Court case triggers changes at recycling sites outside Sonoma County grocers

Recycling stations outside supermarkets have long served as a popular disposal option for those seeking cash for their used cans and bottles.

But those operations in Sonoma County and elsewhere across the state are set to undergo a new level of scrutiny, including more undercover checkups, as a result of a court settlement concerning allegations of underpayment to consumers for recyclables.

The $285,000 settlement, which was approved last week by a Santa Cruz County judge, involves Contain-A-Way Inc. of Ontario in San Bernardino County. The company operates NexCycle redemption stations, where patrons can receive payment for cans and bottles based on their California Redemption Value, or CRV.

The lawsuit was brought against the company by district attorneys from Sonoma, Santa Cruz, Fresno and Contra Costa counties.

Weights and measurement officials for those counties and for the state found “fairly widespread” underpayments to consumers over a four-year period, said Matthew Cheever, a Sonoma County deputy district attorney.

The issue first arose in Santa Cruz County, and the Sonoma County Weights and Measures Department did undercover “test sales” at all 18 recycling centers that operate in the county. Discrepancies were detected in payments “with the majority of locations,” said Fernando Vasquez, chief deputy sealer for the county.

As part of the settlement, Contain-A-Way agreed to bolster a “secret shopper” program, where the company will send its own undercover staff to test and record whether the recycling facilities are underpaying for cans and bottles, Cheever said. The county will review those records, as well as conduct its own undercover tests.

Officials with Houston-based Strategic Materials Inc., the parent company for Contain-A-Way, did not return calls for comment this week. A receptionist for a related business, rePlanet Inc., said the company would have no comment on the settlement.

The case follows a similar $622,000 settlement in 2011 by Tomra Pacific for underpayment violations at recycling stations around the state. Tomra sold its recycling stations to rePlanet in 2012, Vasquez said.

The county’s 18 recycling locations all now are registered by rePlanet but operated by NexCycle, Vasquez said.

NexCycle and rePlanet list the same business address and suite number in Ontario, according to corporate records filed with the California Secretary of State Office.

During the investigation, county staff conducted more than 50 undercover tests at the redemption centers.

“They did an excellent job of collecting that evidence,” Cheever said.

The $285,000 settlement will be divided among the four counties. Of the amount, Sonoma County Weights and Measures will receive nearly $9,600 for reimbursement costs for its investigation, and the District Attorney’s Office will receive $23,132 from civil penalties that will be used to investigate and enforce consumer protection laws, Cheever said.

As part of the settlement, Contain-A-Way proposed to move to an automated system where the weight amount registered by the scale is electronically transferred to the device that prints out the payment voucher. That technology would eliminate errors and could reduce intentional underpayments, Cheever said.

At the NexCycle center on Mendocino Avenue in Santa Rosa, patron Andy Turner said he approved of the county’s efforts to ensure that people get paid the proper amount for their recycled materials.

“I’m glad they’re keeping track,” said Turner, a Santa Rosa resident. Even so, he called it a “no brainer” that the company could install technology “that takes the human factor out” of the measurement and payment process.

Some recycling patrons limit their redemptions to 50 or fewer items so they will be counted, not weighed, a provision of state law.

But Vasquez said weighing the cans should give a comparable result. He advised consumers beforehand to have a good estimate of the weight of their cans and bottles, to observe the center’s listed redemption rates and to note the scale readout when empty and again with the weighed items in place.

Often, he said, those collecting the cans and bottles are people of modest means.

“They’re the ones who are actually getting hurt” by the underpayments, Vasquez said.

You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.