CHARLESTON-
The West Virginia Department of Transportation (DOT) and Division of Highways
filed an antitrust suit today against a group of asphalt companies that have
worked together to create a monopoly that has driven up asphalt prices in West
Virginia by as much as 40 percent.
The
suit alleges that the defendants — including West Virginia Paving, Southern
West Virginia Paving, Southern West Virginia Asphalt, Kelly Paving and others —
are no longer competing but instead have worked together to create a de
facto monopoly that allows them to charge inflated prices.
With
the assistance of one of the nation’s leading antitrust consulting firms, the
DOT’s Legal Division has identified a pattern of questionable conduct among
certain asphalt manufacturers and paving contractors that has strangled
competition, compromised quality, and resulted in millions of dollars of
improper charges by many asphalt contractors.
“About
one year ago, I directed the Legal Division to review and explore options to
redress apparent anti-competitive behavior and monopolistic conduct in West
Virginia’s asphalt market,” said Transportation Secretary Paul Mattox.
“We have now concluded that filing this complaint is necessary to ensure our
taxpayers aren’t unfairly bearing the financial burden of this improper
behavior. We will continue to review conduct among asphalt manufacturers
and other contractors and launch future initiatives to promote competitive
pricing.”
The
DOT’s suit was filed in Kanawha County Circuit Court by attorneys Ben Bailey
and Mike Hissam, former federal prosecutors and partners at Bailey &
Glasser LLP in Charleston.
According
to the suit, the defendants have cooperated to eliminate competitors and
maintain the appearance of a competitive marketplace, while actual competition
disappeared. The defendants have gained control of at least 15 asphalt
plants in West Virginia that once competed with each other. They have
also acquired or combined numerous paving companies, allowing them to control
both the supply of asphalt and the actions of paving contractors. Those
actions have forced West Virginia’s taxpayers to pay as much as 40 percent more
than they should, allowing the defendants to reap millions of dollars in
overpayments. These overcharges have resulted in less road construction and
maintenance. The lawsuit seeks to end this monopolization and recover the
overcharges that resulted.