CONCORD — The City of Manchester is appealing Hillsborough County Superior Court Judge Kenneth Brown’s ruling that it could not require scrap metal, pawn shops and secondhand shops to upload information to a Texas company under contract to the city.
Brown ruled state law preempted the requirement, which costs companies 50 cents each time they upload information concerning customers. The city amended the ordinance in August 2012 as a way to regulate dealers and track down stolen goods.
In arguments before the stateSupreme Court Wednesday, the lawyer representing Prolerized New England LLC contended the transaction fee was actually a licensing fee that has cost the company an additional $45,000 a year.
Companies like Prolerized are required to set up accounts with LeadsOnline Inc., a Texas company hired by the city to form a database.
Deputy City Solicitor Peter Chiesa said a thief may steal copper piping or a metal gate in one community, and sell it to a scrap metal dealer in another. A centralized database like LeadsOnline enables law enforcement to more easily find the stolen goods, he said.
But attorney Donald C. Crandlemire maintained state law bars a city from charging a higher-volume dealer more than a lower-volume dealer. He contended the transaction fee is actually a licensing fee.
The lawyers said the licensing fee charged scrap metal dealers is based on the square footage of the business.
The justices wanted to know if the issue of the city setting licensing fees based on square footage had ever been challenged. It hasn’t.
“Maybe that’s the next lawsuit,” Associate Justice James P. Bassett said.
Chiesa said scrap metal dealers had been required to maintain certain records about customers who sell them the metal and make them available for review by police. What changed is they must upload that information to the Texas company and pay 50 cents each time they do it.
Chiesa said it is not true that the scrap metal companies are required to upload confidential, proprietary information about pricing, as Prolerized claims. They are required to identify the person selling the items, the metal sold and provide information — license number, make and model — of the vehicle in which the goods were transported.
Associate Justice Carol Ann Conboy asked if the only change was that the cost of doing scrap metal business in Manchester went up.
“That’s right, your honor,” said Chiesa.
Chief Justice Linda S. Dalianis said there is nothing in state law that prohibits the city from charging a transaction fee. She also said, however, that in 14 years of sitting on the high court she also has found there never is a state statute that doesn’t have a little hole in it.
Crandlemire said the issue is a statewide one the Legislature should take up, not individual cities.
Prolerized, a subsidiary of Oregon-based Schnitzer Steel Industries Inc., challenged the city ordinance on several grounds, including the mandate that scrap dealers set up accounts with LeadsOnline Inc. Schnitzer is parent company to B. Royner and Co., one of two scrap metal dealers in the city.