Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Connecticut alleges snow removal companies engaged in boycott, bid rigging, (Nov 4, 2013)

By Peter Reap, J.D., LL.M.

Connecticut Attorney General George Jepsen has filed a lawsuit in the Connecticut Superior Court, accusing three snow removal companies and a key executive at each of the companies with engaging in an unlawful group boycott and bid rigging in violation of the Connecticut Antitrust Act (CAA). In addition, the defendants are accused of violating the Connecticut Unfair Trade Practices Act (CUTPA) (State of Connecticut v. H.I. Stone & Son, Inc., Case No. HHD-CV-13-6046436-S, filed October 22, 2013).

The lawsuit seeks an injunction against the defendants, H.I. Stone & Son Inc. and its Vice President Harry H. Stone III; S&S Asphalt Paving Inc. and its President Kevin W. Starchak; and Stone Construction Company Inc. and its President George H. Stone, Jr., enjoining them from any acts that violate the CAA and/or the CUTPA. It requests civil penalties of up to $1 million per corporate defendant; up to $100,000 per individual defendant for each violation of the CAA; and up to $5,000 for each willful violation of the CUTPA. In addition, an order requiring the defendants to pay restitution; to disgorge all revenue and profits gained through the complained of unfair and/or deceptive acts or practices; and to pay reasonable attorney fees to the state, is requested.

According to the complaint, when, for the first time in October 2011, the Town of Southbury decided to put its snow removal work out to bid and seek competitive rates instead of merely offering it to the same companies without competition, the defendants, angry that they would be forced to compete for this business and knowing that an impending “nor’easter” storm gave them a unique form of leverage and opportunity, immediately began colluding and jointly refused to deal with the town. The defendants refused to plow for the fast approaching storm unless they were given a guaranteed minimum contract that would potentially provide them with additional compensation, the complaint continues. Faced with this group boycott and the threatening storm, the town relented and provided the defendants with the contract they demanded, a contract that went beyond anything the defendants had received from Southbury in the past.

When the town subsequently set out to put the remainder of its snow removal work for the 2011-2012 season out to bid, the suit charges that the defendants again began colluding and entered into a conspiracy with one another to eliminate competition and substantially raise the prices for their snowplowing services for the Town.

The complaint alleges that the defendants’ actions, in jointly refusing to provide snowplowing services to the town unless they received a longer-term guaranteed minimum for winter snowplowing work, constituted a group boycott in violation of the CAA. The alleged agreement entered into by the defendants regarding what prices they would charge for their services previously required by the town constituted bid rigging in violation of the CAA. Finally, the boycott, the output restriction agreement, and the conspiracy to rig bids constituted unfair methods of competition in violation of the CUTPA, according to the complaint.

This is Case No. HHD-CV-13-6046436-S.

Companies: H.I. Stone & Son Inc.; S&S Asphalt Paving Inc.; Stone Construction Company Inc.

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