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3/22/2011Photo Enforcement Companies Accuse One Another of Deception
ATS and Redflex sue each other in federal cases over false claims.
The US Court of Appeals for the Ninth Circuit on Friday decided that photo enforcement vendors American Traffic Solutions (ATS) and Redflex were too much at odds with one another to participate in a court mediation program designed to settle tough cases without going to trial. Each firm has filed suit questioning the integrity and ethics of the other. Redflex refers to "ATS' pattern and practice of consistent false representations." ATS, in turn, claims Redflex has been making "false and misleading statements of fact concerning its photographic traffic enforcement products and services."
ATS fired the first shot in the legal war by suing Redflex in 2009 for importing radar units that were not certified by the Federal Communications Commission in violation of federal law. ATS alleged Redflex could not honestly advertise its services when using an illegal product. A jury threw out the case after deliberating for a few minutes. US District Court Judge Frederick J. Martone described the ATS argument as "extraordinarily weak." Redflex demanded that ATS pay $3,735,281.52 in attorneys' fees and court costs, but Martone rejected the request on February 28.
ATS appealed its overall loss in the case to the Ninth Circuit and Redflex appealed the loss of the $3.7 million in fees. Redflex also filed its own false advertising suit against ATS alleging that the Arizona-based company could not claim its speed and red light cameras were "Made in the USA" because they use Nikon cameras from Japan. US District Court Judge Susan R. Bolton last month allowed ATS to file a counterclaim that charged Redflex with lying on its website about which cities are under contract. ATS also took issue with claims by Redflex about being the industry leader.
"Redflex's statement that Redflex 'maintained number one position in its industry in revenue generated' is false and misleading because ATS, not Redflex, occupies the number one position in the industry in revenue generated," ATS lawyer Erick S. Ottoson wrote in a brief to the court. "ATS, not Redflex, occupies the number one position in the USA in terms of operational photographic traffic enforcement systems."
Redflex denied these charges on the grounds that the words on the Redflex website were vague and not meant literally. Other statements from the Australian company's chairman of the board were not advertising, the company argued.
"Many of the statements ATS cites were not made by the plaintiff Redflex and do not appear on its website," Redflex lawyer Laura H. Kennedy wrote. "They were made by the chairman of Redflex Holdings Limited, Redflex's parent company, to investors, not potential customers, and appear on that company's website."
Both the Ninth Circuit appeal and the trial before Judge Bolton are expected to stretch well into the year.
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