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Lawsuit against Redflex seeks refunds for red light tickets, class action status

By Jonathan Bilyk | Jul 22, 2014

The company that installed and operated Chicago’s red light camera system could be compelled under the demands of a proposed class action lawsuit to pay back a large portion of the estimated $100 million it collected from fines paid by those ticketed.

On July 17, Chicago resident Matthew Falkner filed suit in federal court against Redflex Traffic Systems Inc., alleging that the company should not be entitled to the fees it has collected from fines paid by those ticketed for disobeying red lights because it allegedly bribed city officials to win the contract to install the cameras more than a decade ago.

“Both Redflex and the city of Chicago have recognized that the Redflex contract with the city of Chicago was secured through corrupt behavior by, in part, Redflex former executives,” the suit states. “As such, Redflex’s $100 million in revenue since 2003 generated under the corrupt contract represents ill-gotten gains that have unjustly enriched Redflex to the detriment of plaintiff (Falkner) and the putative class, and should be disgorged.”

Falkner wants the court to certify a class of “hundreds of thousands of persons” who received red light camera tickets and have paid the associated $100 fine since 2003. Falkner alleges he received a ticket and paid the fine in January 2013.

Although Falkner does not specify a dollar amount sought by the potential class, his suit asks the court to order Redflex to pay “all ill-gotten gains taken and withheld … secured by illegal means,” as well as an order for “restitution to prevent unjust enrichment.”

The City of Chicago is not named as a defendant in the suit.

Falkner is being represented by Chicago attorney Thomas C. Cronin, as well as Thomas J. Connick and Edward W. Cochran in Ohio.

Falkner’s suit comes in the wake of a series of scandals involving the company. Last year, the president, chief financial officer and legal counsel of Arizona-based Redflex all resigned after an outside investigator confirmed Redflex paid more than $2 million in possible bribes under a “protracted and covert scheme” to secure Chicago’s red light camera contract.

The scandal was exposed through investigations conducted by The Chicago Tribune, and the Redflex has since lost its contact with the city of Chicago.

In his complaint, Falkner alleges the bribes were also used to help the company establish favorable terms for itself in the municipal contracts, and particularly were used to set the amount Redflex would collect from each red light ticket issued by the city through the camera traffic enforcement program.

“As a direct result of the bribery scheme, defendants (Redflex) were able to contractually retain approximately 20-25 percent of all ‘ticket revenue’ generated by tickets paid by class members,” Falkner alleges.

Since 2003, the suit states the city of Chicago has collected more than $500 million in red light camera ticket fines from its network of 384 red light cameras situated in various intersections throughout the city.

Redflex’s share of the city’s red light camera ticket revenue accounts for 13 percent of the its revenue, according to the complaint.

Falkner’s attorneys contend the alleged bribery scheme should void Redflex’s claim to its share of the red light camera ticket revenue in the city, and the company should be forced to repay what they have collected to the people who paid the fines.

Court records show U.S. District Judge Amy J. St. Eve has set an initial status hearing in the matter for Aug. 27. The parties are set to file a joint status report by Aug. 22

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