Largest single-state antitrust in state’s history settled
CHARLESTON, W. Va. (WSAZ) — A settlement has been reached between 11 asphalt and paving companies.
West Virginia Attorney General Patrick Morrisey, Governor Jim Justice, the state Department of Transportation and six local governments reached a $101.35 million settlement on Friday with the asphalt and paving companies.
Officials say this is the largest, single-state antitrust settlement in West Virginia’s history.
According to the Attorney General, the settlement resolves allegations that West Virginia Paving Inc., Kelly Paving Inc., American Asphalt & Aggregate Inc. and eight related companies worked to monopolize the state approved asphalt and paving market. This reduced competition and maximized profits at taxpayers' expense.
In the agreement is $101.35 million in cash and credits, along with a mix of non-monetary terms to restore competition.
The lawsuit was filed by the Attorney General in January of 2017 along with the state’s Department of Transportation. It alleged acquisitions or non-compete agreements were used to unlawfully eliminate competitors and raise asphalt prices in areas controlled by West Virginia Paving, its parent company CRH plc and others. This is compared to parts of the state with robust competition.
Attorney General Patrick Morrisey says the lawsuit claims prices strained an already tight highways budget and it forced the state to delay construction projects, causing economic damage and public safety risks.
The settlement requires West Virginia Paving, Kelly Paving and American Asphalt to make a combined, upfront payment of $30.35 million to the state and local participants. This also includes a share of $4.4 million for Beckley, Bluefield, Charleston, Huntington, Parkersburg and Kanawha County.
Morrisey says West Virginia Paving also agreed to give the state an extra $71 million in credits. They can go to already completed, yet unpaid, road projects and future work over the next seven years.
The press release states non-monetary terms include a mix of price restrictions, the elimination of a non-compete clause and required advance notice for future acquisitions. This means West Virginia Paving, CRH and its subsidiaries have agreed to give the state a 120-day notice of any contemplated acquisition, merger or joint venture that goes above $500,000 in nine southeastern counties.
The two companies also have to gibe the same notice for any transaction that goes over $1 million in 16 additional counties from the Mid-Ohio Valley, through the Charleston-Huntington metro area and further south to the Big Sandy River and Tug Fork.
This will also give American Asphalt control of a joint venture with two CRH subsidiaries and ends a non-compete clause. It lets American’s owner to sell asphalt more broadly. Morrisey says in return CRH subsidiaries can move forward with eliminating a requirement to purchase a certain amount of asphalt from the joint venture.
This agreement also institutes price restrictions on co-defendant Camden Materials LLC – a joint venture between Kelly Paving and West Virginia Paving. Officials say the limits will stay in place for seven years, unless a third party competitor that’s unaffiliated takes over Camden Materials.
This civil complaint also set forth charges of trade restraint, monopolization and attempts to monopolize. These are all considered violations of the state’s Antitrust Act.
West Virginia Paving, Kelly Paving and American Asphalt, each co-defendant, denied wrongdoing as part of the agreement. All parties agreed to the settlement to avoid the delay, expense, inconvenience and uncertainty of protracted litigation.
“This achievement means many more roads will be paved,” Attorney General Morrisey said. “I will not tolerate monopolization on my watch.”
“Our settlement will go a long way to restore competition and recoup road funds to the benefit of every taxpayer who pays for and drives West Virginia’s roads. We can never afford to allow an unlawful monopoly to victimize West Virginia and maximize its profits on the backs of state taxpayers, especially when every dollar is needed to pave our roads and compete effectively with other states for business and tourism,” said Morrisey.
“This is a historic day for West Virginia, and all West Virginians should be really, really proud,” Gov. Justice said. “This settlement not only means another $100 million that we’ll be able to invest in continuing to repair and maintain our roads all across West Virginia, but it also means that you, the taxpayers, are getting what you paid for. We have made incredible progress over the last few years with my Roads To Prosperity program and Secondary Roads Maintenance Initiative, and this money will allow our great Department of Transportation to do even more. I want to thank everyone who played a part in helping to reach this settlement.”
According to the Attorney General’s Office, other listed defendants include Oldcastle Inc., Oldcastle Materials Inc., Southern West Virginia Paving Inc., Southern West Virginia Asphalt Inc., American Asphalt of West Virginia LLC and Blacktop Industries & Equipment Company.
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