State's allegations of price-fixing by asphalt companies heads to mediation

By Kyla Asbury | Apr 8, 2019

CHARLESTON — West Virginia continues a fight against several asphalt companies it claims drove up the price of asphalt in the state and suppressed competition.

An order was filed March 20 in Kanawha Circuit Court noting that mediation will be conducted July 25 at Bailey & Glasser in Charleston. It will be conducted by recently retired Circuit Judge Christopher C. Wilkes, who was assigned by the Business Court Division as resolution judge.

Mediation statements are due to Wilkes by July 19, according to the document.

West Virginia has had many issues with the roads, but the lawsuit, which was filed in 2017, points to the cost of asphalt as a huge reason for their deteriorating condition. On Jan. 11, 2017, Attorney General Patrick Morrisey's office filed the lawsuit in Kanawha Circuit Court alleging 11 asphalt and paving companies violated the state’s Antitrust Act.

The lawsuit claims CRH and its numerous subsidiaries, Kelly Paving Inc. and American Asphalt & Aggregate Inc. drove out competitors and pushed asphalt prices higher across a substantial portion of West Virginia via acquisition or non-compete agreements.

The lawsuit contends the price of state-approved asphalt increased at a higher rate in areas controlled by CRH and other defendants as compared to other parts of the state where there is more competition. Morrisey says those high prices strain the state highways budget. That, according to the lawsuit. forces the state to delay construction projects, some indefinitely, causing economic damage and public safety risks.

The civil complaint, alleges trade restraint, monopolization and attempts to monopolize – all violations of the state’s Antitrust Act – along with a count of unjust enrichment.

The attorney general's office seeks the maximum fines and a judgment for three times the state’s damages, along with an order restoring competition within the state-approved asphalt manufacturing and sale market. 

Other defendants listed in the complaint are Oldcastle Inc., Oldcastle Materials Inc., West Virginia Paving Inc., Southern West Virginia Paving Inc., Southern West Virginia Asphalt Inc., Camden Materials LLC, American Asphalt of West Virginia LLC, and Blacktop Industries & Equipment Co.

Seven lawsuits were filed against West Virginia Paving in circuit courts across the state in 2016. A motion to consolidate them in Kanawha County was filed in October 2016. The lawsuits list West Virginia Paving Inc.; Southern West Virginia Paving Inc.; Southern West Virginia Asphalt Inc.; Kelly Paving Inc.; Camden Materials LLC; American Asphalt of West Virginia LLC; American Asphalt & Aggregate Inc.; and Blacktop Industries and Equipment as defendants.

Those suits allege the defendants have been inflating prices of asphalt and creating a de facto monopoly. The suits allege the paving companies charged the cities and the Department of Highways 40 percent, and sometimes more, for asphalt and paving supplies than it should have been charging.

West Virginia Paving acquired at least 15 asphalt plants that previously had competed against each other for bids in the state, according to the suits. The lawsuits note that West Virginia Paving has more than 80 percent of the market share in the Huntington, Charleston, Bluefield, Parkersburg and Beckley areas.

The defendants’ alleged 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 suits.

In 2016, the state Legislature passed a law requiring state agencies to go to the Attorney General’s office for representation in lawsuits, even if outside counsel later is required. In December, the paving companies filed a motion to dismiss the lawsuits because Morrisey’s office hadn’t been involved in the case on behalf of the Department of Transportation.

Kanawha Circuit Court-Business Court Division case number 18-BCD-01

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