Jul 16, 2013
Pilot Flying J Agrees to Class-Action Lawsuit Settlement
KNOXVILLE, Tenn. -- Pilot Flying J's legal troubles continue in the criminal courts -- with a federal grand jury currently investigating the company's alleged rebate fraud -- but things could be moving toward a resolution on the civil front.
According to a news release from Pilot Flying J, a motion was filed in Arkansas federal court today regarding a proposed class settlement that could resolve the more than 20 lawsuits filed against the company since the April 15 raid on its Knoxville, Tenn., headquarters. National Trucking Financial Reclamation Services, Bruce Taylor, Edis Trucking, Jerry Floyd, Mike Campbell, Paul Otto, Townes Trucking and R&R Transportation are involved in the settlement.
The terms of the settlement include:
A judge has granted preliminary approval to the settlement, according to a report by WBIR-TV. More than 4,000 Pilot Flying J customers fall into the settlement class. Each one will automatically be included in the class settlement unless the companies seek an exclusion, the news report noted.
In a statement released this afternoon, Pilot Flying J CEO Jimmy Haslam commended the individuals who worked hard toward settling the issues. "This is an unfortunate time for our customers and our company, but we remain committed to making things 100 percent right with our customers, to put systems in place to help ensure this does not happen again and to re-earn our customers trust," he said.
The company's legal troubles stem from allegations of fraud around its rebate fuel program. After a two-year investigation, federal officials raided Pilot Flying J's headquarters in mid-April. In the two months since the raid, five former employees have pleaded guilty in connection with the alleged rebate fraud and more than 20 lawsuits have been filed against the company, many of them seeking class-action status.
This week, Las Cruces, N.M.-based Triple D Supply became the 21st company to bring a lawsuit against Pilot Flying J, filing in federal court. It is the first company from New Mexico to sue the retailer, WBIR-TV reported. The news station noted that the federal lawsuits are expected to merge into one large lawsuit when a judicial panel meets July 25.
Since the raid, several Pilot Flying J employees have left the company -- either by their choice or the company's -- and checks have been sent to all customers who had a discrepancy with their rebate discounts, according to an update letter sent to customers by Haslam. In the letter, he said Pilot Flying J's audit team has completed its initial review of manual diesel discounts and sent checks to customers who had a discrepancy, in their favor. In addition, six sales team members have resigned or been terminated.
The letter also reports that Pilot Flying J has hired Scott Nelson as a vice president and brought on Dave Rewers to lead the inside sales department. Nelson was formerly president and CEO of Premier Trailer Leasing Solutions. Rewers was previously group vice president for fleet sales at Fleet One LLC in Nashville.
In addition, the company appointed David Hughes as its new vice president of sales. Hughes, who previously worked for Covenant Transportation, joined Pilot Flying J last year, according to media reports.
Pilot Flying J is still working to fill the role of chief compliance officer. Haslam said it has taken longer than expected due to the importance of getting the right person for the job.
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