Thursday, January 26, 2012

Fifth Circuit Reverses District Court’s Denial of Motion to Intervene in Case Involving Red Light Camera System

In City of Houston v. American Traffic Solutions, Inc., available here, Houston had passed an ordinance approving the use of red light cameras, and contracted with ATS to run the system, thus generating millions in fees for both of them.  Francis and Randall Kubosh then organized a petition drive, spending over $200,000 of their personal funds, to force Houston to cease using this system. The requisite signatures were obtained, and the issue was placed on the ballot, and the voters repudiated the system (over Houston’s vigorous opposition). Houston then terminated ATS’ contract and sued it in federal court, seeking a declaration of rights between ATS and itself over the contract’s status. ATS counterclaimed, alleging that the election was invalid, ultra vires, and unconstitutional. By mutual agreement of Houston and ATS, the district court ordered that the red light cameras were not to be removed from city intersections during the litigation. 

The Kuboshes moved to intervene as of right under Rule 24(a)(2).  The district court denied the motion, and the Fifth Circuit reversed.  After first holding that denial of intervention of right is a final order for purposes of appeal, the court stated: 

These intervenors are unique because they engineered the drive that led to a city charter amendment over the nearly unanimous, well funded, and longstanding opposition of the Mayor and City Council. They have demonstrated a particular interest in cementing their electoral victory and defending the charter amendment itself. If the amendment is overturned, their money and time will have been spent in vain. Finally, they have raised substantial doubts about the City's motives and conduct in its defense of the litigation with ATS. Without these intervenors’ participation, the City might well be inclined to settle the litigation on terms that preserve the adverse ruling on the charter amendment and thus preserve its flexibility to reinstate red light cameras in the future. This is no matter of simply defending City policy of one sort or another: it involves millions of dollars of revenue to City coffers during a period of considerable economic uncertainty. The district court erred in declaring that the Kuboshes had to prove a “meaningful probability [of inadequate representation] derived from actual facts.” Under the totality of circumstances here, including the haste of the litigation, the City’s pecuniary motives, the extended opposition to the charter amendment, the agreed order to leave the cameras in place, . . .it is sufficient to conclude that the intervenors’ interests “may be” inadequately represented. See Trbovich v. United Mine Workers, 404 U.S. 528.


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