ATS Loses Traffic Camera Court Battle Against Redflex

The Newspaper
by The Newspaper

A federal jury ruled Thursday against a traffic camera company that had sought to impose a $20 million fine on its nearest rival. The panel of eight spent an hour-and-a-half to arrive at the verdict denying American Traffic Solutions (ATS) payment for contract revenue lost in twelve cities after the Australian firm Redflex Traffic Systems snuck uncertified equipment into the country in violation of Federal Communications Commission regulations.

Redflex admitted that the DRS-3 radar system that it used on every mobile speed camera citation the company issued in the US between 1997 to 2008 was illegal. ATS argued that when Redflex portrayed its services to city and state officials as fully compliant with the law, these statements amounted to false advertising under the Lanham Act. US District Court Judge Frederick J. Martone scolded ATS in the final days of the trial, giving a glimpse at the jury verdict that was yet to come.

“At best the plaintiff has an extraordinarily weak case,” Martone said with the jury out of the courtroom. “It is weak at every point.”

Before the six-day trial began, Martone had expressed his frustration with the conduct of both companies in written motions, singling out Redflex for the greatest criticism. ATS attorneys had laid out a systematic case that Redflex knowingly misled cities, but Martone opined that the conduct did not appear to meet the definitions in the Lanham Act which deals with false advertising that misleads consumers, not government agencies.

ATS CEO Jim Tuton and top company officials like Adam Draizin argued their position in frequently combative testimony. Although Tuton lost the case, his lawyers grilled Redflex Holdings Ltd. Board Member Karen Finley on the stand, forcing her to admit that her company misled the Arizona Department of Public Safety (DPS) regarding the legality of equipment used in the statewide photo radar contract, as follows:

ATTY: Mr Burke is a lawyer [who]… is writing this letter on behalf of Redflex to the chief procurement officer of Arizona DPS, is he not?

FINLEY: Yes.

ATTY: Let’s turn to page four of this letter. Now the first thing he says here is: ‘Redflex has the intention and ability to fulfill this contract with certified equipment. The Multanova and AGD-340 are now FCC certified.’ You see that?

FINLEY: Um, yeah.

ATTY: We know now by the date of this letter, August 12, 2008, certainly the AGD-340 was certified but the Multanova DRS-3 was not certified, was it?

FINLEY: But I’m not sure when we found that out.

ATTY: Excuse me ma’am, that’s not my question. We know to this good day — Mr Carpinteri testified for us — that the DRS was never certified and it’s still not certified. Do you recall his testimony about that?

FINLEY: Um, yeah.

ATTY: Your lawyer, Mr. Burke, here tells the DPS that the Multanova was FCC certified, does he not, ma’am?

FINLEY: That’s what he says.

The intense litigation has imposed a heavy toll on both firms since ATS filed suit in November 2008. Redflex reported that the case was the primary reason the company’s legal bills had reached $6.2 million for the year. Redflex opened a retaliatory Lanham Act case against ATS in which trial is pending. US District Court Judge Susan R. Bolton had scheduled a pretrial conference for June 28, but ATS succeeded in delaying the move until Bolton rules on a motion to disqualify the Redflex law firm, Greenberg Traurig, because it has inside information on ATS operations from prior legal work. Redflex paid Greenberg more than $1 million for its help in defeating ATS.

Civil Trial Minutes, Day Six (US District Court, District of Arizona, 5/27/2010)

[Courtesy: Thenewspaper.com]

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  • DC Bruce DC Bruce on May 28, 2010

    I don't have much sympathy for Judge Martone. He should have thrown the case out from the beginning: a representation made to a government agency is not "advertising" within the meaning of the Lanham Act, and the people who can sue for damages under the act are either competitors of the false advertiser or purchasers who were mislead. There are other non-statutory claims that might arise out of this conduct, but, unlike the Lanham Act, they don't provide for an award of attorneys' fees to a successful plaintiff. Get the hint????

  • Pariah Pariah on May 29, 2010

    What I want to know is who exactly IS the consumer here? When you consider the elements in the equation -- the scamera companies, the gov't, and the people -- it is clearly determinable that the companies themselves are not the consumer. If the gov't is not the consumer, then who is? You and I and our neighbors? I'm fairly certain that We the People did not pay to give our money away. So who the hell is the consumer? It seems to me that the consumer is the gov't agency which bought the service. Why cannot a gov't agency be a consumer? Is "consumer" concretely defined under law as a single, individual person? Admittedly, I am not educated in the arena of law, but intuition shouldn't need an education to know that this is a crock of s***. Public rapists cannot be held accountable because some d-bag judge neglects to identify the victim?

  • Dave M. The Outback alternates between decent design and goofy design every generation. 2005 was attractive, 2010 goofy. 2015 decent. 2020 good, but the ‘23 refresh hideous.Looking forward to the Outback hybrid in ‘26…..
  • Lorenzo Subaru had the ideal wagon - in 1995. The Legacy Outback was a straight two-box design with rear quarter and back windows you could see out of, and was available in brown with a 5-speed manual, as God and TTAC commenters intended. It's nice they're not raising prices, but when you've lost the plot, does it matter?
  • Bkojote Remember a month a go when Cleveland wanted to create a more walkable Cleveland and TTAC's 'BIG GOVERNMENT IS THE PROBLEM' dumbest and dullest all collectively crapped their diapers? Here's the thing- look on any American highway and it's littered with people who don't /want/ to be driving or shouldn't be. Look at every Becky on her phone during the morning commute in her Tucson, look at every Brad aggro driving his 84 month loan GMC. Hell look how many drivers nowadays can't even operate a headlight switch. You expect these people to understand a stoplight? In my neighborhood alone 4 people have been rear ended at lights from someone on their phone. Distracted driving over the past 10 years has spiked, and it's only going to get worse unless Becky has an alternative, because no judge is going to pull her license when 'she needs it to get to work!' but heaven forbid she not check fb/tiktok for 40 minutes a day.
  • Scott Shouldn't the The Italian Minister for Business be criticizing The Milano for being too ugly to be Italian?Better use of resources doing that....
  • Steve Biro Frankly, while I can do without Eyesight and automatic start-stop, there is generally less B-S with Subarus in terms of design, utility and off-road chops than with many other brands. I just hope that when they adopt Toyota’s hybrid system, they’ll also use Toyota’s eCVT.
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