6/26/2014Redflex Bribery Battle Spills Into Federal Court
Federal judge issues preliminary ruling sending bribery-related red light camera case back to state court.
A federal judge last week sided with the former executive vice president of red light camera manufacturer Redflex Traffic Systems who is suing his former employer for wrongful termination. District Judge George H. Wu issued a tentative ruling last Thursday in favor of Aaron M. Rosenberg.
The Australian firm fired Rosenberg after he was caught bribing a top city official in Chicago, Illinois. The company then sued Rosenberg and his wife in an Arizona court. Rosenberg, who lives in Los Angeles, countersued in California Superior Court in February, arguing he was just following orders from the company.
For his suit, Rosenberg served court papers on the Arizona and the California offices of Redflex. Redflex rejected this service, calling the Arizona corporation Redflex Traffic Systems Inc a "sham defendant, which does not exist." The company insisted on removing the lawsuit to federal court because Rosenberg never worked for a California-based company.
"In the complaint, Mr. Rosenberg alleges the existence of a corporation organized and existing under the laws of the state of Arizona named 'Redflex Traffic Systems Inc,'" Redflex board member and former CEO Robert DeVincenzi stated in a declaration to the court. "Based on my knowledge and understanding of Redflex DE's corporate structure and on my review of business records, there is no 'Redflex Traffic Systems Inc' organized and existing under the laws of the state of Arizona."
Rosenberg countered by providing copies of contracts between Redflex and California cities bearing his signature. Redflex paid Rosenberg a base salary of $256,791 plus $541 per month for a car allowance. Rosenberg was given the the opportunity to win a bonus worth up to 90 percent of his salary by meeting various performance goals. For new contracts, he would keep a 3 percent cut of the first twelve months of photo ticket profit, a figure that dropped to 2 percent for all subsequent years. To win his bonuses, he had to execute 23 new contracts within nine months of being hired, stay on budget and hire "sales resources" in California, Florida, Texas and the Northeast.
"Based on the evidence Rosenberg has put forward, and resolving all disputed factual questions and state-law ambiguities in Rosenberg's favor, the court cannot conclude that Redflex DE has presented summary judgment-type evidence foreclosing any possibility that Rosenberg can show Redflex CA was his employer," Judge Wu concluded. "Thus, while the court is sympathetic to Redflex DE's argument that Rosenberg is trying to evade the Arizona action, the court cannot as a result exercise jurisdiction where such exercise is improper based on the applicable legal standards."
Rosenberg believes his case has a better chance being heard by a California court. He claims that he was fired two weeks after he gave detailed information to Chicago's inspector general about the company's policy of using gifts in Chicago and elsewhere to encourage officials to use and expand Redflex services. He says he is seeing a psychologist to deal with the trauma of the ongoing court battle.
"While Mr. Rosenberg is slowly now returning to a more normal life as time passes, Redflex's conduct has forever scarred and continues to scar Mr. Rosenberg," Rosenberg attorney James Burr Shields wrote. "[Redflex] went to extreme lengths to single out Mr. Rosenberg as the company fall guy, publicly beat him up and purposely cause harm to him and his family... Just thinking about Redflex's despicable conduct makes Mr. Rosenberg nauseous, sick, depressed and irritable."
The judge will hold continue discussion of the matter on July 7.