Wake appeals scrap metal dispute to NC Supreme Court

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  • Wake County is asking the N.C. Supreme Court to take up a dispute over the county's scrap metal contract.
  • A unanimous N.C. Court of Appeals panel ruled against Wake in December. Appellate judges ruled a losing contract bidder could proceed with a lawsuit against the county.

Wake County hopes the state’s highest court will take up a dispute involving the county’s scrap metal contract. The county wants to see a lawsuit from a losing contract bidder thrown out.

A unanimous N.C. Court of Appeals ruling last December allowed that losing bidder, Wall Recycling, to proceed with its legal fight against the county.

“Wall was an unsuccessful bidder on this services contract based upon evaluation criteria utilized by the County, which included proposed price deduction, provider qualifications and experience, provider equipment, facilities, and approach, provider financial strength and stability, proposal completeness and responsiveness, and references,” according to Wake’s petition Tuesday to the N.C. Supreme Court. “Applying these criteria to Wall’s proposal, as well as to information obtained at a follow-up meeting with Wall’s representatives, the County concluded Wall did not understand the complexity of the County’s metal recycling program or the logistics necessary for its successful operation.”

“As a result of the deficiencies in Wall’s proposal, which are undisputed, Wall’s bid was rejected, and this suit followed,” the petition continued.

A trial judge ruled for Wake County in October 2021, but the Appeals Court reversed course. The Wake County Attorney’s Office argued this week that the 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.

Less than two weeks after the Appeals Court released its decision, Dietz moved up to the state Supreme Court. Dietz almost certainly will recuse himself from the high court’s decision about whether to take up the Wall Recycling lawsuit.

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.