The state said in the lawsuit that Morton and Cargill illegally carved up market territory by colluding to submit sham bids to the Ohio Department of Transportation — an allegation that the companies denied.
“In essence, what we alleged was that they divided the state up,” DeWine said. “We believed it was a classic case of anti-competitive conduct where they would decide who would win which county and who would lose which county.”
“From the time the suit was filed in 2012, we have emphatically denied the allegations,” said Richard Maxfield, president of Cargill Deicing Technology,in a written statement. “We have always acted ethically and in line with our guiding principles.”
Maxfield said agreeing to the settlement allowed the company to avoid further litigation costs.
Morton Salt said in its statement: “In Ohio, and every state in which we do business, Morton Salt sets its deicing salt prices independently, competitively and in full compliance with the law, under the bidding procedures established by salt purchasers.”
Of the $11.5 million in settlement money, $6.8 million will be returned to local governments according to how much road salt they bought between 2008 and 2010, $1.7 million will go to the Ohio Department of Transportation and $174,000 to the Ohio Turnpike Commission. The attorney general’s anti-trust division will receive $2.7 million to be used in future cases.
The case settled shortly before the parties were scheduled to go to trial in Tuscarawas County Common Pleas Court.
DeWine said while he believed the state would win at trial, there is always a risk that the state could lose or a decision could be appealed and dragged on for years. As it is, the state investigation into rock salt pricing began in 2008 and the lawsuit was filed in 2012.
Originally, Ohio was seeking recovery for price-fixing damages for a decade but the court limited the time frame to 2008 to 2010. The state’s expert estimated that public entities overpaid some $70 million for road salt statewide over a decade.
DeWine’s team included company strategy documents that indicate the two vendors cooperated. “Bid high so Morton can get what they did last year and maybe some more,” the lawsuit quotes an internal Cargill document.
ODOT puts out bids for road salt supplies, but quantities and prices are separately bid for each county. Beginning in the late 1990s, ODOT gave a bid preference to salt mined in Ohio that effectively locked out vendors that produced out-of-state salt. Since 1997, Morton and Cargill have been the only two companies mining and selling commercial rock salt in Ohio.
The state of Ohio owns two salt mines — one in Fairport Harbor, the other near Cleveland. Each are in 99-year leases with Cargill and Morton that were signed in 1957 and 1959.
ODOT Director Jerry Wray said the department changed bidding procedures and five suppliers were used last winter.
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