Scrap Metal Yards Accuse Attorneys Of Racketeering

In a 40-page complaint filed late Monday in U.S. District Court, two scrap metal companies in New Orleans and another in Baton Rouge charged that the blizzard of suits filed against them by a group of eight lawyers in Baton Rouge and Houston misrepresents and omits facts in a way that is tantamount to a criminal conspiracy.

The complaint was filed by Southern Scrap Material Co. and Southern Recycling, both of New Orleans, and SSX (Southern Scrap Xpress Recycling) of Baton Rouge.

The lawyers' strategy is to hit the scrap yards on so many legal fronts that the businesses pay up rather than enter into costly litigation opposing the false and baseless accusations, the suit said.

In furthering their assault on the scrap yards, the lawyers have committed wire fraud and mail fraud, the suit said, citing the Racketeer Influenced and Corrupt Organizations Act.

"When the same groups of lawyers sue you for environmental claims, personal injury claims, civil rights claims, workman's compensation claims, and all the lawsuits are meritless, there is something wrong there," said New Orleans attorney Randall Smith, who represents the scrap companies.

"I don't think you have an unlimited right just to sue somebody repeatedly because you want to try to get money from them," Smith said.

He said the cases or regulatory complaints have been dismissed, abandoned or are "just dormant." In one case, he said, a court awarded a $15,000 sanction against the plaintiffs' attorneys.

Smith compared the barrage of lawsuits and complaints, filed against the scrap firms since 1995, to breaking a homeowner's window every week, then coming around and saying, "You want us to stop breaking your windows? Then pay us money."Based on a reporter's recap of the suit against him, Houston attorney John L. Grayson said, "I think it's outrageous that these companies are making these allegations."Grayson's partner Mark Hovenkamp and two members of another Houston law firm, George M. Fleming and Bruce B. Kemp, are named in the suit, along with Baton Rouge lawyers John B. Lambremont Sr., Ken J. Stewart, L. Stephen Rastanis and Frederick A. Stolzle Jr.

Grayson was the only defendant who could be reached for comment.

According to Loyola Law School ethics Professor Dane Ciolino, filing civil RICO lawsuits against attorneys is infrequent.

"It doesn't happen a lot, but it has happened," Ciolino said.

"But lawyers do have a qualified privilege when acting in their capacity as a lawyer for a client when they are filing papers in litigation, so that is going to be something the court will have to take up in that matter," he said of the suit against the scrap companies. Advocate - Baton Rouge