A unanimous three-judge panel of the N.C. Court of Appeals has ruled Greenville’s red-light camera program unconstitutional. The judges agreed the program does not provide enough of its proceeds to local schools.

In a separate case, the same panel rejected an argument that Greenville’s Red Light Camera Enforcement Program violated a constitutional ban on local laws dealing with health issues.

“[W]e hold that the funding framework of the RLCEP violates the Fines and Forfeitures Clause contained in Article IX, Section 7 of our State Constitution,” wrote Judge Jefferson Griffin in the first case, titled Fearrington v. City of Greenville. “We therefore reverse the trial court’s dismissal of Plaintiffs’ claim under Article IX, Section 7 and remand for entry of summary judgment in Plaintiffs’ favor.”

Funding for the program involves an agreement between Greenville and the Pitt County Board of Education. The city collects the money, forwards it to the school system, then invoices the schools monthly for expenses, according to Griffin’s opinion.

“[T]he RLCEP generated $2,495,380.46 in total revenue from 2017 through June 2019,” Griffin wrote. “The School Board paid Greenville $706,986.65 in program expenses during the same period, which included $581,986.65 in fees invoiced by ATS.” Arizona-based American Traffic Solutions manages Greenville’s red-light camera program.

“The School Board received $1,788,393.81 in net revenue during the period, which is 71.66% of the total amount of fines and fees collected by Greenville,” Griffin added.

That arrangement helped lead to the Appeals Courts ruling. “Plaintiffs contend that, because the School Board receives less than the ‘clear proceeds’ of the civil penalties collected by Greenville, the RLCEP violates the Fines and Forfeitures Clause,” Griffin wrote. “We agree, reverse the trial court’s order as to this claim, and remand for entry of summary judgment in Plaintiffs’ favor.”

State law offers guidance about “clear proceeds,” Griffin explained. “[T]he General Assembly has defined ‘clear proceeds’ as ‘the full amount of all penalties, forfeitures, or fines collected under authority conferred by the State, diminished only by the actual costs of collection, not to exceed ten percent (10%) of the amount collected.’”

That means “at a minimum, school boards must receive 90% of the total fines and fees collected” for a program to comply with state law and the state constitution.

The Greenville program included other problematic features, according to the Appeals Court. “Greenville invoices the School Board for the salary and benefits of a law enforcement officer as well as for all fees invoiced to Greenville by ATS,” Griffin wrote. “This Court has previously held that the salary and benefits of law enforcement officers are enforcement costs and are thus not deductible from the clear proceeds.”

ATS also charges Greenville $31.85 for every $100 citation. “Defendants argue that the interlocal agreement does not violate Article IX, Section 7 because Greenville initially pays the School Board 100% of the fines collected under the RLCEP,” Griffin wrote. “Because Greenville collects all of its RLCEP expenses from the School Board after forwarding the fines to the School Board, Defendants argue that the funding agreement is constitutionally adequate.”

“This argument asks us to not only frustrate the clear intent of the people in ratifying Article IX, Section 7, it also contravenes the plain language of the Fines and Forfeitures Clause,” Griffin added.

“The School Board does not receive the ‘clear’ proceeds of fines in any real sense when Greenville forwards the fines to the School Board and subsequently takes 30% of the money back for costs which are not deductible to begin with,” Griffin wrote. “Moreover, the clear purpose of the people in mandating that the clear proceeds of such fines be ‘faithfully appropriated’ to the public schools cannot be circumvented by the elaborate diversion of funds or cleverly drafted contracts.”

“Even if we were to accept Defendants’ argument that the School Board does receive the clear proceeds at least initially, the clear proceeds must then ‘be used exclusively for maintaining free and public schools’ and thus may not be used to reimburse Greenville for its RLCEP expenses to ATS,” Griffin added. “Moreover, by stating that the clear proceeds are to ‘remain in the several counties,’ it is clear that the framers did not intend for $31.85 of every $100.00 paid fine to go to private companies such as ATS, a for-profit corporation located in Arizona.”

If the Greenville red-light program provided at least 90% of its funds to schools, it’s possible that the program would survive judicial scrutiny. Griffin and colleagues Richard Dietz and  Fred Gore rejected other arguments put forward against the program.

They did not find violations of either procedural or substantive due process. They also rejected an argument that Greenville’s program violated a provision of state law requiring municipalities to enforce their own rules, rather than relying on an outside contractor such as ATS.

In a second case, Vaitovas v. City of Greenville, the same panel rejected an argument that Greenville’s red-light program should be thrown out because it’s based on an unconstitutional local law related to health issues.

Only those cities granted permission by the General Assembly can operate red-light camera enforcement programs. Charlotte was the first city to get state permission for red-light cameras in 1997. The General Assembly granted Greenville permission to use red-light cameras in 2000.