Ohio-based Republic Steel has been ordered to pay nearly $4.6 million to a Pennsylvania trucking company and its affiliate after a federal jury determined that the steel mill breached its contract by failing to pay the companies millions of dollars in outstanding invoices for transportation services the carriers provided in 2019 and 2020.
The decision, which came after a three-day trial that ended July 12, awarded nearly $2.5 million in favor of Beemac Inc., doing business as Beemac Trucking, and nearly $2 million for Deemac Services, both of Ambridge, Pennsylvania. It was upheld by U.S. District Court Judge William S. Stickman IV on Aug. 10.
According to court documents, Republic Steel agreed to Beemac and Deemac’s transportation services for specific lanes offered by the companies in 2019 and 2020, but the steel manufacturer “refused to make payment of the amounts” for the companies’ transportation services for the two years pursuant to the agreement.
Attorney Daniel McLane, who represented Beemac and Deemac, said the suits had separate dockets but were consolidated for trial in the U.S. District Court for the Western District of Pennsylvania.
“We are pleased with the jury’s verdict and the attention they paid to this case,” McLane told FreightWaves. “We’re excited to now move forward and continue to provide the great services we do in this industry.”
Republic announces layoffs after $4.6M verdict
The same day Stickman entered the final judgment against Republic Steel, a subsidiary of Mexico-based Grupo Simec, the steel mill announced plans to indefinitely cease steel production at some of its plants in North America, including Canton and Lackawanna, New York, laying off nearly 500 workers.
Attorneys for Republic Steel did not respond to FreightWaves’ request seeking comment about the verdict or the timing of the layoffs at two of its steel mills.
Bill Teets, communications director for the Ohio Department of Job and Family Services, confirmed the agency did receive a Worker Adjustment and Retraining Notification Act (WARN Act) about the layoffs in Canton, but that the letter didn’t reach the agency until 12 days after the closure, on Aug. 22.
“It appears it was mailed to the wrong address and was delayed in getting it to us,” Teets told FreightWaves.
The notification, obtained by FreightWaves, states that Republic Steel “has encountered sudden and unforeseen business circumstances that will force the company to temporarily idle its steelmaking operations.”
Beemac Trucking and Deemac, a 3PL, originally filed suit in Beaver County, Pennsylvania, in September 2020, before the complaint was moved to federal court later that same month.
Prior to going to trial, McLane said the parties underwent a mediation process but that “it was unsuccessful.”
According to its website, Beemac and Deemac were founded by Rick Macklin in the mid-1980s. Beemac, which has more than 400 truck drivers, later formed an employee stock ownership program in 2019.
Will Republic Steel appeal?
McLane, a partner with Duane Morris, said he hasn’t heard whether Republic Steel plans to file an appeal in the case, but the company has 30 days from the judge’s final order, which would be around Sept. 10
“I do not know their [Republic Steel] intentions. I guess we’ll have to wait and see,” McLane said.
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