Appeals Court ruling could scrap Wake metal recycling contract

December 20, 2022

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  • A unanimous ruling from the N.C. Court of Appeals could reopen Wake County's scrap metal recycling contract process.
  • One issue for a trial judge to resolve is who owns the discarded pots, pans, paint cans, and appliances.

A unanimous N.C. Court of Appeals ruling could force Wake County to revisit its contract for scrap metal collection. Appellate judges agreed Tuesday to revive a lawsuit from a rejected metal collection bidder.

“This case concerns Wake County’s contract for discarded scrap metal from its residents — things such as pots and pans, empty paint cans, and large appliances,” wrote Judge Richard Dietz in one of his final Appeals Court opinions. Dietz joins the N.C. Supreme Court in January.

“Wake County collects these items at county recycling facilities. Private recycling companies will pay substantial sums to retrieve this scrap metal and resell it to smelters and other businesses,” Dietz added.

Wake sought bids in April 2019 for scrap metal collection at county facilities. A company called Wall Recycling submitted the highest bid but lost out on the contract.

A trial judge dismissed Wall Recycling’s lawsuit challenging the decision, but “there are genuine issues of material fact concerning whether the scrap metal is county property, and genuine issues of material fact concerning various aspects of the bidding process,” Dietz wrote.

From 2015 to 2019 a company called TT&E Tire and Metal paid Wake “around $4 million” for scrap metal collected from county government facilities.

TT&E, Wall Recycling, and another company responded to the 2019 proposal. “Wall Recycling offered the county the highest price — nearly $10 per ton more than that offered by TT&E,” Dietz wrote.

“Before 2019, the county had repeatedly ranked price as the most important criterion for awarding the contract,” according to the opinion.

Yet that changed in May 2019, when a committee met to evaluate the competing proposals. “During this meeting, the committee ranked price as the fourth most important criterion,” Dietz wrote. “The committee then gave TT&E a higher score than Wall Recycling in two of the three criteria that it ranked as more important than price.”

Wake entered into a contract with TT&E and extended the contract in April 2020 without a new request for proposals.

“Wall Recycling then filed this action seeking a declaration that, under a series of statutes concerning county contracts, Wake County was required to award the contract to the highest responsible bidder,” Dietz wrote.

“The central issue in this appeal is whether the contract that Wake County awarded to TT&E is subject to statutory provisions that prioritize the highest contract bidder,” according to the opinion.

Among the issues a trial court will have to address is who owns the scrap metal.

“In light of this competing evidence in the record, there are genuine issues of material fact concerning whether the scrap metal is county property,” Dietz wrote. “The record indicates that the residents who deposit items in the recycling containers are doing so because the county advertises to them that the county is providing these locations to turn in recyclable material as a county service to residents. Thus, residents who take their scrap to these locations may intend for title to the property to pass to the county.”

“Even if residents intend solely to abandon the property — that is, relinquish their ownership permanently as they would with other forms of trash — there are fact issues to resolve.”

If the county owns the scrap metal before it’s collected, Wake would need to comply with state laws regarding the sale of its property.

“In sum, we hold that, if the scrap metal is county property, the challenged contract concerns the disposition of that property and therefore must comply with statutory criteria,” Dietz wrote. “Because the ownership of that scrap metal involves disputed questions of fact, and because there also are fact questions concerning the county’s compliance with this statutory criteria, we reverse the entry of summary judgment in favor of the county.”

Judges Chris Dillon and John Arrowood joined Dietz’s opinion. As an unpublished opinion, the ruling has limited value as a precedent.