Newspaper article Charleston Gazette Mail

WEST VIRGINIA PAVING LAWSUIT ; Official: DOH Allegations a `Sucker Punch'; Asphalt Rules, Transportation Costs among Reasons for Price Hikes, President Says

Newspaper article Charleston Gazette Mail

WEST VIRGINIA PAVING LAWSUIT ; Official: DOH Allegations a `Sucker Punch'; Asphalt Rules, Transportation Costs among Reasons for Price Hikes, President Says

Article excerpt

From a stagnant Road Fund to restrictions on recycled asphalt, the president of West Virginia Paving has myriad reasons for what's driven the cost of paving projects upward in the state over recent years. Bob Brookover, president of West Virginia Paving, which is embroiled in an antitrust lawsuit filed by the West Virginia Division of Highways and several cities, said the company was "sucker punched by the DOH's filing in October.

The lawsuit alleges West Virginia Paving, Southern West Virginia Paving, Southern West Virginia Asphalt and other subsidiaries have engaged in anti-competitive practices that have essentially created a monopoly in the state's asphalt and paving industry.

Last week, the defendants filed a 62-page response, in which it denies the vast majority of the claims made in the initial complaint. Charleston, Beckley, Bluefield and Parkersburg initially filed against the companies. The DOH, the city of Huntington and the Kanawha County Commission joined in the case shortly after.

Charleston law firm Bailey & Glasser is representing the DOH and the other plaintiffs in the case. Attorney Mike Hissam, of Bailey & Glasser, commented on the defendants' response last week.

"By nature of their response, it's clear we're moving toward discovery, Hissam said. "We look forward to getting detailed information from the defendants, getting sworn testimony and proving our case in court.

Hissam also told the Gazette-Mail on Friday Bailey & Glasser has been contacted by criminal prosecutors from the U.S. Department of Justice with regard to the case.

"It's clear we aren't the only ones eager to get to the bottom of the defendants' conduct, Hissam said.

One of the most disputed allegations in the lawsuit is West Virginia Paving and its sister companies, after acquiring smaller companies that formerly competed with them, inflated the cost of asphalt and paving projects by up to 40 percent.

"There would be plenty of contractors here if we were 40 percent higher than what we should be, Brookover said during an interview with the Gazette-Mail last week.

Brookover suggested the DOH would not have awarded projects to West Virginia Paving if the prices were egregiously inflated.

"There's a bid process out there, and we go through the requirements and specifications to put a bid together and we submit it to the [Division] of Highways, he said. "If they check the box and the cost is good, they award the project. [If] we're supposed to be 40 percent over, why are they awarding [us] the projects?

He added, "I would think if I was 40 percent over on a bid, somebody would reject the bid, come to the company and say what's driving these costs?'

Former U.S. Attorney Booth Goodwin is representing West Virginia Paving, Southern West Virginia Paving, Southern West Virginia Asphalt and Camden Materials.

He and Brookover described the subsidiaries as "sister companies to West Virginia Paving.

Oldcastle Materials, an Ireland-based global corporation, is the parent company of West Virginia Paving and its subsidiaries.

The lawsuits allege the defendants illegally established market dominance through practices such as buying out smaller companies and then shuttering their asphalt plants, requiring other companies to sign non-compete agreements and threatening to cut off supply of aggregate and liquid asphalt to competitors.

Brookover said he didn't know whether West Virginia Paving had ever required other companies to sign non-compete agreements.

"I'm not into the nuts and bolts of that, he said.

He also said the company has language in its employee code of conduct on anti-trust compliance policies.

West Virginia Paving refused to give the Gazette-Mail a copy of its code of conduct, but said employees "receive yearly training on many topics including best business practices. They know what is appropriate and what is not.

Cost drivers

In a statement, Brookover said there are several factors that go into the cost of projects that make it difficult to compare costs between West Virginia and other states. …

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