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Jan 06, 2024

Westbury Paper sues Hempstead Town, claiming retaliation against former recycling vendor over contract dispute

Westbury Paper Stock's recycling plant in Westbury, shown in 2020. Credit: Newsday/Alejandra Villa Loarca The town of Hempstead retaliated against its former recycling vendor, denying it hundreds of

Westbury Paper Stock's recycling plant in Westbury, shown in 2020. Credit: Newsday/Alejandra Villa Loarca

The town of Hempstead retaliated against its former recycling vendor, denying it hundreds of thousands of dollars in COVID-19 relief funds, after the company attempted to break its contract with the municipality, according to a $15 million federal lawsuit filed by the vendor.

The suit, filed in U.S. District Court in Central Islip on Friday, represents the latest phase in a long-running legal battle, dating back nearly five years, between the nation's largest township and Westbury Paper Stock, which processed the town's recyclables between 2006 and 2021.

The company has been locked in litigation with the town since November 2019 following a shake-up in the global recycling market when China, a massive consumer of recycled goods, placed restrictions on the recovered materials it would buy from abroad, torpedoing the price of recyclables such as paper and plastic.

In court papers, Westbury Paper argued that Hempstead failed to address complaints that residents were including non-recyclable and "contaminated" materials for curbside pickup and that town employees were accepting items on collection days not permitted in the contract. Recycling is contaminated when it includes materials that cannot be reprocessed or are tainted, such as a pizza box covered in grease.

Hempstead contends it made “reasonable efforts” to reduce contamination — the level of which has remained within the bounds of the contract — and that Westbury Paper did not work with the town to fix the problem before seeking to get out of the agreement.

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In 2020, the GOP-led township received $133 million federal CARES Act funding that was sent to counties and states to cover expenses incurred from managing the pandemic. The amount, which was $30 million more than what was awarded to Nassau County, is based on the town's population of more than 800,000 residents.

In November 2020, Westbury Paper, which managed the town's recyclables during the first 20 months of COVID, applied to the town for $380,000 in funding to offset its increased operational costs during the pandemic, the lawsuit states. Those costs included adopting social distancing policies and accommodating for employees who became sick with the virus, the suit said.

The town denied the application, the company said, even though Hempstead transferred $43.6 million in CARES Act funds to the town’s Sanitation Operation Fund, which works with Westbury paper on recycling, and another $17.3 million to its general fund, the lawsuit states.

"Hempstead’s conduct at issue … was motivated by evil motive or intent, or involved reckless or callous indifference to plaintiff Westbury Paper’s federally protected rights," the lawsuit states.

The company contends that multiple other private businesses, including law firms, engineering companies, food pantries and Great Northern Fiber, which took over town recycling when Westbury Paper's contract officially expired in late-2021, received CARES Act funding from the town.

Officials at Westbury Paper Stock, along with their attorney, Dan Shapiro of the Uniondale law firm Ruskin Moscou Faltischek, did not respond to requests for comment on the lawsuit.

Greg Blower, a spokesman for the Town of Hempstead, which continues to battle with Westbury Paper regarding its efforts to prematurely break the contract and to seek compensation for sullied recycling that it had to toss, “declined to comment on the suit, citing the pending litigation."

The federal lawsuit contends the town violated Westbury Paper's First Amendment rights; the Equal Protection and Due Process clauses of the 14th Amendment and the Takings Clause of the Fifth Amendment, which prohibits the taking of private property “for public use" without compensation.

"The sole reason for the town’s refusal to act upon and grant Westbury Paper’s CARES Act Application was to single out plaintiff, to retaliate against plaintiff for filing its state court counterclaims, and to coerce plaintiff to forfeit its contractual rights," the federal lawsuit states.

Democratic Long Island lawmakers, meanwhile, have asked the U.S. Treasury to investigate how the Town of Hempstead spent its federal stimulus funding, including more than $70 million that was used to cover payroll.

Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.