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Lawsuit against Phoenix Group Metals dismissed

On March 28, 2013, District Judge Gray H. Miller of the Federal District Court for the Southern District of Texas dismissed with prejudice the business disparagement lawsuit of Flores v. Phoenix Group Metals, LLC; 4:10-cv-05143. The dismissal was a resounding victory for Phoenix, Arizona-based Phoenix Group Metals, LLC. This brings to an end the lawsuit filed by Robert Flores d/b/a TXCAT on December 22, 2010.

Flores’ lawsuit claimed that Jay Robie, the chief executive officer of Phoenix Group Metals (PGM) and the chairman of the Automotive Parts Remanufacturers Association, Core Suppliers Advisory Council, sent out e-mails and newsletters to individuals in the recycling industry that TX CAT engaged in a fraudulent scam and peddled a trailer load of low grade catalytic converters. As a result, TX CAT claimed that it lost business and that its lender withdrew its financial support for building a smelter.

Federal Magistrate Judge Nancy K. Johnson was assigned by Judge Miller to provide recommendations regarding the motion filed by Phoenix Group Metals to terminate TX CAT’s case. After reviewing and considering the filings by both parties, Judge Johnson determined that the affidavit filed by TX CAT’s private lender, Susan Benton, in opposition to Phoenix Group Metal’s dismissal motion contradicted her prior sworn testimony. Benton’s affidavit was stricken in its entirety as a “sham affidavit.” Magistrate Judge Johnson determined that Benton’s affidavit “lacks credibility, much less persuasiveness.”

In addition, Magistrate Judge Johnson found that the claims stated in TX CAT’s lawsuit were barred because it was filed after the expiration of Texas’s applicable statutes of limitation. Moreover, Magistrate Judge Johnson determined that TX CAT provided no evidence that it sustained any specific damages that were caused by Robie’s e-mails and newsletters and that TX CAT’s claimed damages were “nothing more than speculation” which fell far short of the required “proof of realized or liquidated losses.” The Magistrate’s recommendations were duly adopted by Judge Miller who dismissed TX CAT’s entire lawsuit with prejudice and entered a final judgment in favor of PGM and Robie.