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HOT lanes operator reaches deal in tolling lawsuit that alleged predatory practices

E-ZPass detectors and cameras record the passage of vehicles in the Virginia HOT lanes. (Robert Thomson/The Washington Post)

[This post has been updated.]

A tentative settlement was reached Monday in a federal lawsuit that alleged the operators of Northern Virginia’s high-occupancy toll lanes routinely failed to notify drivers in a timely manner that they had missed tolls and were accumulating huge fees and fines — sometimes amounting to thousands of dollars.

The agreement in the class-action lawsuit filed last April in federal court in Alexandria proposes to increase protections for motorists and give them more time to clear missed tolls from their accounts before they are sent to collection; some customers also will be eligible for refunds. Transurban, the company that manages the lanes, and several law firms representing the plaintiffs filed the proposed settlement with the court on Monday, but it must be reviewed by a judge.

Electronic tolling systems such as those used in the Virginia HOT lanes are becoming more common in the D.C. region and across the nation. The tolls are collected by an electronic interaction between a driver’s E-ZPass transponder and monitoring equipment mounted in gantries along the highways. The electronic transaction may fail for several reasons. For example, the transponder may be incorrectly mounted, or there may not be enough money loaded on the user’s E-ZPass account to cover the toll. Meanwhile, video equipment in the gantry has recorded an image of the vehicle’s license plate, creating a bill for the registered owner of the vehicle.

The toll gantries give no feedback to the driver — that is no green light or “E-ZPass Paid” sign as in a toll plaza — so drivers may not be aware that they have not paid the toll.

In a relatively small number of cases, the electronic transaction fails and the toll road operator is unable to contact the registered owner in a timely manner, or the owner fails to pay the bill. Then the fees and fines begin to accumulate — from an initial administrative fee of $12.50 in case of the Virginia HOT lanes.

Class-action suit claims predatory toll scheme on 495 Express Lanes

According to the lawsuit, plaintiff Jo-Ann Brown was initially assessed $4.15 for missing five tolls on the Capital Beltway’s 495 Express Lanes, but didn’t receive a violation notice until 60 days later. She tried to pay the tolls and a $100 fee, but was rejected by Transurban, the lawsuit says. She wound up being assessed $3,413.75 for unpaid tolls, fees and fines, according to the suit.

After publicity about such cases, Transurban announced in fall 2014 that it would launch a First-Time Forgiveness program for people who failed to pay tolls and cap the fees and penalties at $2,200.

“As part of the settlement agreement, we are adding a number of enhancements to help our customers avoid escalated fees and penalties while maintaining a strong deterrent for egregious violators,” Transurban spokesman Michael McGurk said Monday.

“While we are confident that our enforcement policy is in accordance with Virginia law and that we would have ultimately prevailed in court, the settlement prevents further expensive legal costs and ends any uncertainty,” McGurk said.

HOT lanes users will be able to sign up for missed toll email alerts. Virginia E-ZPass customers will have up to 10 days, rather than the current five, to replenish their accounts to cover a toll missed because of insufficient funds before facing any additional fees. Under the agreement, Transurban also will usually wait at least 90 days, rather than the current 60, before sending outstanding violations to debt collectors.

Additionally, E-ZPass customers who paid from $100 to $300 in administrative fees or civil penalties after their unpaid tolls went to debt collection or court may be entitled to a $10 refund. E-ZPass customers who paid more than $300 in administrative fees or civil penalties could be entitled to a refund of 70 percent of the amount paid in excess of $300.

To be eligible for this refund, travelers would need to show they had an active E-ZPass account at the time of the missed tolls. Transurban said that E-ZPass customers eligible for such a refund will receive a notice in the mail later this year.

James J. Pizzirusso, a lead attorney on the lawsuit for the Hausfeld law firm, said he was “absolutely satisified” with the proposed settlement on behalf of the plaintiffs and all HOT lanes users.

He noted that the refund formula will be supported by funds from Transurban totaling $1.35 million and that the modifications in the toll notification system and the processing of fees and fines will help future toll road users.

Transurban officials said that fewer than 0.24 percent of HOT lanes customers reach the courts after tolls have gone unpaid for at least six months. The First-Time Forgiveness program has been used by more than 35,000 express lanes customers, Transurban said. As part of the settlement, Transurban would continue the forgiveness program for at least five years.

The draft settlement is one of two developments that could affect toll payers in Virginia. Transportation Secretary Aubrey Layne noted that the proposed settlement comes just after the General Assembly, with the support of Gov. Terry McAuliffe’s administration passed legislation that will put in place “reasonable penalties for toll violations, capping civil penalties and administrative fees for first-time toll offenders taken to court at $2,200.”

Pizzirusso said the legislation, known as House Bill 1069, was not a factor in the settlement. He said he doesn’t believe its language presents any challenges to the agreement in the lawsuit, “but instead supports the reasonableness of the settlement.”

The bill awaits the governor’s signature.