PITTSBURGH Two 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.
The initial 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 said.
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 wrongdoing.
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.