High School Football

W.Va. officials announce $101 million antitrust settlement with asphalt companies

West Virginia officials today announced a $101.35 million settlement with 11 asphalt and paving companies, calling it the largest, single-state antitrust settlement in West Virginia’s history.

Gov. Jim Justice and Attorney General Patrick Morrisey announced the settlement during a press conference Friday morning, along with officials with the state Department of Transportation and six local governments. Justice and Morrisey, both Republicans, are on ballots for re-election.

The settlement resolves allegations that West Virginia Paving Inc., Kelly Paving Inc., American Asphalt & Aggregate Inc. and eight related companies conspired to monopolize the state-approved asphalt and paving market — reducing competition and maximizing profits at the taxpayers’ expense.

West Virginia Paving, in its own statement, said it is pleased to have reached a final agreement but is “of the firm view that it has always acted lawfully and has not been found to have been in breach of any West Virginia laws.”

The agreement includes $101.35 million in cash and credits, along with a mix of non-monetary terms aimed at restoring competition.

“This achievement means many more roads will be paved. I will not tolerate monopolization on my watch,” Morrisey stated.

“Our settlement will go a long way to restore competition and recoup road funds to the benefit of every taxpayer who pays for and drives West Virginia’s roads.”

Justice called the settlement historic.

“This settlement not only means another $100 million that we’ll be able to invest in continuing to repair and maintain our roads all across West Virginia, but it also means that you, the taxpayers, are getting what you paid for,” the governor stated.

Justice added, “If we can just keep pumping things out like this, this is phenomenal stuff.”

The Attorney General filed the lawsuit in January 2017 with the state’s Department of Transportation, alleging acquisitions or non-compete agreements were used to unlawfully eliminate competitors and push asphalt prices higher in areas controlled by West Virginia Paving, its parent company CRH plc and other defendants as compared to parts of the state with robust competition.

The lawsuit argued high prices strained an already tight highways budget and forced the state to delay construction projects, some indefinitely, causing economic damage and public safety risks.

The settlement requires West Virginia Paving, Kelly Paving and American Asphalt to make a combined, upfront payment of $30.35 million to the state and local participants. That includes a combined share of $4.4 million for Beckley, Bluefield, Charleston, Huntington, Parkersburg and Kanawha County.

West Virginia Paving also agreed to provide the state an additional $71 million in credits that can be applied to already completed, yet unpaid, road projects and future work over the next seven years.

The non-monetary terms include a mix of price restrictions, the elimination of a non-compete clause and required advance notice for future acquisitions.

For instance, West Virginia Paving, CRH and its subsidiaries agreed to give the state a 120-day notice of any contemplated acquisition, merger or joint venture that exceeds $500,000 in nine southeastern counties.

West Virginia Paving and CRH must give the same notice for any such transaction that exceeds $1 million in 16 additional counties from the Mid-Ohio Valley, through the Charleston-Huntington metro area and further south to the Big Sandy River and Tug Fork.

The settlement also gives American Asphalt control of a joint venture with two CRH subsidiaries and ends a non-compete clause, allowing American’s owner to sell asphalt more broadly. In return, the CRH subsidiaries can move forward with eliminating a requirement to buy a minimum amount of asphalt from the joint venture.

Likewise, the terms institute price restrictions upon co-defendant Camden Materials LLC – a joint venture between Kelly Paving and West Virginia Paving. The limits will remain in place for seven years unless an unaffiliated, third-party competitor takes over Camden Materials.

The civil complaint set forth charges of trade restraint, monopolization and attempts to monopolize – all violations of the state’s Antitrust Act.

West Virginia Paving, Kelly Paving and American Asphalt, together with each co-defendant, denied wrongdoing as part of the agreement. All parties agreed to the settlement to avoid the delay, expense, inconvenience and uncertainty of protracted litigation.

Other listed defendants were Oldcastle Inc., Oldcastle Materials Inc., Southern West Virginia Paving Inc., Southern West Virginia Asphalt Inc., American Asphalt of West Virginia LLC and Blacktop Industries & Equipment Company.

“All parties believe that a mediated settlement is the most pragmatic solution to their differences,” West Virginia Paving stated.

“WVP has a long and successful history of doing business with WVDOT and will continue to do so going forward. This agreed settlement allows both parties to move ahead, avoids the uncertainty of a protracted legal process and allows WVP to continue servicing its customers.”

The Attorney General’s Office hired the law firm of Bailey & Glasser as lead outside counsel for the case, along with Robinson & McElwee and the Webb Law Centre.

Morrisey, during a briefing today, said the outside counsel share of the settlement was somewhere around 7 percent to 8 percent.

More News

West Virginia Coal Association president backs upgrades to coal-fired plants
Chris Hamilton's comments on Monday's "MetroNews Talkline" came days after the Public Service Commission of West Virginia held a public hearing about Appalachian Power and Wheeling Power's request to increase rates to upgrade the John Amos, Mountaineer and Mitchell facilities.
September 27, 2021 - 11:30 pm
Testimony begins in McCauley trial
Andy McCauley Jr. has been charged for the disappearance and death of 15-year-old Riley Crossman.
September 27, 2021 - 8:45 pm
Monongalia County BOE president thankful following levy approval
The levy has been in place since the late 1970s and provides the district with funding for daily operations, programs and technology.
September 27, 2021 - 7:46 pm
SBA hears updated plans from Lincoln and Upshur County school systems
Upshur County will seek a bond to make school improvements and Lincoln County is now cleared to seek funding for a much needed new elementary school to serve the Duval-Midway community.
September 27, 2021 - 2:31 pm