MARCH 2008
TSRA files suit in United States District Court to stop faulty metal theft ordinance
Typical scrap recyclers would need an area the size of two football fields to comply

The Tennessee Scrap Recyclers Association (TSRA) took an extraordinary step by filing suit in a United States District Court to challenge a Memphis ordinance requiring scrap recyclers to “tag and hold” certain purchased scrap materials. The state “tag and hold” law and a newly adopted Memphis ordinance requiring tag and hold are being challenged.

“Despite excellent participation by all industry representatives in the recently completed Special Joint Committee to Study the Theft of Precious Metals, TSRA must take this extraordinary action,” said TSRA board of directors president Dom Marchitto. “Tag and hold doesn’t work in solving the metal theft problem and threatens the viability of the scrap recycling industry in Tennessee.”

“Tag and hold” refers to laws requiring a scrap metal recycling company to keep on hand in separate packages all scrap metals (with certain exceptions) for a period of at least 10 days after acquisition. The state law has been on the books for 40 years but until the last few months, tag and hold has not been enforced. This is because tag and hold laws simply do not accomplish their objective of reducing the theft of metals, and they are extremely disruptive of the environmentally important recycling industry.

A typical scrap metal recycler recycles hundreds of thousands of pounds of scrap metal in a 10-day period, and it would have to set aside an area the size of two football fields to comply with tag and hold.

The scrap metal recycling industry operates almost exclusively in interstate and international commerce, with nearly all scrap metal purchased in Tennessee being shipped out of state just as soon as it can be assembled, sorted, and packed in “bales” for shipment.

“The reason why tag and hold doesn’t work is that one piece of metal is just like another,” said Marchitto. “For example, when someone reports that a given type of metal, such as copper, has been stolen, it is impossible to prove that a particular piece of copper that was tagged and held at the scrap recycling yard was the stolen metal.”

A Legislative Study Committee, after a thorough inquiry under a charge from the state legislature, has recommended that the tag and hold provisions of state law be repealed. The Committee was unable to discover any cases in which tag and hold led to successful prosecution of a scrap metal thief.

Despite this decades long practice of non-enforcement, and despite the recommendation of the Legislative Committee, in December 2007 the City of Memphis adopted a new tag and hold ordinance. Under the Memphis ordinance, scrap metal dealers are required to obtain a permit from the City of Memphis in order to continue in business. Permits will be issued only if an applicant is in compliance with “all applicable laws,” which encompasses the tag and hold.

The scrap metal business in the State of Tennessee is an enormous business that is important both economically and environmentally to the State of Tennessee. In excess of 120,000 tons of non-ferrous scrap metal and 2.4 million tons of ferrous scrap metal are exported by recyclers from the State of Tennessee on an annual basis. A single Memphis recycling business recycles more scrap metal in one day than the City of Memphis recycles in an entire year.