Vending Machines and Websites – A False Equivalency

Eve HillBy Eve Hill

The Department of Justice recently filed an amicus brief with the Supreme Court in Magee v. Coca-Cola Refreshments USA, Inc. that is being described as affecting the ongoing question of whether websites are covered by Title III of the Americans with Disabilities Act. The DOJ brief is already being cited in defense briefs in court, arguing that it foreshadows a shift in position by DOJ on the coverage of websites. In fact, it states exactly the opposite.

DOJ has maintained, since 1996, that the websites of public accommodations are covered under Title III of the ADA. The ADA lists 12 types of public accommodations – including establishments serving food or drink, places of entertainment, sales or rental establishments, and service establishments. Entities that don’t fit into the list are not covered by the ADA, meaning they are free to refuse to serve people with disabilities. Some businesses have argued that they should be exempt from the ADA to the extent they offer their goods or services through the internet because in some places the ADA and its regulations refer to covering “places” or “facilities” of public accommodation and they say the internet isn’t a place.

Courts have been fairly consistent in finding that public accommodations that operate both physical locations and websites are covered by the ADA. However, appellate courts (mostly in non-internet cases) have split over whether sales of goods and services are covered when they do not involve a visit to a physical location.

The plaintiff in Magee said Coca-Cola’s traditional glass-front vending machines violated Title III of the ADA because a blind person can’t see which beverage is labeled with which code, and, therefore, can’t independently punch the code of the beverage he wants into the vending machine’s keypad. But rather than suing the businesses where the vending machines were located, this plaintiff sued the vending machine manufacturer. He argued that the machines, themselves, were public accommodations under Title III of the ADA. Title III of the ADA lists examples of “sales or rental establishments,” like “a bakery, grocery store, clothing store, hardware store, [or] shopping center.” The district court in Magee found that vending machines were not sufficiently like the stores listed to be considered public accommodations. The Court of Appeals agreed that the vending machines, themselves, were not public accommodations because they were not like the stores listed. The Fifth Circuit held, “Based on the unambiguous language of 42 U.S.C. § 12181(7)(E), we conclude that Coca-Cola’s vending machines are not ‘sales establishments’ under the plain meaning of that term and therefore are not ‘places of public accommodation’ under Title III of the ADA. We therefore need not consider whether the vending machines are ‘facilities’ ….” The Appeals Court discussed the dictionary definitions of “establishment” as involving a physical building or location, but that hardly distinguishes the physical vending machines at issue in the case.

The plaintiff sought review by the Supreme Court, which asked DOJ for its opinion. DOJ agreed that vending machines were not sales establishments, but explained that coverage involves several factors, including 1) the sale of goods to the public, 2) the existence of a discrete, standalone location or identity, and 3) operation by an on-site proprietor or employees. While vending machines sell goods to the public, they are not a discrete business, but are a furnishing, amenity, or piece of equipment, and they operate without staff assistance or oversight.

Online-only businesses, such as Blue Apron, who raise this case in their defense, hope these factors will rule out internet-only businesses as well. However, DOJ was explicit that such arguments should not succeed. DOJ said,

“This does not mean that the ADA phrase ‘sales or rental establishment’ is categorically limited to operations that possess all three of the foregoing characteristics…. The term ‘sales or rental establishment’ likewise is not categorically limited to businesses that are staffed by human proprietors or employees. Congress’s inclusion of a catch-all provision serves in part to facilitate the ADA’s application to new businesses that utilize technologies or methods of operation that were unknown when the statute was enacted in 1990. In particular, businesses may develop sophisticated automation capable of performing complex transactions that closely resemble — or fully replace – the traditional establishments listed in Title III. [Describing Amazon Go’s fully automated grocery store]. In that situation, a store could qualify as an ADA ‘sales establishment’ even though automated devices perform functions that human employees would have performed when the ADA was enacted…. [But] [t]he stark differences between respondent’s beverage vending machines and the enumerated sales establishments are particularly significant because vending machines had long been in operation when the ADA was enacted…. If Congress intended to include vending machines among the many entities it listed as places of public accommodation, ‘one would have expected a clearer indication of that intent.”

Like the Amazon Go store, most online-only businesses 1) sell to the public, 2) have a discreet business identity, and 3) have a proprietor or staff (customer service staff, online chat staff, and staff who fill and deliver orders) or have replaced such staff functions with new technologies, such as the internet, that emerged since the ADA’s enactment.

DOJ also went on to explain: “[this case] does not implicate the question whether a Title III plaintiff must allege discrimination with a nexus to a physical location. The Fifth Circuit did not conclude that a vending machine lacks a physical identity; it merely recognized that not every physical object is a ‘place of public accommodation.’ This case would therefore be an unsuitable vehicle for resolving the division over Title III’s application to goods or services without a nexus to a physical place.”

Businesses who hope this brief indicates a change in position by DOJ after 21 years of consistency, are clinging to a thin reed.  The Supreme Court will consider whether that reed is worth arguing about on September 25.

Authored by

Eve Hill Partner