9/3/2010Red Light Camera Firms Raise Stakes in Court Battle
Redflex and American Traffic Solutions step up legal battle against one another.
While red light camera firms are facing significant legal peril as vehicle owners in California and Florida are fighting citations in court through class action lawsuits, the stakes are even higher when the companies themselves battle one another in the courtroom. The US Court of Appeals for the Ninth Circuit is now reviewing a number of issues brought in the suit filed by American Traffic Solutions (ATS) against its Australian rival, Redflex Traffic Systems.
ATS had sued Redflex for advertising speed camera operations using radars that were illegally imported into the country. As reported by TheNewspaper in May, lost the case on all counts before a jury with the judge expressing the view that the ATS argument was "weak at every point." Nonetheless, ATS has filed an appeal to the Ninth Circuit. Meanwhile, Redflex is attempting to recover the $4.3 million it spent on the litigation after the firm's lead attorney, E. Jeffrey Walsh, claimed he had spent 12,782 hours on the case. Redflex insists it is entitled to attorney's fees because ATS filed the lawsuit in bad faith.
"ATS chose to use the courtroom as a forum to embarrass Redflex by, under the guise of proof of willfulness, accusing Redflex officials of lying to federal and state authorities," Walsh wrote in a July 27 filing. "ATS provided salacious fodder for bloggers and other media personnel who attended the trial and damaged Redflex's reputation and integrity... ATS unleashed a crusade against Redflex, its biggest competitor in the photo traffic enforcement industry, to damage it."
ATS countered that it not only acted in good faith, but that company president Jim Tuton sat down and arrived at an agreement in principle on a settlement with Redflex Holdings Board Member Karen Finley. Finley, however, was unable to convince the rest of the board to approve the deal.
"This court repeatedly chastised Redflex for motion practice that the court termed 'abusive,'" ATS lawyer Randy J. McClanahan replied in an August 16 filing. "After denying over ten motions filed by Redflex at the pretrial hearing, the court stated: 'I hate to think of what you're charging your clients for all of this. But if I were your client, I wouldn't pay you.'"
Redflex filed a retaliatory lawsuit against ATS that is scheduled for a pre-trial conference on September 27 before US District Court Judge Susan R. Bolton. Already, ATS has racked up a victory by convincing Bolton to disqualify the Redflex lawfirm Greenberg Traurig -- and Walsh -- from the case because it has inside knowledge of ATS operations from working on legal matters for the Arizona company.
"The court finds that Greenberg's prior representation of ATS was substantially related to the instant matter, Bolton ruled. "Redflex claims that ATS fraudulently obtained government contracts by, among other things, inflating the percentage of contracts it had won from other municipalities. As Greenberg represented ATS in its efforts to secure at least two of the contracts at issue, the relationship between the claim in this case and the prior representation is obvious and substantial."
On August 13, the Ninth Circuit slammed the door on Redflex after it asked to overturn Bolton's decision.
"Petitioner has not demonstrated that this case warrants the intervention of this court by means of the extraordinary remedy of mandamus," the three-judge appellate panel ruled. "Accordingly, the petition is denied."
A copy of the order is available in a 40k PDF file at the source link below.