Eleven asphalt and paving companies accused of establishing a monopoly on road paving projects in West Virginia have agreed to pay more than $100 million to the government in what’s being called the largest antitrust settlement ever paid to the state.
According to the settlement, announced by government officials Friday, West Virginia Paving Inc., Kelly Paving Inc., American Asphalt & Aggregate Inc. and eight related companies agreed to settle claims brought against them by the state Department of Transportation and six local governments — Beckley, Bluefield, Charleston, Huntington, Parkersburg and Kanawha County.
The agreement includes $101.35 million worth of cash and credits, along with a mix of “non-monetary terms to restore competition” among paving companies, according to a news release from Attorney General Patrick Morrisey, who announced the settlement Friday morning with Gov. Jim Justice and Department of Transportation Secretary Byrd White.
Morrisey said the settlement is the largest single-state antitrust settlement in West Virginia’s history.
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, according to the news release.
West Virginia Paving also agreed to provide the state with an additional $71 million in credits that can be applied to already completed but unpaid road projects and future work over the next seven years, according to the news release.
The nonmonetary terms include a mix of price restrictions, the elimination of a noncompete clause and required advance notice for future acquisitions.
“The West Virginia Division of Highways is responsible for roughly 36,000 miles of roadway. Every dollar we can get will help us continue to repair and pave all of our hills and hollers,” White said Friday.
In 2016, four cities, including Charleston, filed antitrust lawsuits against West Virginia Paving. They said the company illegally created a monopoly to choke out competition and inflate prices.
In those lawsuits, cities claimed West Virginia Paving acquired at least 15 asphalt plants that previously competed against each other, after those plants offered more-competitive prices and began taking asphalt sales from the defendants, the Gazette-Mail reported at the time. West Virginia Paving allegedly shut down competing asphalt plants after acquiring them.
Morrisey declined to comment on the lawsuits when they were filed in October 2016, but he filed a similar lawsuit in January 2017 on behalf of the Department of Transportation alleging that acquisitions or noncompete agreements were used to unlawfully eliminate competing companies and push asphalt prices higher in areas controlled by West Virginia Paving, its parent company and other defendants.
West Virginia Paving denied any wrongdoing throughout the court proceedings, and the settlement did not require them to admit to any wrongdoing, according to the attorney general’s news release.
In 2018, Kanawha Circuit Judge Tod Kaufman dismissed the local governments’ lawsuit, and those governments later unsuccessfully appealed his ruling to the West Virginia Supreme Court.
In a statement released Friday, a representative for Kelly Paving said the company settled the lawsuit with the Attorney General’s Office because the expense of the lawsuit had become too burdensome.
“Ultimately, Kelly Paving chose to settle the case so that it could continue to be among the most efficient, most respected and most trusted asphalt contractors in the State of West Virginia,” according to the statement.
In addition to West Virginia Paving, parent company CRH plc, Kelly Paving Inc., and American Asphalt & Aggregate, other companies involved in the settlement are Camden Materials, 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 Co.