BLUEFIELD — A class action lawsuit was filed in Mercer County Circuit Court Wednesday alleging asphalt suppliers have been bilking the City of Bluefield and other entities as well as individuals around the state.

Michael B. Hissam, an attorney with Bailey & Glasser LLP in Charleston, said “substantially identical complaints” were also filed in three other cities in the state Wednesday – Charleston, Beckley and Parkersburg.

“Four actions were filed today,” he said, explaining that in class action suits everyone who can show they have been victimized are included. A total of 30 counties are named in the class action, including Mercer, McDowell and Monroe counties.

In Mercer County, Circuit Court Judge Derek will hear the case, Hissam said.

According to the lawsuit, several state-based paving and asphalt companies were involved and their activities can be traced back to January 2006.

“Defendants are a collection of once vigorous competitors in asphalt production, paving and contracting services, now illegally combined into actual or de facto monopolies in at least thirty West Virginia counties,” the suit says. “Defendants have established and abused their market power illegally and have done so through a common scheme that has harmed competition in each of the geographic areas identified in this complaint.”

Calling it a “brazen statewide monopolization scheme,” the lawsuit says the defendants “illegally inflated the cost of asphalt, the primary commodity used in building and repairing roads, parking lots, driveways, recreation courts, and airport runways … and other miscellaneous products such as roofing.”

The scheme unlawfully forced customers to pay at least 40 percent more for asphalt than they should have paid, the suit alleges, “illegally extracting millions of dollars in overpayments from the Class (all plaintiffs in the suit).”

The companies named as defendants include West Virginia Paving Inc., Southern West Virgina Paving, Inc., Kelly Paving, Inc., Camden Materials, LLC, American Asphalt & Aggregate, Inc., American Asphalt of West Virginia, LLC, and Blacktop Industries and Equipment.

“Regrettably, competition in West Virginia’s asphalt industry is virtually non-existent,” the lawsuit says. “In the past years, millions of West Virginia dollars have been wasted on overpayment for paving due to inflated asphalt costs—dollars that by intent and design landed in the defendants’ pockets. Defendants have engaged in an ongoing series of illegal and covert anticompetitive combinations, acquisitions, agreements, and practices.”

Through their activities, the suit says the defendants have the ability to control asphalt prices and exclude their few competitors throughout state.

“Defendants have erected substantial barriers to those who might consider entering the asphalt industry,” the suit alleges. “They have choked off the supply of aggregate and asphalt to competing asphalt plants and paving companies; threatened new entrants in these markets with reprisals unless they ceased operations or sold to Defendants; and engaged in other predatory conduct that make it economically irrational for anyone to consider launching or expanding asphalt production or paving businesses in large swaths of this state.”

The suit also alleges that entities affiliated with the defendants submitted “bids” against each other “giving the appearance of competition and even signing documents under penalty of perjury certifying that the bids were made without connection to any other entities submitting bids.”

According to the lawsuit, the defendants controlled both the supply of asphalt and ownership of paving contractors that apply the asphalt, keeping rival paving companies from bidding against them.

“As with the asphalt plants, many of those paving companies were acquired as soon as they began successfully bidding against Defendants for asphalt paving contracts,” the suit alleges. “And as with the asphalt plants, paving companies were inexplicably shuttered despite huge sums Defendants paid to acquire them. Defendants were thus also able to extinguish emerging competition for paving jobs” and keep prices high.

“Defendants purposefully took actions to maintain and enhance their market dominance through a host of predatory actions and bullying,” according to the complaint filed.

Hissam said any the specific of amount of damages that will be sought will depend on information gathered during the discovery process.

“We will obtain that information as the lawsuit moves forward,” he said, adding that much of those details will come from the business records of the defendants.

Hissam said a jury trial has been requested.

He also said he was not yet aware of any criminal charges that may have been filed.

The lawsuit says that “all West Virginia citizens at the time of the filing of this action, including individuals, municipal corporations, and businesses, who purchased products or services containing or utilizing asphalt manufactured or sold by the Defendants from January 1, 2006 to the present” are included in the lawsuit.

 

Contact Charles Boothe at cboothe@bdtonline.com.

 

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