Under a legal settlement submitted this week, warehouse owners will drop their CRT lawsuit against Samsung, LG and MRM. E-scrap processor Kuusakoski, however, will pay another $1 million.
The agreement, filed in federal court on Oct. 31, marks a significant milestone in the years-long legal battle initiated by the owners of Columbus, Ohio warehouses left full of CRT materials when Closed Loop Refining and Recovery failed in early 2016.
Those warehouse owners, Garrison Southfield Park and Olymbec USA, sued dozens of suppliers that shipped material there, as well as electronics brand owners that contracted with the e-scrap processors.
The latest settlement requires Kuusakoski to pay another $1 million to end the plaintiffs’ allegations against Samsung Electronics America, LG Electronics and Electronic Manufacturers Recycling Management Co. (MRM), an organization that fulfills OEMs’ e-scrap recycling obligations under state recycling laws.
Samsung, LG and MRM have all contracted with Kuusakoski, which was a major supplier of CRTs to Closed Loop. Under the settlement, those OEM entities will not have to pay any money into a cleanup fund and they’ll be dropped from the case. Meanwhile, Kuusakoski has corrected its previous sworn assertion connecting MRM to Closed Loop.
“We are definitely pleased with the outcome,” said Tricia Conroy, executive director of MRM. “We’re pleased to have it behind us and to not be paying.”
If approved by the judge, Kuusakoski’s $1 million payout would come on top of $6 million Kuusakoski has already agreed to pay in the case (legal filings indicate the processor’s insurance has agreed to pay an undisclosed portion of the sum).
According to the landlords, Kuusakoski and an e-scrap company it acquired in 2015, Vintage Tech, together shipped over 49 million pounds to Closed Loop in Ohio, far more than any other supplier. Closed Loop left roughly 151 million pounds in three warehouses in Columbus.
Difficulty attributing pounds to OEMs
A key question in the Samsung, LG and MRM settlement negotiations was how many pounds of CRT materials, if any, were sent to Closed Loop on their behalf.
The settlement language notes the difficulty of parsing through shipping documents to find definitive answers.
“The manner in which the EPR obligations are discharged can make it difficult to ascribe specific weights of E-Waste at the Facility to specific OEMs with any reasonable degree of certainty so as to support application of the same cost recovery formula used for prior settlors,” the settlement document states.
To meet their requirements under state EPR laws, OEMs often contract with third parties to move e-scrap to a facility where devices are disassembled, and then the OEMs often rely on other contractors to ship the residuals, including CRT glass, to other locations for processing.
As a result, the bill of lading for any given load of material shipped to Closed Loop may not identify whether an OEM claimed EPR credit for all or part of that shipment.
Additionally, OEMs “buy” pounds for the purpose of meeting their recycling weight targets. As a result, e-scrap attributable to a specific OEM can be commingled with other e-scrap on the same bill of lading, the document notes.
Kuusakoski recants statement about MRM attribution
In this case, Kuusakoski had previously sworn in written responses during the legal discovery process that CRT materials the processor sent to Closed Loop included weight attributed to MRM. MRM vehemently denied it, and has long insisted it never allowed its CRT glass to travel to Closed Loop.
Lawyers for the landlords disagree with MRM on that point, but the final settlement language references “additional information provided by Defendant MRM and the Kuusakoski Defendants identifying potential discrepancies in the original accounting produced by the Kuusakoski Defendants.”
The settlement also points to “the good faith willingness of the Kuusakoski Defendants to pay the settlement amounts allocated to Settlors, on behalf of Settlors” and the fact that the $1 million from Kuusakoski “will meaningfully advance cleanup efforts.”
In connection with an agreement between the parties, Kuusakoski formally retracted its past claim regarding MRM. That retraction came in the form of a public statement sent to E-Scrap News and a legal document sent to the parties back in March 2021.
In the Oct. 31 public statement to E-Scrap News, Kuusakoski wrote that “Kuusakoski and Vintage Tech sent all materials attributable to MRM to locations other than Closed Loop. Both Kuusakoski and Vintage Tech are specifically unaware of MRM having claimed credit for materials delivered by Kuusakoski or Vintage Tech to Closed Loop. Therefore, Kuusakoski and Vintage Tech revised our discovery responses that previously attributed Closed Loop materials to MRM to state that any initial attribution of MRM material to Closed Loop was inaccurate.”
The corrected legal response that Kuusakoski provided to the parties in the case provides more detail than the public statement. MRM sent E-Scrap News a copy of the March 4, 2021, document, which was not included in the public court filings.
In it, when asked to identify all OEMs that claimed EPR credit for materials delivered to Closed Loop in Columbus, Kuuakoski wrote “to the best of Kuusakoski’s knowledge and understanding, MRM, MPC, LG, Sony, Waste Management WMRA, E-World Recyclers, Microsoft, Haeir, Micro-Center, Premio, Amazon, and Universal Recycling Technologies each may have claimed extended producer responsibility credit for materials handled by Kuusakoski. However, Kuusakoski did deliver some materials to locations other than Closed Loop in the years 2012 through 2016.”
The document goes on to state that, pursuant to its contract with MRM, Vintage Tech sent all materials attributable to MRM specifically to locations other than Closed Loop.
The filing doesn’t explain how the initial error identifying MRM was made. Patrick O’Hara, who took over as CEO of Kuusakoski Recycling US in June 2022, declined to answer a number of questions from E-Scrap News about the settlements.
“We are happy to move ahead after the lengthy process and continue to serve our customers in North America,” O’Hara said.
The settlement document submitted in court also makes a vague reference to an out-of-court, confidential agreement between Kuusakoski, Samsung, LG and MRM. That confidential agreement settles any breach of contract claims by the OEMs against Kuusakoski, and it calls for some of the parties’ legal expenses to be paid.
A spokesperson for LG Electronics declined to comment, and Samsung representatives didn’t respond to a request for comment.
MRM bills of lading were evidence
In an interview with E-Scrap News, Conroy said MRM presented documents demonstrating that its CRT glass was shipped to a variety of other downstream outlets. Kuusakoski has handled initial e-scrap processing on behalf of MRM, she said, but MRM has other contracts in place for the ultimate disposition of CRT glass, and Closed Loop was not one of MRM’s approved vendors.
“We were able to produce bills of lading that showed glass went elsewhere after Kuusakoski did initial processing,” she said.
MRM continues to do business with Kuusakoski, and the producer group continues to monitor the CRT glass downstreams, she said.
If approved by the judge, the settlement would also end a separate lawsuit against Kuusakoski in U.S. District Court for the Southern District of New York.
In that case, which started in December 2020, Samsung claimed a breach of contract by Vintage Tech. Samsung insisted Vintage Tech was required by their contract to defend Samsung in the Garrison/Olymbec lawsuit but wasn’t doing so.
After hearing that a settlement has been reached in the Ohio case, the New York judge dismissed the New York lawsuit on Oct. 19. If the Ohio judge fails to approve the settlement, the parties could reopen the New York case.
The Samsung-LG-MRM settlement is likely to be the last significant one in the Ohio case, which is in U.S. District Court for the Southern District of Ohio and has been ongoing since late 2017. To date, the plaintiffs have reached settlements with 45 defendants who have agreed to pay out a combined $15.84 million, although not all of those settlements have been approved by the judge yet.
In related news, on Nov. 2, the judge approved the $2.4 million settlement for Sony and EWASTE+.
Only two defendants remain: Bob Erie/E-Waste Systems, a long-ago closed California e-scrap company, and Moshe Silagi, who sold a warehouse to Garrison Southfield Park in 2013. The plaintiffs informed the judge in mid-September that they were working on a settlement with Silagi, but it’s unknown whether they’ll pursue the case further with Erie.
More stories about CRTs
- Cal Micro Recycling, others reach CRT cleanup settlements
- Baltimore County improves e-scrap program with Securis
- Lawmakers put another $2M into Wisconsin CRT cleanup