A federal judge in Little Rock yesterday approved an $84.9- million settlement of the class-action suit brought against Pilot Flying J by trucking customers that alleged the nation’s largest diesel retailer had defrauded them through a diesel-rebate scheme.
Judge James Moody of the U.S. District Court for the Eastern District of Arkansas signed off on the deal following a brief hearing, The Tennessean reported online.
Per that news story, the agreement settles most-- but not all-- of the lawsuits that were filed against the company in the wake of an April 15th federal law-enforcement raid on Pilot Flying J’s headquarters in Knoxville.by federal agents on Pilot’s Knoxville headquarters on April 15.
Afterwards, details of the alleged scheme by the truckstop operator’s sales executives to secretly cut fuel-purchase rebates that were owed to trucking customers were laid out in a 120-pg FBI affidavit.
The nearly $85-million payout to the customers in the class action includes $56.5 million to directly reimburse customers for the fuel rebates and discounts that Pilot shorted them on, reported The Plain Dealer, as well as $9.75 million in interest on the money due (at 6% interest) along with $14 million in attorney fees and $4.5 million in audit costs.
The settlement was reached with 5,500 customers of the truckstop operator. The Associated Press (AP) quoted “lawyers on both sides” as saying that “no one among the 5,500 companies agreeing to the settlement filed an objection and that only about 1% of affected companies opted out of the agreement so they could file their own lawsuits.”
What’s more, the approval of the class-action deal has no bearing on the ongoing federal fraud investigation of Pilot Flying J-- which has resulted thus far in seven employees having entered guilty pleas.
On the other hand, AP has reported that Aubrey Harwell, Jr., the Nashville-based attorney for Jimmy Haslam, CEO of Pilot Flying J as well as the owner of the Cleveland Browns football club, has affirmed that Haslam had no knowledge of the scheme.
“This is an unfortunate time for our customers and our company, but we remain committed to making things 100% right with our customers, to put systems in place to help ensure this does not happen again, and to re-earn our customers trust,” Haslam said in a statement about the class-action claims issued by his firm back in July.
The co-owner of Pilot Flying J is Haslam's brother, Gov. Bill Haslam (R-TN). Gov. Haslam has stated he isn't involved with the firm’s operations.
With $31 billion in sales, per Forbes, Pilot Flying J is one of the nation's largest private companies.
Pilot, founded by Haslam’s father, James Haslam Jr. in 1958, merged with Flying J in 2010. The company operates some 600 retail locations in 43 states as well as in Canada.