Cleveland does not have to refund $4.1 million to motorists who paid fines under a now-defunct traffic camera program used to catch red-light and speeding violators, the Supreme Court of Ohio ruled today.

A divided Supreme Court ruled that once drivers paid the fines and did not contest the tickets under the city’s administrative appeal program, they lost the right to seek reimbursement through a class-action lawsuit.

The lawsuit was filed by Janine Lycan and several other motorists who were ticketed at a time when Cleveland’s program applied to the owners of the ticketed vehicles. In a separate ruling in another case, the Eighth District Court of Appeals held that people who leased their vehicles were not covered under the definition of “owner” under the Cleveland ordinance, and were not liable for fines from violations detected by traffic cameras.

When Lycan and other lessees of ticketed vehicles discovered that they were not included in the definition of owners and were not subject to the fine, they filed the class-action lawsuit arguing the city was unjustly enriched by the payments.

In the Court’s lead opinion, Justice Sharon L. Kennedy wrote that the lawsuit was barred by the principle of res judicata.

Drivers’ Claims Resolved Before Lawsuit Filed, Supreme Court Concludes
The lead opinion explained that res judicata includes two concepts, claim preclusion and issue preclusion, and that claim preclusion applied in this case. Citing the Court’s 1990 Natl. Amusements, Inc. v. Springdale decision, the opinion stated that claim preclusion makes “‘an existing final judgment or decree between the parties to litigation … conclusive as to all claims which were or might have been litigated in a first lawsuit.’”

The Court explained that claim preclusion has four elements:
(1) a prior final, valid decision on the merits by a court of competent jurisdiction;
(2) a second action involving the same parties, or their privies, as the first;
(3) a second action raising claims that were or could have been litigated in the first action; and
(4) a second action arising out of the transaction or occurrence that was the subject matter of the previous action.

Noting that the doctrine of res judicata applies to administrative proceedings, Justice Kennedy wrote that because the vehicle lessees had the opportunity to challenge their tickets through the city’s appeals process but instead admitted their guilt by paying the tickets, the vehicle lessees could not revive their dispute by filing a separate lawsuit to contest their fines.

Justices Patrick F. Fischer and R. Patrick DeWine joined Justice Kennedy’s opinion. Justice Melody Stewart concurred in judgment only.

In a dissenting opinion, Chief Justice Maureen O’Connor disagreed that res judicata applied in this case. She wrote that the doctrine of res judicata in this context requires a prior valid decision on the merits from a court of competent jurisdiction. She cited the policy behind the doctrine, that res judicata “is to be applied in a particular situation as fairness and justice require, and that it is not to be applied so rigidly as to defeat the ends of justice or so as to work an injustice.”

The chief justice noted that the law firm that had contested through the administrative appeals process the tickets it received for leased vehicles incurred additional penalties for non-payment, even as it pursued an appeal to the Eighth District Court of Appeals. The firm also received a “credit rating warning” letter stating its delinquent payments would be reported to a national credit bureau.

Chief Justice O’Connor wrote that the appellee motorists here were presented with a Catch-22, and subjecting owners of leased vehicles to an expensive and lengthy legal process while facing increased penalties and negative hits to their credit scores did not represent a “fair adversary proceeding” to which res judicata would attach. Because the fines were paid, a court never considered the drivers’ legal arguments, and they should be able to contest the payments, she concluded.

Justices Michael P. Donnelly and Jennifer Brunner joined Chief Justice O’Connor’s opinion.

Supreme Court Considered Dispute in 2016
The Court last ruled in the case in 2016 when it found it did not have the authority to consider Cleveland’s claim that the lawsuit was barred until the trial court issued a final order on whether the drivers had to first use the administrative appeals process. The case returned to the Court in 2020 after the Cuyahoga County Common Pleas Court and the Eighth District ruled the class-action lawsuit could proceed.

Cleveland’s program ended in 2014 when city residents voted to ban automated photo enforcement of red-light and speeding laws. In today’s decision, the Court noted that state lawmakers ended the rights of cities to conduct administrative hearings on non-criminal traffic violations in 2019. Municipal courts now have exclusive jurisdiction over photo-enforced red-light and speeding violations where such programs exist.

2020-0341. Lycan v. Cleveland, Slip Opinion No. 2022-Ohio-4676.

View oral argument video of this case.

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