CHARLESTON, W.Va. — Four West Virginia cities are trying to bust up what they claim is an asphalt monopoly.
The cities of Charleston, Parkersburg, Beckley and Bluefield have filed lawsuits against West Virginia Paving and related companies.
The cities claim that competition among asphalt suppliers has been suppressed to the point that they’re paying 40 percent more to pave roads and patch potholes than they really should.
“Defendants’ conduct is particularly egregious given the state of West Virginia’s roads,” according to the lawsuits. “Many of West Virginia’s roads are in a state of disrepair, with repeated calls from the public for cash-strapped governments to ‘fix the roads.'”
West Virginia Paving is, so far, declining to say anything.
“At this time we do not have any comment,” said a woman who answered the telephone at the Dunbar-based business this afternoon.
Charleston Mayor Danny Jones declined to comment today. Officials with the City of Parkersburg said Mayor Jimmy Columbo also wasn’t commenting right now.
The lawsuits, filed in Kanawha, Wood, Raleigh and Mercer counties by Bailey & Glasser, contend that the asphalt suppliers have engaged in predatory practices, undercutting and sometimes absorbing competitors.
“Defendants are a collection of once-vigorous competitors in asphalt production, paving and contracting services, now illegally combined into actual or de facto monopolies in at least 30 West Virginia counties,” the lawsuit states — naming West Virginia Paving, Southern West Virginia Paving, Southern West Virginia Asphalt, Kelly Paving, Camden Materials, American Asphalt of West Virginia and Blacktop Industries and Equipment.
“Combined, the defendants are an industry colossus,” the lawsuits claim.
Over time, the lawsuits claim, the defendants gained control of at least 15 asphalt plants that at one time directly competed against each other.
Many of the plants that were acquired were targeted because they had been competitive and took business away from the defendants, the lawsuits claim. The defendants also shut down asphalt plants after spending significantly to buy them, according to the lawsuits.
The lawsuits claim the defendants grew to 80 percent of the market share, driving up prices for municipal and local governments.
That’s the case in at least 30 West Virginia counties, according to the lawsuits: 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.
Moreover, the asphalt plants are now trying to gain control of the sources of aggregate material — representing 95 percent of the material needed to acquire asphalt — in West Virginia, the lawsuits contend.
The lawsuits claim that as the asphalt producers grew in power they bullied other providers to keep them out of the market. They also used a complex ownership structure to obscure their relationship, the lawsuits claim.
“This case is about defendants’ braze statewide monopolization scheme in West Virginia, which has illegally inflated the cost of asphalt, the primary commodity used in building and repairing roads, parking lots, driveways, recreation courts and airport runways and other miscellaneous products such as roofing,” the lawsuits state.
The asphalt empire began, according to the lawsuits, with the consolidation of West Virginia Paving, Southern WV Asphalt and Southern WV paving.
“Defendants’ combination with Mountain Enterprises turned them into a behemoth.”
Mountain Enteprises had dominated large swaths of West Virginia. Once that domino fell, the resulting asphalt organization then wrapped in W-L Construction & Paving and Blizzack, Inc.
Appalachian Paving and Aggregate, located in Lenore, won a $3.6 million contract to pave a Mingo County Airport.
“Shortly thereafter, defendants consumed the company.”
American Asphalt & Aggregate was one of the competitors that remained. It began bidding and winning through lower prices, according to the lawsuits.
“Rather than compete on price, defendants bought off American Asphalt and its subsidiary Blacktop Industries.
Blacktop Industries never won a bid against West Virginia Paving again, the lawsuits state.
That pattern continued through competitor after competitor, according to the lawsuits, like an asphalt Pac-Man.
Bailey & Glasser compared the prices being paid in West Virginia to the prices being paid in Kentucky, expecting similarities. Instead, the lawyers said, they discovered 40 percent more was being paid in West Virginia.
“Governmental bodies may be forced to either delay road construction repairs or not pursue them at all, causing immeasurable consequential economic damage and unconscionable public safety risks,” the lawsuits state.
“West Virginia is in dire straits when it comes to road finance.”
The lawsuits ask for jury trials. They ask for damages, punitive damages, for the asphalt companies to stop predatory practices and for the costs of the legal work and attorneys fees.