underline}

[^24]: ^24^That is, they recognize that there is a legitimate interest
    to be served by allowing franchisors to exercise some control over
    their franchisees, without making the franchisees, which are
    otherwise independent contractors, into the agents of the
    franchisors. *See, e.g.,* [Cislaw v. Southland Corp.]{.underline}, 4
    Cal. App. 4th 1284, 6 Cal. Rptr. 2d 386, 391 (Cal. Ct. App. 1992)
    ("The cases, taken as a whole, implicitly recognize that the
    franchisor\'s interest in the reputation of its entire system allows
    it to exercise certain controls over the enterprise without running
    the risk of transforming its independent contractor franchisee into
    an agent."). What DIA does not explain, however, is why this policy
    judgment, embedded in state law, should be imported into the ADA.

[^25]: ^25^Indeed, it is well established that federal, not state, law
    must define the contours of federal civil rights protections. As the
    Sixth Circuit observed, when confronted with an issue of whether
    state law of agency would govern a claim under the Fair Housing Act,
    "prior decisions in other areas of civil rights direct us to use
    federal --- not state --- law." [Marr v. Rife]{.underline}, 503 F.2d
    735, 740 (6th Cir. 1974) (discussing prior cases). That Court went
    on to explain that

    \[a\]n examination of the \[Fair Housing\] Act reveals a broad
    legislative plan to eliminate all traces of discrimination within
    the housing field. To allow such a purpose to be controlled by state
    law might well defeat this objective. We believe that in such a
    situation this Court is not restricted by the law of the various
    states, and that it should apply federal law.

    [Id]{.underline}. (citation omitted).