AG Jepsen Initiates Antitrust Lawsuit over Alleged Group Boycott,
Bid Rigging in Southbury Snow Removal
Attorney General George Jepsen has initiated an antitrust lawsuit against three companies and their key executives over allegations that they engaged in an illegal boycott and bid-rigging conspiracy involving snow removal and snowplowing services for the town of Southbury. At the behest of Department of Consumer Protection Commissioner William M. Rubenstein, the complaint also alleges violation of the Connecticut Unfair Trade Practices Act.
The complaint, to be filed in Superior Court, alleges that the three competitors – 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. – conspired to engage in an illegal group boycott and a subsequent bid-rigging conspiracy in October and November 2011 that violated both the Connecticut Antitrust Act and the Connecticut Unfair Trade Practices Act.
“Connecticut taxpayers deserve the benefits of access to free and open markets,” said Attorney General Jepsen. “Group boycotts and bid-rigging schemes are illegal because they eliminate competition and raise prices to consumers. They also disadvantage the law-abiding businesses that seek only the opportunity to compete on a level playing field. This complaint alleges that the defendants put the town of Southbury in a no-win situation: Agree to our demand to award us the work on our terms, or face the likelihood that a significant swath of town roads would be impassable.”
The alleged conduct occurred in the days leading to, and in the wake of, the devastating October Nor’easter that hit Connecticut in 2011. According to the complaint, the town of Southbury did not require bids for snow removal work for many years, instead giving work directly to the defendants without any competitive process.
The complaint alleges that when, for the first time in October 2011, the town decided to put its snow removal work out to bid and seek competitive rates, the defendants began immediately colluding and jointly refused to plow the town’s roads unless they were given a guaranteed minimum contract that would provide them with additional compensation in exchange for plowing during the October Nor’easter. The complaint alleges that the town – faced with this group boycott and in light of the significant threat to public safety posed by the approaching storm – had no choice but to provide the defendants with the contract they demanded.
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 ultimately 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.
The state’s suit seeks restitution, civil penalties and injunctive and equitable relief to prevent the alleged illegal business practices from continuing.
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.
Jaclyn M. Falkowski