LOS ANGELES (CN) - Los Angeles deprived millions of harried drivers of the right to contest parking tickets by illegally contracting the collections process to a Xerox subsidiary, a class action claims in Federal Court.
Lead plaintiff Jeff Galfer sued the City of Los Angeles, Xerox State and Local Solutions, and three L.A. Department of Transportation executives, alleging state and federal constitutional violations, conversion, trespass to chattels, civil rights violations, unfair business practices and other charges.
Los Angeles collects more than $150 million in parking fines every year, from the nearly 3 million citations it issues, according to the 47-page complaint.
Budget problems have led Los Angeles to run its parking system "as a profit center for the city, rather than a mechanism for enforcing parking restrictions." The system has "the greatest impact on low-to-moderate income residents who live in densely populated areas with inadequate street parking," according to the complaint.
And, Galfer claims, "The city has also admitted that a significant percentage of those citations are issued in error."
The city outsourced its "review, collection and processing" of parking tickets in March 2006, to ACS State and Local Solutions, nka Xerox State and Local Solutions. Together, the city and its creature "implemented a parking ticket review and collection process in a way that assures that motorists cannot meaningfully contest citations," Galfer says.
The city pays the private contractor $20 million a year, plus up to another $10 million in "contingency fees" depending on how much it rakes in, the class claims.
Galfer claims the city pays a $21 contingency fee for each citation it collects that's older than 79 days.
But the city takes away the contingency fee, which account for half of ACS's revenue, if a citation is thrown out, and hits the company with a $200 penalty if it mishandles a dismissed citation, according to the complaint.
Accordingly, ACS has an incentive to make sure "as many motorists as possible fail to obtain adequate review of their citations," the complaint states.
Parking collections are just one aspect of wide-ranging problems stemming from government handing over its powers to private contractors. Los Angeles in effect, and illegally, allows Xerox and ACS to impersonate government agencies, according to the complaint: "In all written communications with motorists and the public, including notices sent to motorists and on websites maintained by ACS, ACS refers to itself as the Parking Violations Bureau and uses the city's name, seal and other information. In communicating with motorists in person and over the phone, ACS employees and contractors represent themselves as employees of the Los Angeles Parking Violations Bureau, and fail to disclose that they are employees or contractors of ACS," the complaint states.
Galfer claims that ACS fails to "consider the merits" of contested tickets, delays reviews, and sends out identical form letters upholding citations.
From 2009-2012 ACS dismissed just 2 percent of citations on initial review, the complaint states.
The city delegates administrative hearings to ACS, but nearly 40 percent of the hearings are dismissed, according to the complaint. Most motorists never make it that far because of what Galfer calls "coercive conduct."
Motorists are hit with late fees while they hold out for a review, their vehicle registrations are held up at the Department of Motor Vehicles, and the city boots their cars.
"ACS also frequently threatens motorists with these actions unless those motorists give up their rights to review of their citations," the complaint states. Galfer claims that ACS admitted that such tactics helped the city collect more than $6.2 million a year.
"Both the city and ACS are complicit in this misconduct. Although California Vehicle Code ('vehicle code') section 40200.6 makes the city responsible for ACS and requires the city to exercise 'effective oversight' and to implement effective policies governing ACS, the city has failed to do so," the complaint states.
Galfer claims that mayoral candidate and City Controller Wendy Greuel stated in a 2011 audit that the city had "'insufficient policies and poor contract oversight' under the 2006 contract, and 'poor internal policies and citation management.'"
The city "tacitly" rewards ACS and Xerox for their bad behavior because of the millions of dollars they collect, Galfer says.
"Based on the city's and ACS pervasive pattern and practice of depriving motorists of fair, impartial and adequate review, motorists issued citations by the city have been given no mechanism to meaningfully challenge those citations. As a result, millions of motorists every year simply decline to contest citations, rather than risk adverse actions by defendants," the complaint states.
The class seeks declaratory judgment, an injunction, refunds of fees and penalties, return of impounded vehicles, removal of wheel clamps and registration holds, and fair initial reviews and administrative hearings, plus restitution, penalties, punitive damages and costs.
It alleges due process violations, Bane Act violations, violations of 42 U.S.C. § 1983, failure to comply with mandatory duty, unfair business practices, and negligence.
The plaintiffs are represented by Damion Robinson of Van Vleck Turner & Zaller.
Neither Xerox nor the city immediately responded to requests for comment.