State Supreme Court dumps Wake’s appeal in scrap metal dispute

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  • The state's highest court will not dive into a legal dispute about Wake County's scrap metal contract.
  • A unanimous December 2022 decision from the state Court of Appeals allows losing bidder Wall Recycling to challenge the county's contract decision.
  • The legal dispute depends in part on whether collected scrap metal should be considered county property. if the county owns the scrap metal, Wake would be forced to comply with state laws related to property sales.

The state Supreme Court will not dive into a legal dispute involving Wake County’s scrap metal contract. A lower court order will allow losing bidder Wall Recyling to continue its lawsuit against the county.

Wake filed a petition in March asking the high court to take the case. The county wanted the Supreme Court to overturn the state Court of Appeals’ unanimous December 2022 ruling favoring Wall. The Supreme Court petitions list issued Friday showed that justices denied Wake’s request.

The Wake County Attorney’s Office had argued that the 2022 appellate decision “conflicts with” a 1938 precedent in a case called Plant Food Co. v. City of Charlotte.

“In Plant Food Co., this Court considered a contract structured almost exactly like the one in this appeal,” according to Wake’s petition. “This Court held as a matter of law that a city contract for the removal of waste (sludge), under which the plaintiff would remove the waste and then pay the city for the waste, was a service contract as a matter of law. The facts are almost exactly on point.”

If Wake County’s scrap metal contract is a service contract for removal of waste, as in the Plant Food case, then the contract is not a contract for sale of county-owned property. That would rebut Wall Recycling’s arguments in the current dispute, Wake’s attorneys argued.

The Appeals Court reached a different conclusion in December. “[T]here 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,” wrote Judge Richard Dietz in one of his final decisions for the state’s second-highest court. Dietz now sits on the Supreme Court.

From 2015 to 2019 a company called TT&E Tire and Metal paid Wake County “around $4 million” for scrap metal collected from county government facilities. Wake sought bids in April 2019 for a new contract for scrap metal collection.

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 for the Appeals Court in December.

“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 the Appeals Court asked a trial court 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, according to the Appeals Court opinion.