The City of Beckley is suing a group of paving companies it says has developed an illegal statewide monopoly to inflate the cost of asphalt.
The complaint was filed in Raleigh County Circuit Court on Wednesday against West Virginia Paving, Southern West Virginia Paving, Southern West Virginia Asphalt, Kelly Paving, Materials LLC, American Asphalt and Aggregate, American Asphalt of West Virginia, and Blacktop Industries and Equipment.
Nearly identical complaints are also being filed in circuit courts on behalf of the city of Charleston, Bluefield and Parkersburg by Charleston-based attorneys Ben Bailey and Michael Hissam of Bailey and Glasser LLP.
The complaint asserts these companies have violated the West Virginia Antitrust Act, which protects free trade and commerce.
The defendants were once competitors in asphalt production, but are now "illegally combined into actual or de facto monopolies" in at least 30 counties across the state, and have abused their market power through a "common scheme that has harmed competition," according to the complaint.
The suit claims this scheme has caused City of Beckley to pay at least 40 percent more for asphalt than it should and inflated the defendants' collective market share to more than 80 percent.
The companies average a 82 percent monetary market share, but that amount rises to around 95 percent in Boone, Cabell, Calhoun, Clay, Fayette, Grant, Greenbrier, Hardy, Jackson, Kanawha, Lincoln, Logan, Mason, McDowell, Mercer, Monroe, Nicholas, Pendleton, Pocahontas, Putnam, Raleigh, Ritchie, Roane, Summers, Tucker, Tyler, Wayne, Wirt, Wood and Wyoming counties.
The companies listed in the suit are accused of owning or controlling at least 15 asphalt plants that once competed with each other to keep prices low. They also acquired competitive plants at "huge sums" and then shuttered them.
The court document states that existing rival companies cannot bid projects against the defendants because they control both the supply of asphalt and paving contractors.
The attorneys, both former prosecutors, also say these companies have submitted multiple bids on projects to give the appearance of competition and to "cloak their common ownership."
In addition to buying out competitors, the companies listed in the suit are accused of inducing boycotts against competitors, threatening to put new contractors out of business, breaking state and federal truckload weight laws, lying to municipalities and mandating statewide non-compete covenants with competitors.
Moreover, to further control the asphalt market in West Virginia, the defendants are in the process of acquiring control of the sources of aggregate material in West Virginia, which represents 95 percent of the material needed to make asphalt.
As a result of this monopoly, the complaint said much needed paving projects have been postponed or delayed due to the cost of asphalt, causing economic damage and possible public safety risks.
The lawsuit seeks to recover illegal overcharges caused by the monopolization and restoration of asphalt competition in the state.
The City of Beckley is seeking class action certification for the suit, and the court filings identify the class as West Virginia citizens who have purchased hot-mix asphalt from the defendants on or after January 1, 2006.
The case has been assigned to Judge Robert Burnside.
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