The city of Houston, Texas announced Friday that it would pay American Traffic Solutions (ATS) $4.8 million to settle the lawsuit the company set up after voters rejected red light cameras in November 2010. Upon approval by the city council Wednesday, the Arizona firm will receive $2.3 million up front with another $2.4 million provided as the company collects on unpaid citations over the next three years.

ATS was able to extract this sum from the city for two reasons. First, former Mayor Bill White removed an early termination clause from the red light camera contract in an attempt to save the camera program through the year 2014 in the event the state legislature passed legislation outlawing cameras. As a result, ATS demanded the share of ticket profits it would have received through that date. Second, ATS had an ally in US District Court Judge Lynn N. Hughes, who overturned the election results and sided with ATS at every step. For example, when ATS lawyer Andy Taylor complained in a November 26, 2010 hearing that the city required ATS to take down its cameras, Hughes came to the rescue.

"I can cure that," Hughes said, ordering the city to keep the cameras up.

The city council did have the power to stop the red light cameras from issuing tickets, so it ordered the systems deactivated on August 24, 2011. Houston came back to Hughes asking him to modify his order so that the cameras could be permanently removed, pursuant to a city ordinance requiring them to come down.

"The city of Houston's motion to compel American Traffic Solutions to remove the red light cameras is denied," Hughes ruled on January 16, 2012.

Hughes has close ties with ATS, having served on the bench for 25 years with Judge David Hittner, the father of ATS General Counsel George Hittner. His ruling is now under review by the Fifth US Circuit Court of Appeals which heard oral arguments on January 3. Randall Kubosh and Francis M. Kubosh sponsored the anti-camera initiative and want to see the public vote upheld.

"Appellants argue that the Texas Election Code protects the right of Texas voters to intervene in defense of a measure election, a right subverted by the city's collusive filing of a declaratory judgment suit that gave ATS an opportunity to nullify the Proposition 3 election it would never have had without the city's help," the Kubosh attorney David A. Furlow argued in a Friday filing with the Fifth Circuit. "Denial of their right to defend the Proposition 3 election and the no-red-light-camera votes they cast in it would render their constitutional rights meaningless."

Houston and ATS came to a quick settlement in the hopes that this appeal would be dismissed as moot. Current Mayor Annise Parker insisted the multi-million dollar payment represents the best deal that could have been struck under the circumstances.

"I am thankful that traffic violators, not Houston taxpayers, will be paying for this," Parker said in a statement. "This is a reasonable settlement and I thank the city legal department for its diligence in getting it done."

A copy of Judge Hughes' January 16 order is available in a 40k PDF file at the source link below.