Cedar Rapids City Council votes to refund or cancel $17 million in fines to settle a lawsuit over traffic cameras

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Photo by Kurt Zenisek

The Cedar Rapids City Council voted unanimously on Tuesday to settle a class action lawsuit that challenged the methods the city used to collect unpaid traffic camera fines. The lawsuit was filed in January 2018, a month after the city sent 221,000 notices to people with unpaid traffic camera citations, telling them to pay up or the outstanding amount would be sent to the Iowa Department of Administrative Service’s offset program for collection.

A late payment fee equal to 25 percent of the fine was added to the amount owed if the fine was sent for collection.

The offset program is used to collect debts owed to state and local government agencies. It seizes all state payments — including state tax refunds — to an individual until the debt has been paid.

The city was also turning over unpaid fines to a private collection agency, Municipal Collections of America.

The lawsuit alleged the city was violating the due process rights of motorists, because it treated people who hadn’t responded to its traffic fine notices as if they had been found guilty in a judicial proceeding, even though the alleged violation had never been submitted to a judge. The lawsuit also alleged the city’s process for appealing a ticket was inadequate.

The Iowa Supreme Court ruled in January that the city’s use of traffic cameras was legal, but that ruling left open the question of whether the city could attempt to collect fines without either an admission of guilt by the motorist or a judge determining the ticket was valid.

By that time, the city had already stopped using the state’s offset program and the private collection agency. Cedar Rapids suspended what it called “proactive collection methods” on Sept. 4, 2018, but did not inform the public it had done so until February.

According to the terms of the settlement, the city will refund approximately $3 million in fines and late fees it had collected through the methods the lawsuit challenged. It will also cancel a further $14 million in fines it had not yet collected. The city will hire a third-party administrator to contact the 20,090 individuals eligible for a refund.

During the Tuesday night city council meeting, Cedar Rapids Finance Director Casey Drew recommended the council agree to settlement, “To avoid time and expense of all parties involved.”

The city does not admit any wrongdoing as part of the settlement agreement.

The city’s traffic camera program is managed by Gatso USA, the Massachusetts-based company that installed and operates the cameras. Gatso receives 40 percent of the fines generated by the cameras, as well as other fees. Gatso, however, will not be have to refund any of the money it received through the challenged practices. The city alone is responsible for paying the $3 million in refunds, according to the settlement agreement.

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