Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Connecticut snow removal companies settle state boycott, bid rigging charges, (Jan 16, 2014)

By Jeffrey May, J.D.

The Connecticut Attorney General announced yesterday that three snow removal companies have agreed to settle the state’s allegations that they engaged in boycott and bid rigging activity in violation of the Connecticut Antitrust Act (CAA) and the Connecticut Unfair Trade Practices Act (CUTPA). The settlements resolve an action brought by the Attorney General in Connecticut Superior Court against the three companies and their respective key executives: 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. (State of Connecticut v. H.I. Stone & Son, Inc., Case No. HHD-CV-13-6046436-S).

Under the settlements, the companies have agreed to pay $30,000 each in civil penalties and to provide the Town of Southbury—the town allegedly impacted by the conspiracy—with snow removal services at the original rate prior to the alleged conspiracy for a period of three years that will be applied retroactively beginning with the 2013-2014 winter season.

The suit arose out of alleged misconduct that occurred around the time of an October 2011 Nor’easter. Until that time, the town had not required bids for snow removal work, instead giving work directly to the defendants without any competitive process, according to the state. When the town decided to put its snow removal work out to bid and seek competitive rates, the defendants allegedly colluded and jointly refused to deal with the town and plow for the approaching storm unless they were given a guaranteed minimum contract for a larger portion of that winter season. In the face of this threat, and with the impending storm posing a potential threat to public safety, the town relented, it was alleged.

The Attorney General asserted 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 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.

Attorneys: Michael Cole, Assistant Attorney General and Chief, Antitrust and Government Program Fraud Department, for State of Connecticut. Martin Rader (Pinney Payne, PC) for Stone Construction Company Inc. Thomas G. Parisot (Secor, Cassidy & McPartland, PC) for S&S Asphalt Paving Inc. Ralph Crozier for H.I. Stone & Son Inc.

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

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