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South Chicago, East Side

Judge Throws Out $100M Lawsuit From General Iron’s Owner That Tried To Force City To Give Permit To East Side Metal Scrapper

Southside Recycling's owners sued the city for more than $100 million and the right to open its East Side facility after the feds intervened.

Community members, leaders and activists gathered outside City Hall to call on Mayor Lightfoot to deny the permit to move General Iron to the Southeast Side on the 20th day of the hunger strike on Feb. 23, 2021.
Colin Boyle/Block Club Chicago
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EAST SIDE — A federal judge has tossed out a lawsuit filed by the owners of General Iron, whose efforts to move their operation to the Southeast Side were put on hold after the feds urged city leaders to halt a controversial permit review.

U.S. District Court Judge Robert Dow Jr. dismissed the suit from Reserve Management Group on Tuesday. The suit in federal court claimed the city violated the company’s constitutional rights and sought to force the city to issue the final permit needed to open Southside Recycling at 11600 S. Burley Ave. in East Side.

RMG operated General Iron in Lincoln Park until this year and wants to move essential equipment and most employees to Southside Recycling.

State and city officials controversially approved some of Southside Recycling’s needed permits for RMG over the past year, but the company was awaiting the green light on a city operating permit to officially open Southside Recycling for business.

As that permit review was underway, the U.S. Environmental Protection Agency pushed Mayor Lori Lightfoot to delay issuing the final permit for the company, saying the plans for Southside Recycling “raised significant civil rights concerns” for residents of the area.

Lightfoot postponed the permit process in May, shortly after that letter went public, and pledged to do an environmental review of the area as the EPA had suggested.

Later that month, RMG sued the city for more than $100 million in federal court, claiming city leaders broke their agreement to help the company set up Southside Recycling, which would be its fifth metal scrapping facility at 116th Street and Burley Avenue.

Credit: Colin Boyle/Block Club Chicago
The sun sets over the planned location for Southside Recycling, 11600 S. Burley Ave. on Feb. 22, 2021. Four Reserve Management Group recycling facilities currently operate at the East Side site.

The lawsuit also sought to force the city’s public health department to grant RMG an operating permit, the subject of a fierce organizing effort from activists and neighbors that culminated in a month-long hunger strike earlier this year.

RELATED: After EPA Told Chicago To Halt South Side Metal Scrapper Permit, General Iron’s Owner Sues City For $100 Million

On Tuesday, Dow threw out the suit, writing that because the permit is still under review, the city hasn’t violated RMG’s constitutional rights, as first reported by the Sun-Times.

“Not all delays in approving permits or licenses are futile, and authorities at all levels of government … are entitled to engage in careful consideration of proposed land uses,” Dow said.

Such reviews are allowed “especially” if the subject at hand has “the potential to impinge on matters of public interest, as [Southside Recycling’s] operations plainly do,” the federal judge said.

Other issues raised by RMG should be addressed in state court, the federal judge said.

The company will “immediately seek a prompt ruling” at the state level “based on the city’s broken promises and the fact that we have met every requirement imposed by the city’s own rules,” spokesperson Randall Samborn said in a statement.

“We will continue to fight for our right to service our suppliers and responsibly perform the critical service of metal recycling for the City of Chicago,” Samborn said.

Meanwhile, the city said it was pleased with Dow’s dismissal of the lawsuit, as the decision “acknowledged the appropriateness of the City’s choice to cooperate with the EPA’s request for additional analysis,” Law Department spokesperson Kristen Canbanban said in a statement.

Echoing arguments long made by neighbors and activists, EPA Administrator Michael Regan told Lightfoot in May the concentration of heavy polluting industry on the Southeast Side, the poor environmental conditions resulting from it and decades of lax oversight “epitomize the problem of environmental injustice, resulting from more than a half century of prior actions.”

Regan called on Lightfoot to instead do a “robust analysis of  ambient air quality data from Chicago’s Southeast Side, compared with other parts of the city, but also potential impacts from other pathways of exposure.” Such an investigation would “illustrate the direct link between the environmental burdens in this community and the health of the residents,” Regan wrote.

“We believe it is prudent for the City to delay a decision on the pending permit until such an analysis can be conducted,” Regan wrote. “A thorough, transparent, and properly scoped assessment would provide the public and all parties with assurance that the City is taking serious account of environmental justice concerns in its deliberations.”

RMG sued after Lightfoot agreed to the EPA’s request, saying the company “has jumped through every possible hoop, has supplied every last piece of information, has cooperated through every City delay, and has more than satisfied every permitting requirement,” the lawsuit stated.

Details on the air quality analysis requested by the EPA remain “undefined and the timing undetermined,” Samborn said.

RMG has repeatedly argued that blocking Southside Recycling from opening will cause more scrap metal to be diverted to Sims Metal Management in Pilsen, which is not required to follow the city’s rules for large recycling facilities unveiled last year.

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