Paving antitrust case settled in West Virginia

The $101.35 million settlement with 11 asphalt and paving companies is the largest, single-state antitrust settlement in West Virginia’s history. Photo: bamlou /DigitalVision Vectors/Getty Images

West Virginia state officials and local governments reached a $101.35 million settlement with 11 asphalt and paving companies – the largest, single-state antitrust settlement in West Virginia’s history.

According to state officials, the settlement resolves allegations that West Virginia Paving, Kelly Paving, American Asphalt & Aggregate and eight related companies conspired to monopolize the state-approved asphalt and paving market, thus reducing competition and maximizing profits at taxpayer expense.

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

“This achievement means many more roads will be paved,” says Patrick Morrisey, attorney general of West Virginia. “I will not tolerate monopolization on my watch.

“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,” Morrisey adds. “We can never afford to allow an unlawful monopoly to victimize West Virginia and maximize its profits on the backs of state taxpayers, especially when every dollar is needed to pave our roads and compete effectively with other states for business and tourism,” he continued.”

About the lawsuit

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 and other defendants as compared to parts of the state with robust competition.

The lawsuit argued high prices strained an already-tight highways budget, forcing the state to delay construction projects – some indefinitely – causing immeasurable economic damage and unconscionable 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. This 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.

Additional details

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 West Virginia 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– 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, Oldcastle Materials, Southern West Virginia Paving, Southern West Virginia Asphalt, American Asphalt of West Virginia, and Blacktop Industries & Equipment Co.