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Ohio AG reaches $11.5M settlement with rock-salt companies
By Marc Kovac
and Peter H. MILLIKEN
COLUMBUS
The state has reached a settlement with two companies it alleged conspired to fix road-salt prices.
Ohio Attorney General Mike DeWine announced the deal Wednesday, saying Cargill Inc. and Morton Salt Inc. agreed to pay $11.5 million to the state. Cargill will pay $7.7 million and Morton will pay $3.8 million.
Neither company admitted wrongdoing in the settlement.
Of the total, $6.8 million will be distributed to city, county, township and local offices, based on the amount of salt purchased by each from 2008 to 2010.
Payments are expected to begin later this year, after the attorney general contacts and gathers information from those affected. A preliminary list covered offices in all 88 counties, including most major cities.
“[That sum] divided up amongst all 88 counties – that’s not a lot of money,” said Mahoning County Engineer Patrick Ginnetti.
If that money were divided evenly among Ohio’s 88 counties, 1,300 townships, 250 cities and 600 to 700 villages, “You’re looking at $5,000 per agency,” Ginnetti noted.
At $146.18 per ton, $5,000 would only buy 34 tons of road salt for his office, Ginnetti said. “That’s not really going to help a lot,” he added.
The Attorney General’s Office has not yet determined what formula it will use to allocate the settlement money, said Dan Tierney, an office spokesman.
Youngstown would likely get more money than a small town near Cincinnati because Youngstown bought more salt for harsher Northeast Ohio winters, he observed.
“What we don’t want to do is send people checks for $14. We’re going to set a floor, so there’s a minimum benefit,” Tierney explained.
During the period covered by the settlement, almost all communities in Mahoning County, and many in Trumbull and Columbiana counties, likely bought salt from Cargill or Morton, according to an AG’s office list.
That list included all three county engineer’s offices, the cities of Youngstown, Niles and Warren, Youngstown State and Kent State universities and Mill Creek MetroParks.
Bert Dawson, Columbiana County engineer, said he was the first to formally complain to DeWine about the duopoly of salt in Ohio; and the state investigation was launched as a result of his complaint.
“The price of the salt was ridiculous, and I think it’s still ridiculous,” Dawson said, adding that his office is now paying $89.62 per ton.
Mahoning County’s price is $68 per ton, and Cuyahoga County, where one of the salt mines is located, is paying $80 a ton, Dawson said, adding he doesn’t understand the disparity in salt prices.
The attorney general filed a civil suit in Tuscarawas County Common Pleas Court in 2012, alleging the two companies divvied up the state’s rock-salt market, agreeing not to compete against each other, and driving up prices in the process. The scheme, the lawsuit alleged, cost state and local governments more than $70 million.
The case was set to go to trial last month, but the state and the companies reached the settlement, dismissing the case in the process.
“We were prepared to go to trial, but as is the case in any civil suit, both sides have to make calculations, and we understood that there was a risk,” DeWine said.
He added, “Even if we had won ... the case would have been appealed, it would have gone on for years, and the local government units would not have received any money.”
The settlement also allows for $1.7 million to go the Ohio Department of Transportation, the largest single purchaser of rock salt in the state. The settlement allows for all or a portion of that payment to be made in rock salt to replenish ODOT’s supplies.
The Ohio Turnpike will get about $174,000. The remainder will go to the state’s anti-trust fund.
“From the time the suit was filed in 2012, we have emphatically denied the allegations,” Richard Maxfield, president of Cargill Deicing Technology, said in a statement Wednesday. “We have always acted ethically and in line with our guiding principles. The Ohio attorney general accepts that there is no admission of guilt.”
Morton added in a separate statement: “If the Ohio attorney general’s case had proceeded to trial, Morton Salt is confident that the jury would have returned a verdict confirming that Morton Salt did not engage in the conduct alleged in the attorney general’s complaint.
“However, we were willing to settle the case because the expected future legal fees to continue with the trial and inevitable appeals were estimated to be equal to the cost of the settlement.”