CHARLESTON, W.Va. — Paving companies that are defendants in an antitrust lawsuit over the price of asphalt in West Virginia want a circuit judge to toss the Division of Highways out of the case because the state Attorney General never signed off on it.
“Actions on behalf of the State must be brought by and with the approval of the State’s constitutionally appointed lawyer, the Attorney General of West Virginia, who must represent the state in all litigation,” states the motion for dismissal that was filed Monday.
The lawyer for the paving companies is Booth Goodwin, former U.S. Attorney for West Virginia’s Southern District and a Democratic candidate for governor last spring.
In October, the private firm Bailey & Glasser filed lawsuits on behalf of Charleston, Parkersburg, Beckley and Bluefield. A couple of days later, the state Department of Transportation jumped on board the lawsuit.
Attorney General Patrick Morrisey has remained in the background. On Tuesday, state legislators at an interim session asked state Transportation Department officials to explain the Attorney General’s involvement and why private counsel had taken the lead in representing the state.
After the legislative meeting, Morrisey’s office responded with an emailed statement from spokesman Curtis Johnson: “Our office and the Department of Transportation are engaged in cooperative discussions to handle this matter appropriately. There is no further comment at this time.”
The government agencies involved in the lawsuit claim 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.
The lawsuits contend that the asphalt suppliers have engaged in predatory practices, undercutting and sometimes absorbing competitors. The lawsuit names West Virginia Paving as well as several asphalt providers that are alleged to be either openly or covertly related.
“Combined, the defendants are an industry colossus,” the lawsuits claim.
The Division of Transportation announced its involvement in the lawsuit on Oct. 14, two days after it was initially filed by the cities. The announcement specified that Bailey & Glasser would be representing the state.
“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,” Transportation Secretary Paul Mattox stated in his department’s announcement about the lawsuit.
“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.
The Attorney General’s involvement in the asphalt antitrust suits became an issue during the general election. At the time, Morrisey said he couldn’t discuss his office’s role because the issue is a pending legal matter.
“We’re prohibited under the law from discussing that,” Morrisey said at the time on MetroNews Talkline. “We care very deeply about these allegations. They’re very serious.”
That drew criticism from his Democratic opponent, Doug Reynolds: “For over a year they’ve been pushing for him to get involved, and he’s stonewalled it,” Reynolds said. “When it’s politically convenient for him, he’s holding press conferences.”
During Tuesday’s interim session of the Joint Legislative Oversight Commission on Department of Transportation Accountability, lawmakers asked Mike Folio, counsel for the DOT if the Attorney General’s office turned down a role in leading the lawsuit.
“I was not involved in those discussions,” Folio responded. “I think Mr. Morrisey wants to be involved and he should be involved in this action. I’ve had discussions with him and his staff. He has an interest in protecting the taxpayers with this particular legal action.”
Legislators also asked Folio to describe any participation by the Attorney General’s office.
“I’ve been having discussions with the AG, good positive discussions – we’re going to work together on this,” Folio said.
That answer wasn’t specific enough for Delegate Marty Gearheart, chairman of the committee. He asked the Transportation Department to prepare a narrative for the next time the committee meets to describe how and why outside counsel was selected instead of going with lawyers from the Attorney General’s office.
The paving companies contend that state law requires involvement by the Attorney General.
“While there is a bidding process whereby private attorneys may be engaged to serve on behalf of the Attorney General, DOH has entirely sidestepped that process,” according to the motion to dismiss.
The motion cites the West Virginia Constitution, state code and related decisions by the state Supreme Court.
The paving companies say that if outside counsel is used to represent the state, as sometimes happens, there has to be a competitive bidding process.
“While it is unclear at this point whether DOH has unlawfully paid its private counsel with any public funds, it is clear that DOH has improperly engaged outside counsel without involving the Attorney General in the process,” the motion states.
The motion concludes, “DOH has no statutory authority to hire outside counsel and file lawsuits on its own and without the State’s constitutionally appointed and democratically elected lawyer, the Attorney General.
“Not only is DOH not statutorily authorized, it is in fact statutorily and constitutionally barred as well. As such, this Complaint is fatally flawed and indeed a legal nullity. Accordingly, it should be dismissed in its entirety.”
The case has been assigned to Kanawha Circuit Judge Duke Bloom.