AG: Settlement Reached in Southbury Bid-Rigging Conspiracy

The following is a press release from the CT State Attorney General:

Connecticut Attorney General George Jepsen today announced that settlements have been reached with three Southbury companies over allegations of illegal boycott and bid-rigging involving snow removal and snowplowing services.  The settlements resolve a lawsuit brought by the Attorney General in Connecticut Superior Court alleging that the three Southbury companies had violated the Connecticut Antitrust Act and the Connecticut Unfair Trade Practices Act. 

The three Southbury contractors – H.I. Stone & Son, Inc., S&S Asphalt Paving, Inc. and Stone Construction Company, Inc. – and their respective key executives – Harry H. (“Chuck”) Stone, Kevin W. Starchak and George H. Stone, Jr. – have agreed to pay civil penalties and make their trucks available to the town of Southbury at the original pre-conspiracy snow plow rate for the next three years. Each company has also agreed to adopt an antirust compliance program to help ensure that they do not violate the antitrust laws again in the future.

“Connecticut taxpayers are not only entitled to but deserve the benefits of a free and open market,” said Attorney General Jepsen. “When companies conspire together to create group boycotts and bid-rigging schemes, they illegally eliminate competition and raise prices for consumers. These settlements will provide relief to the town of Southbury through lower rates for snowplowing services, while at the same time ensuring that illegal business activities such as these will not be tolerated.”

“I am glad to see the resolution of this lawsuit,” said Southbury First Selectman Ed Edelson. “The three contracting companies have been a vital part of Southbury through their financial involvement and volunteerism of their employees for many years. We look forward to our continuing relationship with these companies and their principals through our improved procurement process. They have each provided excellent service throughout the years in road building and maintenance.”

 Under the proposed settlement agreement, H.I. Stone & Son, Inc., S&S Asphalt Paving, Inc. and Stone Construction Company, Inc. will pay the state $30,000 each in civil penalties. The three companies will also provide the town of Southbury with snow removal services at the original rate prior to the conspiracy for a period of three years that will be applied retroactively beginning with the 2013-2014 winter season.

In addition to paying civil penalties and providing reduced-rate services to the town of Southbury, each company will establish an antitrust and competition training program that will be provided to the Office of Attorney General for its review on an annual basis.

According to the complaint, when the defendants learned for the first time in October 2011 that the town had finally 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 immediately began colluding and jointly refused to deal with the town and plow for the fast approaching nor’easter 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. 

The town later put out a bid for the remainder of its snow removal work for the 2011-to-2012 winter season. As alleged in the complaint, the defendants again began immediately colluding and entered into a conspiracy with one another designed to eliminate competition amongst them and substantially raise the prices they received for snowplowing services from the town. 

Attorney General Jepsen is the co-chair of the Antitrust Committee for the National Association of Attorneys General.

Assistant Attorneys General Joseph Nielsen and Antonia Conti, Paralegal Holly MacDonald and Assistant Attorney General Michael Cole, chief of the Antitrust and Government Program Fraud Department, are assisting the Attorney General in this matter.

 Anyone with information concerning bid rigging, price-fixing or anticompetitive conduct should contact the Attorney General’s Antitrust and Government Program Fraud Department at (860) 808-5354 or email at: ag.fraud@ct.gov