More e-scrap companies are looking to settle in a legal battle over CRT stockpiling by Closed Loop Refining & Recovery. Another firm is mounting an outreach campaign arguing that suppliers who completed due diligence are not liable for cleanup costs.
Three more processors that supplied CRT materials to Closed Loop’s Ohio operation have signed settlement agreements with the landlords of the defunct company’s warehouses, joining 12 companies that settled last month. The settlements stem from lawsuits by the landlords, Garrison Southfield Park and Olymbec USA, against dozens of former Closed Loop suppliers.
Under the terms of the new settlements, E-Lot Electronics Recycling will pay $28,600 for shipping 204,800 pounds to Closed Loop around April 2015; eRevival will pay $82,900 for shipping 593,800 pounds between July 2014 and October 2015; and eWorks Electronic Services will pay $51,700 for moving 370,200 pounds from January 2016 to February 2016. The payments come out to about 14 cents per pound.
The settlements were submitted to the U.S. District Court for the Southern District of Ohio on July 22 but have not yet received court approval.
Once a major downstream outlet for CRT glass, Closed Loop collapsed in 2016, leaving behind hundreds of millions of pounds of glass in Arizona and Ohio. Three former Closed Loop sites in Columbus, Ohio currently hold an estimated 159 million pounds, and cleanup costs are estimated at over $18 million.
All told, with the settlements pending approval, the 15 settling companies will pay a total of about $680,000 covering nearly 4.4 million pounds.
Approval process changes
Although the first dozen companies to settle received court approval in under 48 hours last month, the settlement consideration process changed after a request from a key defendant.
Kuusakoski, named as the largest supplier in the case, on July 19 filed a document in response to the court’s settlement approval. When the court approved settlements with the first dozen defendants, Kuusakoski said, the agreements protected those companies from liability under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).
As such, the settling companies’ removal from the case could “shift remaining liability to nonsettlors” such as Kuusakoski, potentially increasing the financial responsibility the court could place on non-settling companies, Kuusakoski wrote.
Citing previous court cases, Kuusakoski asked the court to give non-settling defendants the opportunity to comment on proposed settlements. In one citation from a previous case, Kuusakoski noted that a court’s failure to fully consider a settlement agreement can result in reversals by an appeals court.
Kuusakoski was joined in its request by fellow non-settling suppliers American Retroworks, Environmental Coordination Services and Recycling (ECSR), Sunnking and the Waste Commission of Scott County, Iowa.
Learn more in person
The ongoing trials and tribulations around CRT glass will receive in-depth analysis at the E-Scrap Conference and Trade Show in late September. A conference session will feature processors and downstream outlets talking about the material, and attendees will have access to CRT experts in networking events and the trade show hall. Head to e-scrapconference.com for more details and to register today. And be sure to book your hotel now for the best rate.
The court agreed with the request. Judge Edmund Sargus, Jr. on July 23 ruled that non-settling companies will be allowed 10 days to object to a proposed settlement, followed by 10 days for settling companies to respond to the objections.
Supplier maintains due diligence was completed
One former supplier is fighting the allegations in the court of public opinion, as well.
American Retroworks on July 23 issued a press release denying that any of the shipments the company sent Closed Loop were “unlawful” and arguing that the landlords should be solely responsible for cleanup costs. The arguments in the press release are similar to the case American Retroworks made in its official response in court.
The release says American Retroworks has formed the “2012-2013 Due Diligence Group” and is inviting other non-settling defendants to make the case that material shipped during 2012 and 2013 “should be exonerated from any apportionment or settlement discussions.” The group is being led by Eric Harris, a former legal counsel for the Institute of Scrap Recycling Industries (ISRI) who now runs Lone Star Consulting.
In April 2012, the release says, recycling firms “relied on Ohio EPA’s ‘green light’ signal that CRT glass shipments to CLRR were legal” and that both the suppliers and Closed Loop were certified to either the R2 or e-Stewards standard.
“This collective due diligence and reasonable care had cleared a path for the entire marketplace,” the release states, arguing that Closed Loop had “every intention” to process the CRT glass it accepted during that period of time.
But as time went on, American Retroworks stopped shipping material to Closed Loop because it became clear the downstream outlet was stockpiling the material, according to the release.
“Our companies observed the letter of the law and refused to participate in this gamble,” said Robin Ingenthron, CEO of American Retroworks, in the release. “We should not be required to pay, again, for [our] lawful shipments in 2012-2013 when we stopped shipping well before the glass was stockpiled.”
Harris added that the landlords bear the responsibility for cleaning up the stockpiles.
“The idea that these landlords were unaware of the growing stockpiles of CRT glass in their own warehouses from 2014-2016 is insulting at best,” Harris said, adding that the landlords had the ability to enter and inspect the Closed Loop premises at any time. He also accused the landlords of leasing “an additional facility in 2014 to help CLRR move enough glass to comply with the speculative accumulation rule.”
Representatives for the landlords could not be reached by E-Scrap News by press time.
More stories about courts/lawsuits
- New Total Reclaim CEO: ‘I believe in the redemption story’
- Michigan processor files for bankruptcy
- Closed Loop stakeholders talk cleanup cost liability