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Agenda 10/23/2012 Item #16K3 10/23/2012 Item 16.K.3. EXECUTIVE SUMMARY Recommendation to approve final settlement of the class action lawsuit titled Cinquegrana v. Collier County, et al., involving red light cameras (Collier County Circuit Court Case No. 09-7628-CA). OBJECTIVE: To obtain formal approval of the final settlement of the class action lawsuit relating to the County's red light camera enforcement program. CONSIDERATIONS: On June 14, 2011, under Item 16.K.7, the Board approved a Settlement Agreement with class action plaintiffs and co-defendants American Traffic Solutions, LLC and ATS American Traffic Solutions, Inc. (Case No. 09-7628-CA). A copy of the Executive Summary for the June 2011 agenda item has been included in the backup for this item. As stated in the June 2011 Executive Summary, the County's liability was initially expected to be "no more than $315,961.50." Due to a low class participation rate (less than 5% of those eligible became part of the class) the County's actual payment under the Settlement Agreement is $116,962.51. This amount represents 52% of the total settlement of$224,927.90. The ATS defendants are collectively responsible for 48% of the total settlement amount, or $107,965.39. Each class member who opted into the lawsuit received payment of$16.16. FISCAL IMPACT: The adopted FY2013 budget contains an anticipated settlement appropriation totaling $316,000 which represents 30% of the amount of fines retained by the County prior to July 1, 2010. This money is budgeted within the General Fund Cost Center 110301. Sufficient budget exists to execute the actual settlement which totals $116,962.51. GROWTH MANAGEMENT IMPACT: None. LEGAL CONSIDERATIONS: As noted in the June 2011 Executive Summary, Board approval at this time is a formality to close this matter. This item is legally sufficient for Board action and requires a majority vote for approval. -JW RECOMMENDATION: That the Board formally approve the final settlement, and authorize payment of$116,962.51 from the intersection safety program account. PREPARED BY: Jeff E. Wright, Assistant County Attorney ATTACHMENTS: (1) Order approving Settlement Agreement; (2) June 2011 Executive Summary; (3) spreadsheet of final settlement amounts Packet Page-2133- 10/23/2012 Item 16.K.3. bI141'LU11 item -10A. . EXECUTIVE SUMMARY Recommendation to approve in principle a Settlement Agreement with Bennett Cinquegrana et aL that settles in full the litigation styled: Bennett Cinquegrana,Rita Siegel, on behalf of themselves and all other persons similarly situated v Collier County, American Traffic Solutions,LLC and ATS American Traffic Solutions,Inc., Case No.09-7628-CA,now pending in the Circuit Court for the Twentieth Judicial Circuit in and for Collier County, Florida. OBJECTIVE: That the Board of County Commissioners (Board) approves in principle a Settlement Agreement with Plaintiffs in the red light camera litigation that settles in full the litigation styled: Case Bennett Cinquegrana, Rita Siegel, on behalf of themselves and all other persons similarly situated v. Collier County,American Traffic Solutions, LLC and ATS American Traffic Solutions, Inc. Case No. 09-7628-CA, now pending in the Circuit Court for the Twentieth Judicial Circuit in and for Collier County,Florida. CONSIDERATIONS: On April 22, 2008, Collier County adopted Ordinance 08-22, the Collier County Intersection Safety Ordinance. The Collier County Intersection Safety Ordinance permitted the use of cameras to monitor intersection safety and provide civil infractions for violations of red lights as recorded by cameras. Similar ordinances were enacted throughout Florida, and 21 separate class action suits were initiated, including this suit. These suits all involve the same plaintiffs' counsel and ATS. • Plaintiffs and ATS independently reached a settlement of all of these claims. ATS, as part of its settlement, secured for the co-defendant local governments the ability to settle the cases on the same terms that ATS agreed to. The backup material outlines three separate settlement options available to the County as secured by ATS in their negotiations: A) The County and ATS both make 30% of their respective collected revenues available for settlement claims. Option A results in a settlement cap of$315,961.50 for the County. B) The County makes available 30% of the total revenues collected by the County and ATS as reduced by an ATS contribution of$208,000. This option would likely be preferred by local governments whose red light camera revenues were relatively low, so that the ATS $208,000 credit would represent the bulk of the settlement. Option B results in a potential exposure of$449,494 to the County. C) The County does not settle, proceeds with its defenses of the action and ATS settles with Plaintiffs for$208,000. • The recommended Settlement (Option A) calls for Collier County to make available no more than 30% of the revenue it obtained from paid fines for pre-July 2010 violations ($315,961.50 ) for settlement. (Post-July 2010 violations are specifically authorized by recent State legislation.) If there are fewer claims against the available funds than the 30% threshold, the County will be able to retain a proportionate share of those funds along with ATS. The proposed settlement terms are attached as backup material for this Executive Summary. • However,the Settlement Agreement cannot be executed immediately as the Court must certify a I Packet Page-2134- 10/23/2012 Item 16.K.3. 6/1412 011 item 16.K.1. class of Plaintiffs and their claims must be paid prior to a Final Settlement Agreement being finalized. The Director of Transportation approves this settlement. FISCAL IMPACT: Because of this pending Iitigation,the County has maintained the proceeds from red light camera revenues in an escrow account. There currently exists $1,053,205.00 in this escrow fund, representing the amount of fines retained by Collier County prior to July 1, 2010. 30% of this amount, or$315,961.50, shall be made available to settle the instant litigation. Upon completion of the Settlement,the remaining 70% of the escrow, or$737,243.50,would be freed to use as County funds. It is not unlikely that a relatively small number of individuals will elect to opt out of the class action and pursue separate legal action against the County,however, the County Attorney believes the exposure to the County for such claims is minimal, as each individual's claim would be limited to the cost of the tickets received. GROWTH MANAGEMENT IMPACT: None. LEGAL CONSIDERATIONS: The County Attorney has reviewed the attached Settlement Agreement and this item is legally sufficient for Board action. It should be noted that if the County does not settle,the claim against the County will be for$1,932,000, which represents the sum of all red light camera tickets issued in Collier County ($2,140,700), less $208,000 that ATS would be paying, with additional costs incurred to defend the litigation. If settled,the cost to the County would be no more than$315,961.50(which will come from the escrowed account). Please note that this matter is being placed on the consent agenda. If any Commissioner wishes to discuss the terms of this Settlement with their fellow Commissioners, please notify me and I will request a continuance of this item and announce a Shade Session to be held at the next Board meeting. RECOMMENDATION: That the Board of County Commissioners approves in principle a Settlement Agreement with Bennett Cinquegrana, Rita Siegel and similarly situated persons to settle in full the litigation styled: Bennett Cinquegrana, Rita Siegel, on behalf of themselves and all other persons similarly situated v. Collier County, American Traffic Solutions, LLC and ATS American Traffic Solutions, Inc. Case No. 09-7628-CA. Please note that this is a preliminary step. with the final Settlement Agreement to be coming back to the Board for review and approval. Since by then payments will have already been made to those who opt into the class, which would include Collier County's share, Board approval at that time will be little more than a formality to close the matter. PREPARED BY: Jeffrey A.Klatzkow,County Attorney F Packet Page-2135- 10/23/2012 Item 16.K.3. COLLIER COUNTY Board of County Commissioners Item Number: 16.K.3. Item Summary: Recommendation to approve final settlement of the class action lawsuit titled Cinquegrana v. Collier County, et al., involving red light cameras (Collier County Circuit Court Case No. 09-7628-CA). Meeting Date: 10/23/2012 Prepared By Name:NeetVirginia Title: Legal Assistant/Paralegal,County Attorney 10/10/2012 4:46:34 PM Submitted by Title: Assistant County Attorney,County Attorney Ask Name: WrightJeff 10/10/2012 4:46:36 PM Approved By Name: WrightJeff Title: Assistant County Attorney,County Attorney Date: 10/10/2012 4:56:04 PM Name: KlatzkowJeff Title: County Attorney Date: 10/12/2012 10:00:53 AM Name: FinnEd Title: Senior Budget Analyst, OMB Date: 10/12/2012 5:23:21 PM Name: StanleyTherese Title: Management/Budget Analyst, Senior,Office of Management&Budget Date: 10/14/2012 6:39:33 PM oak Packet Page-2136- 10/23/2012 Item 16.K.3. Name: IsacksonMark Title: Director-Corp Financial and Mgmt Svs,CMO Date: 10/15/2012 11:58:49 AM Packet Page-2137- 10/23/2012 Item 16.K.3. *j IN THE CIRCUIT COURT OF THE TWENTIETH JUDICIAL CIRCUIT, IN AND FOR COLLIER COUNTY, FLORIDA BENNETT CINQUEGRANA, RITA C. SIEGEL on behalf of themselves and all other persons similarly situated, Plaintiffs, v. Case No. 09-7628-CA COLLIER COUNTY, AMERICAN TRAFFIC SOLUTIONS, LLC, and ATS AMERICAN TRAFFIC INSTR 4738198 OR 4834 PG 1761 SOLUTIONS, INC., RECORDED 9/10/2012 4:16 PM PAGES 9 DWIGHT E. BROCK, CLERK OF THE CIRCUIT COURT Defendants. COLLIER COUNTY FLORIDA REC$78.00 INDX$1.00 ORDER AND FINAL JUDGMENT CERTIFYING CLASS,APPROVING SETTLEMENT AGREEMENT,AWARDING LEAD COUNSEL FEES AND COSTS This cause came before the Court on Lead Plaintiffs' Motion for Settlement Class Certification and Final Approval of the Stipulation and Agreement of Settlement filed in this Litigation (the "Stipulation"). All defined terms and definitions used in the Stipulation are incorporated by reference into this Order and Final Judgment and shall have the same meanings herein, unless otherwise noted. The Court conducted a fairness hearing on September 6, 2012. Procedural Background Lead Plaintiffs filed the above-captioned litigation against the County and ATS. In their Class Action Second Amended Complaint for Civil Damages and Declaratory Relief (the "Complaint"), which is the operative complaint in the Litigation, Lead Plaintiffs assert the following claims against the County and ATS: Count I for Unjust Enrichment, Count II for Tort Filed art te: Clerk of ou, er Packet Page-2138- R•� 10/23/2012 Item 16.K.3. of Conversion, and Count III for Declaratory Relief. The Complaint also states that the putative class is "all who have been cited and paid fines to the Defendants prior to July 1, 2010 for violations of the ordinance." (Compl. ¶33). Lead Plaintiffs allege in the Complaint that the Ordinance is invalid under Chapters 316 and 318 of the Florida Statutes and Article V and Article VIII, Section 2(b), of the Florida Constitution and incorporates these allegations by reference into each Count of the Complaint. In particular, Lead Plaintiffs allege that the Ordinance is invalid because (1) Chapters 316 and 318 of the Florida Statutes preempt all regulation and enforcement of red light violations to the State of Florida and (2) the Ordinance violates provisions relating to the establishment of a court system in Article V of the Florida Constitution. ATS and the County filed motions to dismiss the Complaint, and those motions are currently pending before the Court. The Parties entered into the Stipulation to resolve this matter on a classwide basis in October, 2011. Lead Plaintiffs filed a Motion for Preliminary Approval of Stipulation. The Court granted that Motion on February 28, 2012, and conditionally certified the Class solely for the purposes of Settlement. Pursuant to the Stipulation and the Court's Preliminary Approval Order, a class list was compiled from a review of records maintained by the County and ATS. Following that review, a total of 28,672 Class Members were identified. Class Members were thereafter provided with notice and an opportunity to object to the Settlement or opt-out of the Class. Settlement Class Members' Claims The Class Administrator was able to directly mail the notice to all 28,672 Class Members, with 1,936 notices being returned as undeliverable. Of these 1,936 notices,the Claims 2 Packet Page-2139- 10/23/2012 Item 16.K.3. • Administratir was able to update the address for 1,346 notices and and re-mail them to new addresses. 1,190 Class Members have elected to submit Claims Forms, 48 individuals have requested to be excluded from the Settlement, and no Class Members have objected to the Settlement. The payment to be made to each Class Member that submitted a Claim Form is $16.16. The Court hereby orders the Claims Administrator to pay this amount to the 1,190 Class Members in accordance with the terms of the Stipulation and Plan of Allocation. The Stipulation is Fair,Adequate and Reasonable Florida Rule of Civil Procedure 1.220(e) requires judicial approval of any class action settlement. "Because Florida's class action rule is based on Federal Rule of Civil Procedure 23, Florida courts may generally look to federal cases as persuasive authority in their interpretation of[Fla. R. Civ. P.) 1.220." See InPhyNet Contracting Services, Inc. v. Soria, 33 So. 3d 766, 771 (Fla. 4th DCA 2010). To approve a class action settlement, the Court must evaluate whether the settlement "is fair, adequate and reasonable and is not the product of collusion between the parties." Bennett v. Behring Corp., 737 F.2d 982, 986 (11th Cir. 1984) (citing Cotton v. Hinton, 559 F.2d 1326, 1330 (5th Cir. 1977)); Canupp v. Sheldon, 2009 WL 4042928, *3 (M.D. Fla. November 23, 2009). The Court finds that the Stipulation is fair, adequate and reasonable. To evaluate whether the Stipulation is fair and reasonable, the Court applied the factors set forth in Bennett. These factors are as follows: (1) the likelihood of success at trial; (2) the range of possible recovery; (3) the point on or below the range of possible recovery at which a settlement is fair, adequate and reasonable; (4)the complexity, expense and duration of litigation; (5) the substance and amount of opposition to the settlement; and 3 Packet Page -2140- 10/23/2012 Item 16.K.3. (6)the stage of proceedings at which the settlement was achieved. Bennett, 737 F.2d at 986. In addition, the Court is to consider the general policy that "[p]articularly in class action suits, there is an overriding public interest in favor of settlement." Cotton, 559 F.2d at 1331. Likelihood of success at trial compared to the Stipulation. There would be substantial risks and uncertainties for all Parties if the case were to go to trial. The County and ATS would have vigorously defended the action, and the Class Members faced the risk of not prevailing at all with regard to the merits. Lengthy and costly appeals were also likely. In contrast, under the Stipulation,the Class Members will be eligible for a cash reimbursement. Range of possible recovery. Each individual who received a Notice of Violation issued by or on behalf of the County pursuant to the Ordinance alleging a violation of the Ordinance that occurred on or before June 30, 2010 and who paid the fee or fine imposed is thereby eligible for a cash reimbursement of$16.16, compared to Lead Plaintiffs' requested recovery of$65.00 per fine paid. Point on or below the range of possible recovery at which a settlement is fair, adequate and reasonable. The Court finds that the potential of a $16.16 cash reimbursement is fair in consideration of the complexity, expense, and duration of the litigation. The Court is also "entitled to rely upon the judgment of experienced counsel for the parties" and "should be hesitant to substitute its own judgment for that of counsel." Cotton, 559 F.2d at 1330. The judgment of experienced counsel for the Parties is that the Stipulation should be approved. The opinions of counsel support the Court's finding that the Stipulation is fair and reasonable. Complexity, expense and duration of litigation. The litigation in this case was complex and hard-fought, including extensive dispositive motion practice. The Parties were 4 Packet Page-2141- 10/23/2012 Item 16.K.3. determined to vigorously defend their positions and but for the Settlement would have continued the costly litigation, including trial, and lengthy appeals. For all Parties concerned, settlement is a desirable alternative. Substance and amount of opposition to the settlement. The Court preliminarily approved the Stipulation on February 28, 2012, and no intervening events have occurred that would cause the Court to reconsider that preliminary approval. The Court held a hearing to entertain objections on September 6, 2012. There were no objectors. Forty-eight Class Members elected to opt out of the Settlement. Stage of proceeding at which the settlement was achieved. The proceedings to date provide an adequate basis for an informed settlement. By approving the Stipulation, the Parties and the Court will be spared the massive amount of work yet to be done to resolve the litigation —including voluminous discovery, extensive research into complex legal issues, and determining the merits of the dispute. Other factors. The settlement is the result of lengthy, hard-fought, adversarial, arms- length negotiations. The Parties settled only after engaging in comprehensive litigation, which was vigorously contested, as well as engaging in extensive settlement negotiations with the assistance of a well-respected mediator with extensive experience in class action settlements. The Court finds that the settlement was negotiated without collusion and is not the product of collusion. Further, the Court finds that during the course of the Litigation the Settling Parties and their respective counsel at all times complied with the requirements of Florida law. The Notice Procedures Exceeded the Requirements of Due Process and Rule 1.220 Rule 1.220(d)(2) requires that"notice shall be given to each member of the class who can be identified and located through reasonable effort and shall be given to the other members of the 5 Packet Page -2142- 10/23/2012 Item 16.K.3. class in the manner determined by the court to be most practicable under the circumstances." "In class action litigation, due process requires that the absent class members be afforded notice of the suit, an opportunity to be heard and participate in the litigation, and, in actions for damages, a chance to opt out of the litigation." Nelson v. Wakulla C'ty, 985 So. 2d 564, 576 (Fla. 1st DCA 2008). The Court finds that the forms of Notice that the Court preliminarily approved and the Class Administrator sent out and made readily available were fair. The Postcard Notice was sent to the Class Members' last known addresses, and the Long Form Notice was available online and per request by writing or calling toll free the Claims Administrator. Both forms of Notice described the nature of the litigation and the class in simple-to-understand language. The Long Form Notice also provided information regarding the Class Member's ability to opt out of the Settlement. The notice procedures implemented in this case more than adequately satisfy Rule 1.220 and due process standards. As further evidence of the fairness of the Stipulation, out of the 28,672 Class Members identified, only 48 Class Members chose to opt out of the Stipulation and there were no objections to the Stipulation. Settlement Class Certification The Court concludes that the requirements of Rule 1.220 have been satisfied for the reasons set forth in the Preliminary Approval Order,which the Court adopts by reference. Lead Counsel's Fees and Costs The Court conducted a fee and costs hearing on September 6, 2012, and the Court awarded Lead Counsel $199,731.90 in fees and $-5,.W2A2 in costs to be paid if and only if the t(. VC' 6 Packet Page -2143- 10/23/2012 Item 16.K.3. Court determined at the fairness hearing that the Settlement is fair, adequate and reasonable and is not the product of unfair collusion between the Parties. Class Representative Fee The Stipulation has a provision for a class representative fee for the time and effort of the Lead Plaintiffs in this case. The Court approves payment of the class representative fee to the Lead Plaintiffs. Conclusion A careful and thorough analysis reveals that all relevant factors strongly favor approval of the Stipulation that was the product of arms' length negotiations of the Parties. Class Members received the best practicable notice of the Stipulation. Accordingly,the Court finds the Settlement is a fair, adequate and reasonable settlement of this matter. The Court also finds that the implementation of the terms of the Stipulation — including, but not limited to, the terms concerning the appointment of Lead Plaintiffs and Lead Counsel, Notice, requests for exclusion from the class, and objections to the Settlement — satisfy the due process rights of all absent Class Members, including those who reside outside the forum. Pursuant to the terms of the Parties' Stipulation, the names and addresses of the Class Members and other confidential personal and business information used or disclosed in the course of this settlement or class administration shall remain confidential. Accordingly, it is ORDERED and ADJUDGED as follows: 1) Pursuant to Rule 1.220 of the Florida Rules of Civil Procedure, the Court finally certifies, solely for purposes of the Settlement, a class consisting of all Persons who received a Notice of Violation issued by or on behalf of the County pursuant to the Ordinance alleging a violation of the Ordinance that occurred on or before 7 Packet Page -2144- 10/23/2012 Item 16.K.3. June 30, 2010 and who paid the fee or fine imposed thereby. Excluded from the Class are (a) the Settling Defendants and their officers, directors, elected officials, and appointed officials and (b) any and all Persons who timely and validly requested exclusion from the Class. 2) The Stipulation and Settlement are APPROVED as fair, reasonable, and adequate to the members of the Class. 3) The Plan of Allocation described in the Stipulation and Long Form Notice is APPROVED as fair, reasonable, and adequate to the members of the Class, and the Claims Administrator is DIRECTED to administer the Settlement accordingly. 4) Lead Plaintiffs and all Class Members shall be bound by the Settlement and the Stipulation and Exhibits thereto. 5) The Litigation and all Claims asserted therein are DISMISSED on the merits and WITH PREJUDICE. 6) Lead Plaintiffs and all members of the Class are BARRED and PERMANENTLY ENJOINED from instituting or prosecuting any Released Claims against any Settling Defendant or Released Person. 7) The Settling Defendants are BARRED and PERMANENTLY ENJOINED from instituting or prosecuting against Lead Plaintiffs, the Class Members, Lead Counsel, and each other any claims arising out of, relating to, or in connection with the institution, prosecution, defense, assertion, settlement, or resolution of the Litigation; provided, however., that ATS shall not be deemed to have released 8 Packet Page -2145- 10/23/2012 Item 16.K3. • or to be enjoined from instituting or prosecuting any claim against the County for the recovery of service fees for services provided by ATS to the County. 8) Lead Counsel are awarded fees in the amount of $199,731.90 and costs in the amount of $6 2 to be paid from the Settlement Fund in accord with the I G,$1 Stipulation. 9) Lead Plaintiffs are awarded a class representative fee in the amount of $250.00 each to be paid for the Settlement Fund in accord with the Stipulation. 10)The Court retains jurisdiction, without affecting the finality of this Judgment, over the enforcement and administration of the Stipulation and Settlement. 11)In the event that the Effective Date does not occur in accord with the Stipulation, this Order and Final Judgment shall be rendered null and void to the extent provided by and in accord with the Stipulation, and this Order and Final Judgment shall be vacated. In such event, all orders entered in connection with Stipulation shall be void, and the Class shall be decertified. In such event, this Litigation shall return to its status prior to the execution of the Stipulation. DONE and ORDERED in Chambers, at Naples, Collier County, Florida, this (� day of , wry ,( ,2012. /ATI 41 .1 CYNT A A. PIVACEK CIRCUIT COURT JUDGE Copies furnished to: Counsel of Record 9 Packet Page -2146- 10/23/2012 Item 16.K.3. 0 E I? Q O C z . ci J ++ -0 a)cu C E a 4-. y.. CU N 0 0 0 0 0.0 r-I 0) 0 01000, QC Lf1 ro - t.O O N O N N v1 n m O � 0�0 IN rn rn m Ql lD LO CO 'Cr l0 n 01 Ill- N V} N .�-1 O N iA Vf i/f t/1-t/)1/f O v F. Y E E a \° a ro vC u1 c C _0 p II co 'p pp C i O N E C hII N LL ' -, v "t3 v) C O 'Fa C 3 C -p CU CU 0 0 U d te' d +.. C C .n -p C '- (0 CU U u U> cif U < vi Packet Page -2147-