CHARLESTON, W.Va. — The state Attorney General’s Office is now taking the lead in an antitrust lawsuit claiming the price of asphalt in West Virginia markets has been inflated through noncompetitive practices.
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.
The Attorney General’s involvement has been an issue since then.
The matter arose a few times during Patrick Morrisey’s re-election campaign for Attorney General. A legislative committee overseeing the state Department of Transportation has aggressively asked leaders in the Department of Transportation how and why the lawsuit was filed without the Attorney General. And lawyers for the asphalt companies filed a motion to dismiss, saying the only way the state could legally file a claim is through the Attorney General.
Throughout, Morrisey and his office had said there was nothing that could be said publicly while the matter was under investigation.
Today, Morrisey addressed his office’s involvement and said the Department of Transportation never should have gone on without it. He said his office filed a new lawsuit this morning and that the lawsuit originally filed through Bailey & Glasser on behalf of the DOT has been withdrawn.
“We will always do the right thing and not rush an action forward,” Morrisey said during a news conference in his office at the Capitol.
Morrisey noted that he ran on the promise of a bidding process to retain outside counsel when he was first elected Attorney General in 2012.
“I want to send a message,” he said. “We’re not going to allow these no-bid, family-and-friends procedures take place.”
He said his office did not previously authorize the Department of Transportation to enter an agreement with Bailey & Glasser.
“Highways has no authority to retain its own outside counsel,” he said.
But he said his office lacks internal resources to pursue the case without retaining outside counsel. Morrisey said a request for proposal was likely to go out today, and that law firms would have a couple of weeks to bid. He said his office would be looking at both quality and cost. He said his office hopes to pay outside counsel between 17 and 25 percent of any fees earned at the lawsuit’s conclusion.
Morrisey did not rule out the possibility that Bailey & Glasser would wind up being selected in the end anyway. Michael Hissam, a lawyer with Bailey&Glasser, said, “If the AG puts out a request for proposal, we will submit a bid to do the work.”
The lawsuit filed by Morrisey’s office alleges that asphalt companies doing business in West Virginia gobbled each other up or entered into noncompetitive agreements, driving out competitors and pushing asphalt prices higher. Eleven companies are named.
“This is collusion, plain and simple,” Morrisey said today.
The lawsuit seeks maximum fines and a judgment for three times the states damages, an amount not yet determined. The lawsuit also seeks an order taking whatever steps are necessary to restore competition within West Virginia’s asphalt market.
Defendants listed in the complaint are CRH, Kelly Paving, American Asphalt & Aggregate, Oldcastle Inc., Oldcastle Materials Inc., West Virginia Paving, Southern West Virginia Paving, Southern West Virginia Asphalt, Camden Materials, American Asphalt of West Virginia and Blacktop Industries & Equipment.
The companies have denied the claims in the original lawsuits. For instance, the asphalt companies say the original lawsuits fail to identify a specific geographic market in dispute. They also say comparing asphalt prices in an area of Kentucky, as the original lawsuit did, to say West Virginia asphalt prices are too high is apples-to-oranges.
Today, West Virginia Paving issued a statement indicating its disappointment that another lawsuit has been filed.
“We will continue to fight these unfounded, slanderous allegations that threaten the livelihood of our 350 hard-working West Virginians and the safety of our roads that our friends, families and fellow West Virginians drive on every day. While we maintain our commitment to West Virginia, it’s these types of lawsuits that continue to make this state a difficult place to operate a business,” West Virginia Paving President Bob Brookover stated.
“We were disheartened to once again learn of a lawsuit filed against West Virginia Paving through media outlets. We have offered to work with, and were hoping for cooperation with the West Virginia Attorney General’s Office, but we are disappointed to learn of yet another lawsuit being filed.”