DJ# 202-3-18



  1. The parties to this Settlement Agreement are the United States of America, Shanghai Cottage at Fairhope, Inc. ("Shanghai Cottage") and Xian Chu Ou.

    Shanghai Cottage is an Alabama corporation which operates a privately owned restaurant located at 22530 Highway 98, Fairhope, AL 36532.

    Xian Chu Ou is the sole owner, shareholder, member or manager of the restaurant.

  2. This Agreement is reached under Title III of the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§12181 et seq. and its implementing regulation, 28 C.F.R. Part 36, to resolve an investigation initiated by the United States Attorney's Office for the Southern District of Alabama after it was informed by Corey Fancher that he and his wife had been refused service and asked to leave Shanghai Cottage because Corey Fancher was accompanied by his service animal.
  3. Shanghai Cottage is a place of public accommodation under 42 U.S.C. § 12181(7)(B) and 28 C.F.R. § 36.104. Xian Chu Ou as sole owner and operator of Shanghai Cottage, acknowledges that the restaurant is a place of public accommodation covered by Title III of the ADA.


  1. The United States found in its investigation that on Sunday, August 14, 2011, complainant Corey Fancher, accompanied by his wife, visited Shanghai Cottage. Because he is blind, Mr. Fancher's service animal accompanied them. While inside the restaurant, the Fanchers asked to be seated and were then told by the hostess that "no dogs were allowed." Further, the hostess informed the Fanchers that they must leave the premises of Shanghai Cottage. Mr. Fancher informed the hostess he was blind and that the dog was his service animal. Following a discussion in which the Fanchers informed the hostess they had the right to dine in this restaurant accompanied with Mr. Fancher's service animal, and after other patrons also informed the hostess she should allow the couple to dine with their service animal, the hostess nevertheless required the Fanchers to leave the premises.

    After being refused service and required to leave the restaurant and while the Fanchers were waiting along the sidewalk outside and away from Shanghai Cottage for their friend's arrival to organize an alternate place to dine, the hostess contacted Xian Chu Ou who was not present at the restaurant premises. Following that communication, the hostess went outside and hailed the Fanchers to let them know she was mistaken and that they could, after all, dine in Shanghai Cottage if they still desired. Following the disagreement, the embarrassment, and the upsetting circumstances of being refused service at a public accommodation, the Fanchers declined and continued on to a different restaurant with their friend who by then had joined them.

  2. As a result of its investigation, the United States has determined that Corey Fancher was denied equal access to the goods and services of the Shanghai Cottage when it failed to modify its policies, practices, and procedures to permit the use of a service animal by an individual with a disability. 42 U.S.C. § 12182(a); 28 C.F.R. § 36.302.
  3. In a letter dated January 9, 2012, to counsel for the United States, Xian Chu Ou expressed the reason for the hostess' refusal of service to the Fanchers was from concern that she would be committing a Health Department violation if she allowed the dog in the restaurant. As a further result of its investigation, the United States determined the 2005 Health Code applicable in Baldwin County, Alabama on August 14, 2011 expressly exempts service animals accompanying their owners, from the general prohibition against animals entering restaurants.
  4. The parties have determined their respective interests can be met without engaging in litigation, and this Agreement is made to provide access to persons with disabilities and avoid the costs as well as the burdens of litigation.


  1. Consistent with the law, Shanghai Cottage and Xian Chu Ou, shall not discriminate against any individual on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of the Shanghai Cottage by excluding or providing unequal treatment to persons with disabilities who use service animals.
  2. Shanghai Cottage and Xian Chu Ou shall adopt, maintain, and enforce the policy attached as Attachment A to this Settlement Agreement, which covers treatment of customers using service animals. Within 15 days after the effective date of this Agreement, Shanghai Cottage shall provide a copy of the policy in Attachment A to each employee or owner or contract worker ("staff") of Shanghai Cottage. This restaurant shall post a copy of the policy in the area of the restaurant where staff are given information on company policy (e.g., Worker's Compensation, Wage and Hour Laws, etc.). The policy will be communicated to staff in English and in any additional language(s) necessary for all staff to understand the policy.
  3. Within 30 days after the effective date of this Agreement, Shanghai Cottage and Xian Chu Ou will also develop or procure a sign, not less than 6" x 12" with a font of 48, stating "This Restaurant Welcomes Customers With Disabilities Who Are Accompanied By Their Service Animals," which will also include this message in Braille. The sign will be installed next to the entry door of the restaurant at a height of 60 inches from the ground to the centerline of the sign.
  4. Shanghai Cottage and Xian Chu Ou shall pay a civil penalty of TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500.00) by check made payable to the "United States of America." 42 U.S.C. § 12188(b)(2)(C). This payment will be delivered with this signed Agreement to Assistant U.S. Attorney Gary Alan Moore, United States Attorney's Office, 63 South Royal Street, Suite 600, Mobile, AL 36602. This liability is a joint and several obligation of Shanghai Cottage and Xian Chu Ou.
  5. All staff or owners who may be in contact with the public (including, but not limited to, hosts, hostesses, wait staff, bartenders, whether employees or contract workers, and similar personnel) of Shanghai Cottage shall undergo suitable training on the obligations of public accommodations to serve persons with disabilities. This training shall be concluded for current staff and Xian Chu Ou within 30 days of the date of this Settlement Agreement. All future staff or owners shall be provided this same training within 30 days of their date of hire. The training, for purposes of this Settlement Agreement only, and which cannot be cited as precedent, shall include each staff member or owner being provided a copy of the "Policy" attached hereto as Exhibit A; a copy of the explanatory items attached hereto as B ("Commonly Asked Questions About Service Animals in Places of Business"); and C ("ADA 2010 Revised Requirements for Service Animals"). If the staff member or owner does not read and comprehend the English language, Xian Chu Ou (or future owner of Shanghai Cottage), shall arrange for this information to be communicated to that staff or owner in their respective native languages so that each staff member or owner will have a full and complete understanding. Each staff member or owner shall date, sign and print their respective names legibly on the Policy indicating their understanding and agreement to abide by the Policy adopted by Shanghai Cottage.

    For the duration of this Settlement Agreement, upon the anniversary of its effective date, Xian Chu Ou or other future owner of Shanghai Cottage will provide copies of the signed Policy forms described just above to the U. S. Attorney's Office at the address provided herein below.


  1. In consideration for this Agreement, the United States agrees to refrain from filing any civil lawsuit based on the incident that occurred August 14, 2011. The United States reserves, however, the right to file a civil lawsuit to enforce this Agreement under the terms of paragraph 14.
  2. If Shanghai Cottage and/or Xian Chu Ou fail to take any of the actions described in Section III of this Agreement under the terms and time periods specified, without obtaining sufficient advance written approval from the United States, such failure shall be considered a subsequent violation under 42 U.S.C. § 12188(b)(2)(C)(ii) and 28 C.F.R. § 36.504(a)(3)(ii), and Shanghai Cottage and Xian Chu Ou will correct this noncompliance within 30 days of being notified of the noncompliance and shall be liable to the United States of America for a civil penalty of at least $1,000 for each required action not taken in addition to any appropriate compensatory damages caused by the failure to comply. Payment of the penalty shall not be the exclusive remedy of the United States upon any breach of this Settlement Agreement by Shanghai Cottage and Xian Chu Ou.
  3. Failure by the United States Department of Justice to enforce this entire Agreement, or any provision thereof, with regard to any deadline or any other provision will not be construed as a waiver of its right to do so for other deadlines and provisions of this Agreement.
  4. The United States Attorney's Office does not intend any aspect of this Agreement to evidence a legal interpretation of the ADA or any state accessibility law.
  5. This Agreement is a public document. A copy of this document, or any information contained in it, may be made available to any person.
  6. This Agreement is binding on Shanghai Cottage and Xian Chu Ou. This Agreement is also binding on any successors in interest to Shanghai Cottage and Xian Chu Ou, and each has a duty to notify all such successors in interest.
  7. This Agreement is the entire agreement between the United States of America, Shanghai Cottage and Xian Chu Ou. No other statement, promise, or agreement, either written or oral, made by either party or agents of either party, not in this written Agreement will be enforceable.
  8. This Agreement is limited to the facts in it. This Agreement does not purport to remedy any other potential violations of the ADA or any other Federal law. This Agreement does not purport to list all violations of the Americans with Disabilities Act that may have occurred or are occurring at Shanghai Cottage.
  9. The individuals signing this Agreement represent that they are authorized to bind the parties to this Agreement.
  10. Notices of any kind required or contemplated under this Agreement shall be made by mailing the notice via United States Postal Service, first class certified mail, return receipt requested. Notice will be considered given on the date of receipt identified on the return receipt. Notices to the United States Attorney's Office shall be mailed to the address in the signature block below of the undersigned Assistant U.S. Attorney. Notices to the Shanghai Cottage and/or Xian Chu Ou shall be mailed to 22530 Highway 98, Fairhope, AL 36532.
  11. Deadlines listed in this Agreement that fall on weekends or holidays will be extended to the next business day.
  12. The effective date of this Agreement is the latest-dated signature below. The Agreement will remain in effect until three years after the Effective Date.

United States Attorney

By: __________________
Gary Alan Moore
Assistant United States Attorney
63 South Royal Street, Suite 600
Mobile, AL 36602
Date: March 7, 2012


Xian Chu Ou

Date: February 28, 2012
Shanghai Cottage of Fairhope, Inc.
By: Xian Chu Ou
Its: _______________________
Date: February 28, 2012
Walter M. Cook
Attorney for Xian Chu Ou and Shanghai Cottage at Fairhope, Inc.
Phelps Dunbar, LLP
2 North Royal Street
Mobile, AL 36602

Date: February 28, 2012

Exhibit A


Shanghai Cottage is committed to making reasonable accommodations in its policies, practices, and procedures to permit the use of service animals by persons with disabilities. Service animals play an important role in ensuring the independence of people with disabilities, and it is therefore our policy to welcome into our restaurant any animal that is individually trained to assist a person with a disability.

Requirements with Regard to Service Animals:

Most of the time, people with disabilities who use service animals can be easily identified without any need for questioning. If we can tell by looking, it is our policy not to make an individual feel unwelcome by asking questions. If we are unsure whether an animal meets the definition of a service animal, it is our policy to ask the individual only two questions at the point that the individual seeks entry to the restaurant:

If the individual says yes to the first question and explains the work or tasks that the animal is trained to perform, we will welcome the person and service animal into the restaurant without asking any additional questions about his or her service animal. We will not ask an individual questions about his or her disability. We will not ask an individual to show a license, certification, or special ID card as proof of their animal's training. We must permit service animals to accompany individuals with disabilities to all areas of our restaurant normally used by customers or other members of the public and will treat individuals with service animals with the same courtesy and respect that Shanghai Cottage affords to all of our customers.

Manager Responsibilities:

Shanghai Cottage has the right to exclude a service animal from the restaurant if the dog is out of control and the handler does not take effective action to control it, or the dog is not housebroken. Each situation will be considered individually. When there is a legitimate reason to ask that a service animal be removed, staff must offer the person with the disability the opportunity to obtain goods or services without the animal's presence. Only an owner of Shanghai Cottage or someone he or she designates can make the decision to exclude a service animal. Therefore, if you think that a service animal should be removed, confer with the owner or his designee first and let them make the final decision and handle this issue with the customer instead of you.


I have read (or had explained to me in a language I understand) the foregoing Policy, the documents entitled "Commonly Asked Questions About Service Animals in Places of Businesses" and "ADA 2010 Revised Requirements - Service Animals" and agree to abide by the requirements contained therein.
DATE ________________ EMPLOYEE'S SIGNATURE ____________________
EMPLOYEE'S PRINTED NAME ____________________

Exhibit A

Exhibit B

Commonly Asked Questions About Service Animals in a Place of Business

Exhibit C

ADA 2010 Revised Requirements: Service Animals