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Akron firm wins $1.8M settlement for a class of Ohio scrap metal generators
SHERRY KARABIN
Legal News Reporter
Published: April 7, 2017
The 11 attorneys who work at Akron-based Niekamp, Weisensell, Mutersbaugh & Mastrantonio are not afraid to take on difficult cases.
That’s why when managing partner Chris Niekamp was asked to serve as special collection counsel in a complex case involving a class of plaintiffs who had been unable to recover monies awarded in two judgments he didn’t hesitate to do so.
The firm handles a variety of matters ranging from commercial and civil litigation, bankruptcy and creditors’ rights to estate planning, criminal and corporate law.
“The class had been unable to collect more than $20 million,” said Niekamp. “The case had been going on for years and the attorneys who secured the judgments had not succeeded in bringing the collection phase to a successful close.”
According to court documents, In Re: Scrap Metal Antitrust Litigation dates back to May 3, 2002 when Profile Grinding Inc. filed a putative class action in the U.S. District Court for the Northern District of Ohio on behalf of itself and all others similarly situated against Harry Rock & Associates Inc., Bay Metals Inc., M. Weingold & Co. Inc. and Ferrous Processing & Trading Co., seeking damages for alleged violations of the Sherman Act.
Lincoln Electric was added as a third party plaintiff.
Profile and Lincoln Electric then amended their complaint to include defendants Columbia National Group (CNG) and Columbia Iron and Metal Company (CIMCO).
The plaintiffs argued that the defendants conspired to restrain and eliminate competition in the purchase of unprocessed industrial scrap metal in northeastern Ohio.
On March 31, 2004, the court granted the plaintiffs’ motion for class certification.
The class included all persons or entities with scrap generating facilities in northeast Ohio and the surrounding counties, including Ashtabula, Cuyahoga, Lake, Lorain, Medina, Stark and Summit, who sold ferrous or nonferrous industrial scrap metal to the defendants between December 1992 and March 2000.
On Feb. 9, 2006, a jury ruled in favor of the plaintiffs with respect to their allegations against CIMCO. However, the jury ruled against the plaintiffs with regard to CNG. The following day the court ordered CIMCO to pay $23,036,000.
In September 2006 the plaintiffs were awarded attorneys’ fees and costs from CIMCO totaling over $2.6 million. However, the plaintiffs were only able to recover about $350,000 on the CIMCO judgment before CIMCO suspended its operations.
On Jan. 26, 2010 Lincoln Electric, one of the class agents, filed a separate complaint in the northern district of Ohio against Mercer Company and David P. Miller, alleging claims against Miller for violations of the Sherman Act, piercing the corporate veil and unjust enrichment. The allegations against Mercer were for fraudulent transfer and unjust enrichment. The suit also sought to recover the monies not paid in the CIMCO judgment.
After a series of motions, briefs and judgments on Sept. 26, 2011 the court granted Miller’s motion for judgment regarding the Sherman Act, dismissing the antitrust claim. In September 2013, the court dismissed the case for lack of subject matter jurisdiction. Prior to 2014, the Niekamp firm was not involved in the class action or collection case.
Boies, Schiller & Flexner served as counsel for the class and William Isaacson of Boies was lead counsel. Edmund Searby, a partner at BakerHostetler, also represented the class and served as counsel for the class agent Lincoln Electric.
In June 2014, the class counsel retained the Niekamp firm as special collection counsel, with Niekamp, partner Jack Weisensell and associates Stephen Gross and Jennifer Cundiff (now assistant magistrate in the Summit County Court of Common Pleas) pursuing the collection of the judgments in state court.
On Sept.19, 2014, Niekamp filed an action in the Summit County Court of Common Pleas on behalf of Lincoln Electric and Profile Grinding against Mercer Company and David P. Miller.
The suit charged Miller with fraudulent transfer, piercing the corporate veil, aiding and abetting and unjust enrichment. The claims against Mercer included fraudulent transfer, successor liability and unjust enrichment.
The complaint sought to recover money to satisfy the unsatisfied judgment against CIMCO.
“The brunt of the allegations dealt with the plaintiffs’ claims that intangible ‘relationship’ assets were fraudulently transferred from CIMCO to Mercer and that David Miller essentially controlled both entities at the time of transfer,” said Niekamp.
After a daylong mediation on November 17, 2015, plaintiff Lincoln Electric Company, acting on behalf of the class, reached a settlement with Miller Entities and Mercer.
According to court documents, Mercer, Miller, CIMCO and CNG have denied and continue to deny any wrongdoing whatsoever.
On Aug. 8, 2016 U.S. District Court Judge Christopher A. Boyko approved a $1.8 million settlement benefitting the certified class of Northeast Ohio scrap metal generators.
“We were able to get a good result for the benefit of the entire class,” said Niekamp. “Since then $1.6 million of the judgment has been paid. We are awaiting a few final payments from one of the defendants but we do not anticipate a problem.”
Thompson Hine partners David Hooker and Matt Ridings represented defendants Columbia Iron and Metal Company, Columbia National Group and David Miller in the state action. Roetzel & Andress partner Stephen Funk represented defendant Mercer.
In an email, Funk issued the following statement: “Mercer Co. is a scrap yard based in Sharon, Pennsylvania that had absolutely no involvement in the underlying antitrust suit.
“It strongly denied all liability throughout the subsequent litigation that was filed in both federal and state court to collect upon the judgment entered against Columbia Iron & Metal Company, and believed that Plaintiffs had no valid legal basis for their alleged claims against Mercer.
“After a settlement was reached with David Miller, Mercer agreed to join in the class action settlement in order to put the litigation behind them, cease incurring any further litigation costs, and obtain a full and complete release of all claims and potential claims from all members of the plaintiff class.”
Hooker said the settlement was a product of negotiations “and it was a recognition on the defendants’ part that, after 14 years of litigation, they wanted to get this behind them. We denied liability all throughout the case.
“In my view we had a strong position and plaintiffs would have had difficulty recovering anything, but the prospect of going through a lengthy trial and multiple appeals was something the defendants did not want to do,” said Hooker.