more Rhode Island metal recyclers have joined the Racketeer
Influenced and Corrupt Organizations (Rico) Act lawsuit against
Sims Metal Management Ltd.s New England division,
alleging that the company underpaid them by manipulating scale
weights and labeling nonferrous metals as cheaper material.
class-action lawsuit was filed against North Haven, Conn.-based
SMM New England Corp. by Innercity Recycling Service LLC,
Cranston; K&R Auto Salvage Inc., North Providence; and
Rhode Island Recycled Metals LLC, Providence (
amm.com, Sept. 25).
Charles Scrap Metal
Inc., Providence, and Tiverton Auto Parts Inc., Tiverton, are
now included in the lawsuit filed in U.S. District Court in
Rhode Island. "Each of the named plaintiffs have sold scrap
metal to SMM and had their loads of scrap adjusted to their
detriment and to the benefit of SMM," the amended complaint
Tiverton Auto Parts
said it sold ferrous and nonferrous metal in the form of
automobiles and car parts to SMM between March 2012 and August
2013, while Charles Scrap Metal sold ferrous and nonferrous
metal to SMM between January 2012 and September 2013, according
to the complaint. There were no specific allegations made by
the two companies.
In response, Sims said
it purchased scrap from Tiverton Auto Parts and still purchases
scrap from Charles Scrap Metal but denied allegations of any
Sims has filed a
counterclaim for alleged breach of contract against Rhode
Island Recycled Metals for $40,000 in material that it said it
sent to the company to have toll processed and another $40,000
for advance payment on material. Rhode Island responded in a
court filing that it has fulfilled its obligations.
Sims also has filed a
counterclaim against Innercity Recycling Service alleging it is
in breach of a supply agreement by taking on an additional
owner and refusing to sell to Sims on an exclusive basis.
Innercity told the court that it believed the contract was void
because SMM had breached the terms of the agreement.