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Weizberg v. City of Des Moines

Supreme Court of Iowa

August 31, 2018

CITY OF DES MOINES, IOWA, Appellant, and GATSO USA, INC., Appellee.

          Appeal from the Iowa District Court for Polk County, Lawrence P. McLellan, Judge.

         Defendant city appeals district court's grant of plaintiffs' motion for summary judgment, and plaintiffs cross-appeal grant of defendant city's motion to dismiss, defendant company's motion for summary judgment, and the district court's class certification.

          Michelle Mackel-Wiederanders, Assistant City Attorney, Des Moines, for appellant.

          James C. Larew of Larew Law Office, Iowa City, for appellees Reuven Weizberg, David Peter Veng-Pedersen, and Jacob Patrick Dagel.

          Paul D. Burns and Laura M. Hyer of Bradley & Riley, PC, Iowa City, for appellee Gatso USA, Inc.

          APPEL, JUSTICE.

         In this companion case to Behm v. City of Cedar Rapids, N.W.2d (Iowa 2018), and Leaf v. City of Cedar Rapids, N.W.2d (Iowa 2018), decided today, we consider challenges to an automated traffic enforcement (ATE) program implemented by the City of Des Moines (the City) and its private contractor, Gatso USA, Inc. (Gatso).

         The plaintiffs challenged the Des Moines ATE program on a number of grounds. The plaintiffs claimed that the ATE program violated equal protection, due process, and privileges and immunities clauses of the Iowa Constitution. The plaintiffs further argued that the ATE system was invalid because of preemption by state and local law and unlawful delegation of governmental duties. Because of the legal defects in the ATE system, the plaintiffs asserted the defendants were unjustly enriched. The plaintiffs sought class-action certification. The plaintiffs asked for declaratory and injunctive relief as well as damages.

         On the City's motion to dismiss, the district court dismissed the plaintiffs' claims based upon preemption; unlawful delegation of governmental powers; equal protection, substantive due process, privileges and immunities under the Iowa Constitution; and unjust enrichment. The court refused to grant the motion to dismiss the plaintiffs' procedural due process claim. The court at the same time granted Gatso's motion for summary judgment on all of the plaintiffs' claims.

         Later, the district court considered the remaining procedural due process claim in the case on cross-motions for summary judgment. The court ruled that the City's ATE system as implemented violated procedural due process. The court also resurrected the previously dismissed unjust enrichment claim and ruled the City was unjustly enriched. The court certified a class of vehicle owners who were cited for violating the ATE ordinance, pursued an administrative challenge, but did not request the City file a municipal infraction proceeding in district court.

         The City appealed and the plaintiffs cross-appealed.

         For the reasons stated below, on the City's appeal, we reverse the district court's determination that the ATE system as implemented by the City violated procedural due process.

         On the plaintiffs' cross-appeal, we affirm the district court's grant of the motion to dismiss on grounds of preemption. We also affirm the district court's grant of summary judgment to Gatso on the plaintiff's unjust enrichment claims.

         We reverse, however, the district court's dismissal of the plaintiffs' equal protection, substantive due process, and privileges and immunities claims. We reverse the district court's holding that there is no action for damages under the Iowa Constitution.

         In light of our rulings, we vacate the district court's order on unjust enrichment against the City and the district court's order on class certification.

         We remand the case for further proceedings consistent with this opinion.

         I. Factual and Procedural Summary.

         A. The ATE Ordinance.

         In 2011, the City enacted an ATE ordinance (the ordinance). Des Moines, Iowa, Mun. Code § 114-243 (2015). The ordinance generally recites the power of municipalities to implement ATE systems and to hire private contractors to implement them. Id. § 114-243(a). The ordinance provides that although the private contractor will provide video images to the police department for review, the police department will determine which vehicle owners are in violation of the City's traffic control ordinances and therefore who will receive a notice of violation for the offense. Id.

         Pursuant to the ordinance, the City entered into a contract with Gatso. Under the contract, Gatso agreed to install, operate, and maintain fixed speed systems in accordance with standard installation practices at locations the City desired. Gatso agreed to perform maintenance of the ATE system, including testing the camera settings and operation. The contract further provided that Gatso prepare violation packages and forward them to the police department for review. After approval, Gatso agreed to send citations by mail to vehicle owners and agreed to establish a toll-free help desk telephone number for vehicle owners to discuss citations and make payments.

         The ordinance establishes civil penalties for speeding violations. Id. § 114-243(c). The vehicle owner is liable for the civil penalty unless the vehicle owner shows that a stolen vehicle report was made on the vehicle encompassing the time period in question. Id. § 114-243(c)(3).

         When a person receives a traffic citation, the ordinance establishes a procedure for disputing the citation by requesting that the City issue a municipal infraction citation and proceed to have the matter determined in district court. Id. § 114-243(d). Specifically, the ordinance provided,

(d) Penalty and appeal.
. . . .
(2) A recipient of an automated traffic citation may dispute the citation by requesting an issuance of a municipal infraction citation by the police department. Such request will result in a required court appearance by the recipient and in the scheduling of a trial before a judge or magistrate at the Polk County Courthouse. The issuance of a municipal infraction citation will cause the imposition of state mandated court costs to be added to the amount of the violation in the event of a guilty finding by the court.
(3) If a recipient of an automated traffic citation does not pay the civil penalty by the stated due date or request a trial before a judge or magistrate, a municipal infraction citation will be issued to the recipient by certified mail from the police department. Said municipal infraction citation will result in a mandatory court appearance by the recipient as well as imposition of state mandated court costs if a finding of guilty is made by the court.

Id. § 114-243(d)(2)-(3).

         B. Iowa Department of Transportation Evaluation and Order.

         The utilization of ATE systems by Iowa municipalities caused the Iowa Department of Transportation (IDOT) to promulgate rules related to their use. Iowa Admin. Code ch. 761-144. Pursuant to the rules, municipalities utilizing ATE systems were required to file reports on each location with the IDOT. Id. r. 761-144.5(1). The IDOT then analyzed the reports to determine whether to approve the ATE systems at the locations. Id. r. 761-144.5(3). Further, municipalities were also required to file annual reports evaluating the effectiveness of the ATE system on improving traffic safety. Id. r. 761-144.7.

         The IDOT's 2015 evaluation of the use of equipment by the City's ATE system at the I-235 location concluded that the City should remove the equipment. According to the evaluation, the location "experiences a low crash rate" while the number of speed citations were "extremely high." The evaluation order noted that under the IDOT's administrative rules, ATE systems "should only be considered in extremely limited situations on interstate roads because they are the safest class of any roadway in the state and they typically carry a significant amount of non-familiar motorists." Id. r. 761-144.4(1)(c).

         The City appealed the evaluation. On appeal, the IDOT held that "the data does not provide convincing evidence that this location is unsafe for motorists and law enforcement conducting routine police work." The City continued the operation of the ATE equipment on I-235 and along with two other cities, filed an action challenging the authority of IDOT to promulgate the rules. In City of Des Moines v. Iowa Department of Transportation, we recently held that the IDOT lacked authority to promulgate its ATE rules. 911 N.W.2d 431, 434 (Iowa 2018).

         C. Plaintiffs Alleged ATE Violations.

         1. Weizberg. Reuven Weizberg is a resident of New York State. Weizberg is a musician who was in Des Moines for a performance. Weizberg received three notices of violation arising from events generated at the ATE system location on I-235 in May 2015.

         The front page of the notices of violation received by Weizberg provided photos of the offending vehicle and license plate along with information regarding the date and time of the alleged violation. The front page declares that the motor vehicle owner is liable for payment of any penalty. The notice of violation declares that

[f]ailure to pay the penalty or contest liability by the due date is an admission of liability and will result in this penalty being forwarded to collections and to the Iowa Income Tax Offset Program or for filing in state district court.

         A due date is provided on the front page. A box is presented outlining options for payment online, by mail, or by phone. There is no mention on the front page of the citation regarding the right to request the filing of a municipal infraction.

         On the back of the notices of violation the heading "TO CONTEST THIS VIOLATION" appears. Under the heading, the first sentence declares, "You have the right to contest this violation at an administrative hearing or by mail." The notices of violation further state, "Before contesting your violation it is recommended that you review the local ordinance, images and the actual recorded video of the infraction to determine if you have a valid defense supporting dismissal of this citation." Then, the following language appears:

Note: If the administrative hearing does not resolve the issue, a civil infraction (lawsuit) may be requested to be filed in state district court and a court hearing date will be scheduled. Additional costs including an $85.00 filing fee, and other court costs will be assessed if you are found liable or you pay the civil penalty before the court hearing date. If you fail to appear for the court hearing, you will be responsible for paying the fine and court costs. If you are found not liable, the fees will be paid by the city. Alternatively, you may request a civil infraction (lawsuit) in lieu of an administrative hearing.

         Beneath the section describing how to contest violations, two boxes appear describing how to obtain an in-person administrative hearing or, in the case of nonresidents, how to contest the violation by mail. Inside the box describing how to obtain an administrative hearing, it again states, "You must request such a hearing prior to the due date specified," and "[f]ailure to appear at this hearing will result in an automatic final determination of liability."

         Weizberg asked for and received administrative hearings by mail. In all cases, he received a document indicating that an administrative hearing had been held and stating, "IT IS ORDERED" that Weizberg was liable for the civil penalty and that a "JUDGMENT TOTAL" of $65 had been imposed. Further, the document declares, "Failure to pay the total amount specified . . . will result in the possible imposition of the Iowa Income Tax Offset Program, collection efforts and legal action."

         The backside of the document provides payment information. In the lower portion of the page is a section entitled "RIGHT OF APPEAL." Here, the document reads, "If you want to appeal the Hearing Officer's decision, within 10 days of the date of this ruling you may request that a civil infraction (lawsuit) be filed against you in Polk County District Court." Further, the document declares, "An $85.00 filing fee and other court costs plus the fine amount will become a judgment against you if the Court finds you liable for the violation."

         On a document entitled "2nd and Final Notice" that Weizberg received for one of the events, some text on the front states,

As you have failed to pay or contest the Notice of Violation previously issued, the fine is now due. Failure to pay the civil fine may subject you to formal collection procedures and to the Iowa Income Tax Offset Program. Failure to appear for court hearings will result in judgment being issued against you and liens registered in Polk or Warren County.

         On the back of the document, other text reads,

Please be advised that you have exhausted all challenge options and this is a debt due and owing to the City of Des Moines. Failure to pay the fine immediately will subject you to formal collection procedures and the Iowa Income Tax Offset Program.

         Despite the reference to "court hearings" on the front, this second notice contains no information about any ability to challenge the fine, whether by administrative process or by municipal infraction.

         Weizberg did not pay. No municipal infraction was filed.

         2. Veng-Pedersen. Waukee resident David Veng-Pedersen received one citation in May of 2015. Like Weizberg, he received a notice of violation, requested an administrative hearing, and was found liable. He did not pay the amount.

         3. Dagel. Jacob Patrick Dagel was not an original plaintiff to this proceeding, but the district court added him as a party when it certified the class in this case. He received a notice of violation in September 2016, requested an administrative hearing, and was found liable. Unlike Weizberg and Veng-Pedersen, he paid the amount.

         D. District Court Proceedings.

         1. Petition. Weizberg and Veng-Pedersen filed their petition in district court on December 11, 2015. The petition named the City and Gatso as defendants.

         In article I, count I of the petition, the plaintiffs sought a declaratory judgment against the City. The plaintiffs asked the court to declare that the ATE program "as implemented" by the City and Gatso violated Iowa Code section 602.6101, which provides for "exclusive, general, and original jurisdiction" in district court of all actions. The plaintiffs further claimed that the ATE program, "through its use of an administrative process," is irreconcilable with and preempted by Iowa Code section 364.22(6), which relates to the procedures for processing municipal infractions, and Iowa Code section 364.22(4), which requires police officers, and not a private entity, issue civil citations.

         Article I, count I further asked the district court to declare that "the ATE program described herein" violated the equal protection clause and the privileges and immunities clause of the Iowa Constitution, article I, section 6, because it infringed upon the fundamental right to travel. Even if a fundamental right to travel was not involved, the plaintiffs claimed there was no rational basis to have the cameras where they were located. Further, the ATE program violated equal protection and privileges and immunities because it treated out-of-state residents differently than in-state residents.

         The petition further sought a declaratory judgment that the ATE program "utilized by" and "as applied" violated equal protection and privileges and immunities through the City's use of a database, Nlets, [1]which excludes certain classes of license plate numbers from the database, therefore effectively immunizing those vehicle owners from ticketing by the system. Further, the plaintiffs sought a declaration that the exclusion of government-owned vehicles from the database violated state law provisions that narrowly limit the circumstances in which government employees are exempt from prosecution under state traffic laws. Additionally, the plaintiffs requested a declaratory judgment that the use of certain technology that makes arbitrary distinctions for vehicles without rear license plates is illegal.

         The petition asked for a declaration that the ATE program utilized by the City "violates the Constitution of Iowa" by violating IDOT's administrative rules and regulations and the corresponding 2015 evaluation ordering the City to remove its equipment.

         The petition prayed for a declaration that the ATE program violated the due process clause of the Iowa Constitution "due to the scheme's many failures." The alleged due process failures included placement of cameras without sufficient advertising to the public, placement of cameras and radar at sites not correlated with significant public safety issues, insufficient actual notice to cited vehicle owners of all applicable defenses, and failure to direct cited vehicle owners to the district court as opposed to administrative proceedings that are neither created or described in the City's ATE ordinance and are convened by untrained hearing officers hired by and allied with the City.

         Finally, the plaintiffs sought a declaration that the ATE program amounted to an unlawful delegation of police power from the City to Gatso, a privately held for-profit corporation.

         In article II, count I of the petition brought against the City and Gatso, the plaintiffs requested class certification.

         In count II, the plaintiffs asserted an action for damages for violations of the Iowa Constitution against both the City and Gatso. With respect to Gatso, the plaintiffs alleged that it "acted under the color of law" in carrying out its responsibilities and perhaps even "help[ed] to orchestrate" the unconstitutional ATE program. The damages sought were the amount of penalties paid, plus interest as allowed by law. Plaintiffs further sought costs and attorney's fees.

         In count III, the plaintiffs alleged that the City and Gatso were unjustly enriched. The plaintiffs claimed that the City and Gatso had collected millions of dollars based upon an unlawful ordinance. In particular, the plaintiffs alleged the scheme was "decisively unconstitutional" since March 17, 2015, when the IDOT determined that there was no legitimate state interest in placing the camera at the I-235 location. Plaintiffs sought to recover fines actually paid, plus interest, costs, and attorney's fees.

         In count IV, the plaintiffs sought a temporary and permanent injunctive order preventing the operation of the ATE program. The plaintiffs again repeated their request for damages.

         2. City's motion to dismiss; Gatso's motion for summary judgment.

         The City quickly filed a motion to dismiss the petition. Gatso also quickly sought dismissal but framed its ...

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