Minneapolis, Minnesota is angry enough at being forced to refund $2.6 million in red light camera tickets that it has filed a lawsuit against the private company it hired to issue those citations. The city last month filed a lawsuit in Hennepin County Court to recover damages, but Redflex Traffic Systems of Australia yesterday asked the US District Court for the District of Minnesota to take over the case.

"The constitutionality of the (city) ordinance was challenged and the Minnesota Supreme Court held it was pre-empted by state law (view decision)," Minneapolis City Attorney Susan L. Segal wrote in a brief to the county court. "As a result of that challenge, the city incurred substantial losses."

Minneapolis wants that money back. It had contracted with Redflex on March 14, 2005 for a "turn-key service contract... inclusive of all hardware, software and support service required to implement and maintain the system" which consisted of a dozen automated ticketing machines. The contract required that Redflex abide by all state and federal laws and to indemnify the city against all legal liability from court challenges to the program. According to the state's highest court, the city had no legal authority to allow Redflex to issue traffic citations. It was forced to settle a class action lawsuit filed by Willard Shapira by agreeing to refund every citation.

"The city has incurred substantial expenses, costs and attorney's fees as a result of the Shapira lawsuit and the pre-emption of the ordinance, independent of the reimbursement of fine revenue," Segal wrote.

This, however, was not the end of the financial burdens for Minneapolis. After the cameras were installed, Redflex got caught in a billing dispute between the contractor responsible for the installation work, Network Electric, and its subcontractor, Collins Electrical Systems. Collins was supposed to be paid by Network Electric, but it did not receive payment. As a result, Collins sued the city and a judge ordered the city to pay $163,516.48 in unpaid bills and $181,804 in legal costs to the subcontractor. The city argues that, by contract, these costs must be paid by Redflex.

"The city was not to provide any monies for installation, had no responsibility for the installation or performance of any electrical work, and had no privity of contract or any relationship with any subcontractors Redflex hired," Segal wrote. "Now, as a result of Redflex's negligence in failing to procure a payment bond, judgment has been entered against the city for the remaining payment owed to Collins. The city has paid the remaining payment to Collins, which is more than its fair share."

Minneapolis did not provide a damage figure in its filing, but based on the losses described, it could exceed $3 million. The Redflex filing is available in a 255k PDF file at the source link below.