SA Recycling lawsuit targets suspicious Arizona UBC collector

SA Recycling, Anaheim, California, has filed a lawsuit against an Arizona recycling firm it says is distorting the market for aluminum used beverage containers (UBCs) by illegally shipping cans collected in Arizona to California.

A report in the Phoenix New Times details the case SARecycling has made against HD Recycling#3.  

“Besides compensation and restitution payments, SA Recycling wants a permanent injunction ‘to prevent HD Recycling from transferring or selling aluminum cans or other recyclable material to California for the purposes of submitting them under California’s program,’” according to the report, citing language in the legal filing.

SA Recycling, which has scrap yards in California and Arizona, filed the legal complaint in the U.S. District Court of Arizona June 1, 2015. The alleged scheme centers on collecting California Redemption Value (CRV) per-can revenue for UBCs generated in Arizona.

A private investigator hired to track how Phoenix-based HD Recycling#3 was handling its UBCs allegedly saw “workers gathered uncrushed cans and periodically load them into a white tractor-trailer with California plates.” The same truck later “engaged in counter-surveillance tactics, such as exiting and re-entering the highway, in an apparent effort to ensure no one was following on the way to the [state] border,” according to the Phoenix New Times report.

In terms of market distortion, the legal filing says HD Recycling#3 was able to pay $1.15 to $1.25 per pound for UBCs at a time when buyers were paying just 60 to 70 cents per pound for them. The suit says only an illegal cross-border CRV scheme could justify the purchase costs.

California state agency CalRecycle periodically cracks down on such schemes and is likely to investigate the allegations detailed in the suit.