October 23rd, 2016

Four West Virginia Cities File Antitrust Lawsuits Against Asphalt Companies

Suit claims companies have worked together to eliminate competition and raise prices, costing municipalities across West Virginia tens of millions of dollars.

Four cities in West Virginia filed class-action lawsuits against a group of asphalt companies that have worked together to create a monopoly that has driven up asphalt prices in West Virginia by 40 percent.

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.

The suits were filed by attorneys Ben Bailey and Mike Hissam, former federal prosecutors who are partners at Bailey & Glasser LLP.  Charles Little, the firm’s Chief Investigator, conducted the investigation leading to the filing of the complaints.

The suits were filed by the City of Charleston in Kanawha County Circuit Court, the City of Parkersburg in Wood County Circuit Court, the City of Beckley in Raleigh County Circuit Court, and the City of Bluefield in Mercer County Circuit Court.

According to the suits, 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.

The result has forced customers to pay at least 40 percent more than they should, allowing the companies 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.

A copy of the complaint filed in Kanawha County can be found here.

Media Coverage:

Charleston Gazette-Mail: Kanawha commissioners vote to join WV Paving lawsuit

Charleston Gazette-Mail: Charleston, other cities sue over alleged paving monopoly

West Virginia Metro News: Attorney outlines claims included in asphalt suit 

Law 360: Asphalt Companies Hit With Antitrust Suits By W.Va. Cities

The State Journal:  WV cities file suit accusing asphalt suppliers, paving companies of eliminating competition, driving up prices

The Register-Herald: City of Beckley sues paving companies for monopolizing the industry

Bluefield Daily Telegraph: Class action lawsuit claims wrong doing by asphalt suppliers