American Traffic Solutions hand delivered a letter Monday to give the City of Houston until August 1 to decide what to do. The city can either turn on the cameras or pay damages, and both actions carry negative consequences.
ATS claims the election on red light cameras -- Proposition 3 on the November ballot -- was improperly called because the city did not have the legal authority to hold a special election on the issue.
United States District Judge Lynn Hughes ruled against the city and in favor of ATS last Friday.
The judge said the election never should have taken place because it was not actually a charter amendment, but rather an "improper and untimely" referendum.
The city could try to fight the judge's ruling and leave the cameras off. If they choose that option and the ruling is upheld, however, the city could end up owing as much as $20 million to ATS.
Unless ATS hears otherwise from the city, the company is taking steps to turn on the cameras and resume processing red light violations beginning at 12:01am on August 1.
You can read the letter in its entirety here.