Md. auto emissions tester sues rival, charging fraud

May 05, 1993|By Peter Jensen | Peter Jensen,Staff Writer Staff writer John W. Frece contributed to this article.

The company that runs Maryland's tailpipe monitoring program filed a $100 million lawsuit in federal court yesterday against its predecessor, charging the rival company with fraud and unfair competitive practices.

The suit was filed in U.S. District Court in Manhattan by Maryland-based Envirotest Systems and its subsidiary, Envirotest Technologies Inc., against Systems Control Inc. and Sun Electric Corp., both subsidiaries of Snap-On Tools Inc.

The allegations come just weeks before Maryland officials are scheduled to select a new contractor for the state's vehicle emissions inspection program. The bidders have not been made public, but Envirotest and Systems Control are both assumed to be vying for the contract, which is thought to be worth $100 million to the winner.

Envirotest's charges center on misrepresentions that Systems Control allegedly made about its history, assets and capabilities to authorities in Maine, which also is creating a new emissions inspection program.

A Systems Control brochure states, for instance, that the company runs the Maryland inspection program, the suit alleges. Envirotest purchased Systems Control's assets, including the Maryland contract, in April 1992. The name, Systems Control Inc., was sold to Sun Electric, which was bought by Snap-On Tools in October.

"We are fearful that they've gone around the country making these statements generally," said Chester Davenport, chairman of Envirotest. "They have pictures of our stations in their brochure. If they've made false statements, Maryland authorities should know that."

Mr. Davenport said the rival companies are competing for federally mandated tailpipe pollution monitoring programs in at least 15 states.

Bruce C. Bereano, Systems Control's lobbyist in Maryland, said the timing of the lawsuit was not coincidental, since it comes on the eve of the opening of bids to run Maryland's vehicle emissions testing program.

"I just think this is a deliberate effort on the eve of the contract being awarded in Maryland to muddy the waters . . . just to throw mud up against the wall and hope that it sticks," Mr. Bereano said.

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