Ohio AG files antitrust suit over rock salt
COLUMBUS, Ohio (Legal Newsline) - Ohio Attorney General Mike DeWine filed an antitrust lawsuit on Wednesday against Morton Salt Inc. and Cargill Inc. for alleged actions that resulted in above-market rock salt prices for government entities.
DeWine's lawsuit, filed in Tuscarawas County Common Pleas Court, alleges that the two companies divided the state's rock salt market between themselves, agreeing not to compete with each other and to drive up rock salt prices during the last decade.
"The lawsuit that my office has filed today reflects my commitment to ensuring that Ohioans' tax dollars don't line the pockets of suppliers who conspire with each other to inflate the prices of the products they sell to the state and its municipalities," DeWine said.
"And when the product involved is vital to the safety of every family that gets into a car when the roads are snowy or icy - like rock salt - my concern is even greater."
The lawsuit seeks an injunction against the companies to prevent them from continuing the alleged agreement. In addition, the complaint seeks disgorgement of the allegedly ill-gotten gains, which could be as much as $50 million, representing $500 a day for each year the agreement existed, in addition to court costs and fees.
Cargill denied the allegations in a statement.
"We are extremely disappointed by this lawsuit," said Mark Klein, director of communications for the company.
"The state's own report from 2011, by its Inspector General, doesn't support the allegations. As the Inspector General said in its report, it 'did not find evidence that (Cargill and Morton) communicated on salt bids.'
"That same year, Erie County, for itself and several other entities in Ohio, sued Cargill in Erie County making similar allegations, and that lawsuit has been dismissed with prejudice."
Morton and Cargill allegedly not only agreed not to compete for each other's public entity rock salt accounts, but actively submitted intentionally losing fake bids so that they could conceal their conspiracy. The two companies allegedly excluded other competitors entirely in some parts of the state by misusing the Buy Ohio provisions that were enacted by the state legislature. The Buy Ohio legislation gives a preference to Ohio-based products when provided by at least two bidders in competition.
Morton and Cargill, the only two companies that mine rock salt in Ohio and make it available for sale commercially, allegedly deceived public purchasers into believing they were providing legitimately competitive bids on Ohio-mined salt in approximately the northern two-thirds of the state. In doing so, the companies allegedly locked out any possible other competitors and divided the counties of the state between themselves. The alleged conspiracy of the company was most effective in the north.
DeWine's lawsuit alleges that the reduction of competition in the bidding process led to increased prices paid by public entities when buying rock salt during the conspiracy.