10/25/2010California: Class Action Lawsuit Hits Federal Court
Federal court hears class action lawsuit seeking refund of every red light camera ticket issued in 59 California cities.
A class action lawsuit against fifty-nine red light camera programs in the state of California will be heard before Judge William H. Alsup in the US District Court for the Northern District of California. Attorney Bruce L. Simon, who is suing Redflex Traffic Systems and American Traffic Solutions (ATS), moved Friday that the case return to the state court system. Simon argues that the contracts of Redflex and ATS with municipalities are illegal under California law.
Simon had initially filed the case on behalf of motorist S.D. Jadeja in the San Mateo County Superior Court, a venue that has already ruled that red light camera cost-neutrality contracts violate state law (view decision). The class action suit is designed to go after the companies profiting from this type of illegal arrangement. ATS moved last month to have the case heard in federal court where judges have ruled more favorably toward automated ticketing machines. Simon wants the case back in the state courts.
"More than two-thirds of the putative class members are citizens of California, all of the alleged harm and wrongdoing occurred in California, the claims are based entirely on California law, and one of the three defendants [i.e., Redflex] is a citizen of California whose actions form a significant basis for the claims here and against whom plaintiff seeks significant relief," Simon wrote in his motion to remand the case back to San Mateo.
Simon points out that Redflex, an Australian company, calls itself a California-based firm in 62 percent of the contracts it signed in the Golden State. The language variously refers to "Redflex Traffic Systems (California)," "Redflex Traffic Systems, Inc., a California corporation" or lists its principal place of business as Culver City, California. Under California law, class action cases designated as a "local controversy" are to be heard in state, not federal, court. Simon argues that every aspect of the case is local.
"All of the alleged conduct occurred in California and all harm and damages were suffered in California," Simon wrote. "The cornerstone of this case is the existence of unlawful contracts, and the operation of automated traffic enforcement equipment under those contracts, in violation of both the California Vehicle Code and California Business and Professions Code."
Under the cost neutrality clause, Redflex and ATS are compensated at a rate of 100 percent of the ticket revenue collected up to a certain amount. Beyond that cap, the city keeps all revenue. The California Vehicle Code specifically prohibits red light camera contractors from being compensated based on the amount of revenue collected. For that reason, Simon wants every ticket issued under a cost-neutrality contract refunded, an amount that could reach into the hundreds of millions of dollars. San Mateo County, for example, reported $13,802,808 worth of red light camera tickets last year alone.