Workers from West Virginia Paving apply asphalt to Tennis Club Road, in Charleston, in June 2014. Charleston and three other cities are suing West Virginia Paving, alleging that the company violated the state Antitrust Act by monopolizing the market.
CHARLESTON, W.Va. — Four cities in West Virginia, including Charleston, are suing West Virginia Paving Inc. and several of its sister companies for allegedly violating the state’s Antitrust Act.
A complaint filed by the city of Charleston in Kanawha Circuit Court alleges a “brazen statewide monopolization scheme” led by West Virginia Paving that illegally inflated the cost of asphalt, forcing cities to pay up to 40 percent more for it than they should have.
“Further, badly needed road construction and repairs have been delayed or unaddressed by the unnecessarily high costs of asphalt,” the complaint alleges.
Similar complaints were to be filed Wednesday in various circuit courts on behalf of the cities of Parkersburg, Beckley and Bluefield.
The complaint alleges that West Virginia Paving acquired at least 15 asphalt plants that previously competed against each other in the state, after those plants offered more competitive prices and began taking asphalt sales away from the defendants.
The capital city also accuses West Virginia Paving of monopolizing other paving companies, spending huge sums of money to acquire — and then shutter — competing asphalt plants and paving companies.
“The defendants have amplified the negative effects of their asphalt plant acquisitions by acquiring or combining with numerous key asphalt paving companies … controlling both the supply of asphalt and owning paving contractors that apply the asphalt has foreclosed potential rival paving companies from bidding against the defendants,” the complaint says.
A news release on Wednesday from the Bailey & Glasser law firm in Charleston, which filed the lawsuit on the capital city’s behalf, said defendents, which include West Virginia Paving, Southern West Virginia Paving, Southern West Virginia Asphalt, Kelly Paving and others, have “worked together to create a de facto monopoly that allows them to charge inflated prices.”
The release said the practice has cost cities around the state “tens of millions of dollars.”
The lawsuit seeks to end the monopolization and recover the resulting overcharges to cities.
West Virginia Paving also was dishonest about its ownership stake in other companies, and bid against those companies to create a facade of competition, the complaint alleges.
The lawsuit alleges that, in 2012, American Asphalt bid for an asphalt contract with the city of Charleston against West Virginia Paving. American Asphalt listed its owners as Southern West Virginia Asphalt and American Asphalt & Aggregates Inc., and West Virginia Paving listed its owners as Oldcastle Materials.
“In fact, Southern WV Asphalt, American Asphalt & Aggregates Inc. and WV Paving are commonly owned and integrated entities,” the complaint alleges.
The capital city said it chose between two bids submitted by one monopolist pretending to be two companies, and the bids were within one dollar of each other.
Charleston Mayor Danny Jones would not comment on the matter Wednesday.
“The lawsuit speaks for itself,” he said.
The mayors of Parkersburg, Beckley and Bluefield did not return phone calls.
A call to West Virginia Paving’s Dunbar office also was not returned Wednesday.
The case has been assigned to Circuit Court Judge Tod Kaufman.
The lawsuit was filed by Ben Bailey and Michael Hissam, of the Bailey & Glasser.
Reach Elaina Sauber at [email protected], 304-348-3051 or follow @ElainaSauber on Twitter.