CHARLESTON – Four cities are suing West Virginia Paving after they claim is has created a monopoly and violated West Virginia’s Antitrust Act.
The complaints were filed as class action lawsuits.
Southern West Virginia Paving Inc.; Southern West Virginia Asphalt Inc.; Kelly Paving Inc.; Camden Material LLC; American Asphalt & Aggregate Inc.; American Asphalt of West Virginia LLC; Blacktop Industries and Equipment; and John and Jane Does 1-25 were also named as defendants in the suits.
The cities of Charleston, Parkersburg, Beckley and Bluefield filed complaints Oct. 12 against the companies, alleging the defendants illegally inflated the cost of asphalt, forcing cities to pay up to 40 percent more than they should have.
The Charleston complaint alleges that the defendants’ “brazen statewide monopolization scheme in West Virginia, which has illegally inflated the cost of asphalt, the primary commodity used in building and repairing roads, parking lots, driveways, recreation courts and airport runways … and other miscellaneous products such as roofing.”
The defendants’ scheme unlawfully forced the class to pay at least 40 percent more for asphalt, inflated the defendants’ market share to over 80 percent in each class area and illegally extracted millions of dollars in overpayments from the class, according to the suit.
Charleston claims the class spends tens of millions of dollars indirectly on asphalt each year when they purchase asphalt paving and other asphalt contractor services containing the defendants’ asphalt from the defendants and third parties.
“Municipal and local governments, in particular, devote a disproportionate share of their annual budgets and frequently have to delay, reject or restrict the scope of critical road repair and construction projects due to the unlawfully excessive cost of the asphalt used in paving jobs in the areas dominated by the defendants,” the complaint states.
Charleston claims that given the inherent importance of roads, and therefore asphalt, in West Virginia, robot competition in the industry is essential.
“Roads cannot be built or maintained to the extent required when defendants dictate the price of asphalt and impose unlawfully high rates,” the complaint states. “The importance of minimizing asphalt costs is why the class needs a competitive process in which high quality and low cost is the norm. Asphalt monopolies are anathema to that outcome.”
Charleston claims the competition in West Virginia’s asphalt industry is virtually non-existent and the defendants have engaged in an ongoing series of illegal and covert anticompetitive combinations, acquisitions, agreements and practices.
West Virginia Paving was dishonest about its ownership stake in other companies and bid against those companies to crease a façade of competition, according to the suit.
The city is seeking compensatory and punitive damages with pre- and post-judgment interest, as well as that the defendants be enjoined from engaging in such unfair and unlawful acts and practices. The city is being represented by Benjamin L. Bailey and Michael B. Hissam of Bailey & Glasser LLP.
The Charleston complaint has been assigned to Circuit Judge Tod J. Kaufman.
Kanawha Circuit Court case number: 16-C-1552