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A federal judge has preliminary approved a class action settlement between truck stop chain Pilot Flying J and some of its trucking customers. If granted final approval, the Pilot Flying J settlement will resolve allegations that the truck stop chain defrauded trucking customers through a diesel rebate program.
The settlement will resolve a class action lawsuit (National Trucking Financial Reclamation Services, LLC et al. v. Pilot Corporation et al.) that claims Pilot CEO James A. Haslam III implemented a “nationwide scheme to defraud and cheat” its trucking customers. While Haslam has denied having knowledge about any wrongdoing, numerous class action lawsuits accuse him of giving his “blessing” to the scheme designed to boost company profits. At least 20 class action lawsuits have been filed against Pilot since the Federal Bureau of Investigation (FBI) released an affidavit pertaining to Pilot’s systematic reduction in rebates.
According to the terms of the Pilot Flying J class action settlement, Pilot will be required to have auditors examine its accounts and pay any money owed to Class Members plus 6-percent interest. Pilot will also be responsible for legal costs. U.S. District Judge James Moody gave preliminary approval to the class action settlement on July 16, 2013.
The Pilot Flying J class action settlement will allow for a criminal investigation into allegations that some Pilot staff members promised volume discounts by issuing rebates to trucking companies, then failed to pay them all the money they were owed. So far, five Pilot employees have pleaded guilty and have agreed to cooperate with federal prosecutors.
The FBI and Internal Revenue Service (IRS) raided Pilot’s headquarters on April 15 after the federal agencies received tips about the alleged cheating. After the federal criminal investigation into Pilot’s rebate program became public in April, Pilot has conducted its own audits and offered payments to companies that were short-changed. Pilot spokesman Tom Ingram said that even trucking companies who aren’t involved in the litigation will be paid interest for the amount they were short-changed.
While Ingram declined to mention specific dollar amounts or the number of affected trucking customers, he claims that the affected companies represent only a small fraction of Pilot’s customers. Pilot has about 5,000 trucking customers.
Notices of the Pilot Flying J class action settlement will be mailed to Class Members beginning August 6, 2013. These Class Members include all individuals, businesses, and other entities in the United States who purchased over-the-road diesel fuel for commercial use in Class 7 or Class 8 vehicles from Pilot Flying J under a cost-plus and/or retail-minus rebate or discount program, from January 1, 2005 to July 15, 2013. The class action settlement does not involve retail discounts for payments made by cash, check, or major credit card at the point of sale.
The settlement does not have a claim submission process. Instead, Class Members who are eligible to receive compensation will be mailed settlement checks beginning approximately 30 days after the Court grants final approval to the settlement. A Final Fairness Hearing is scheduled for November 25, 2013.
The amount of this payment will be calculated as follows:
- + Unpaid rebates and discounts from January 1, 2005 through July 15, 2013 (the “Principal”)
- + 6% simple interest per year or fraction of a year for the period when the Principal was unpaid
- – Any payment previously made by Pilot Flying J as part of its Voluntary Payment Program
The deadline to exclude yourself or object to the Pilot Flying J class action lawsuit settlement is October 15, 2013.
More information about the Pilot Flying J Rebate Class Action Lawsuit Settlement can be found at www.DieselRebateSettlement.com.
The case is National Trucking Financial Reclamation Services, LLC et al. v. Pilot Corporation et al., Case No. 4:13-cv-00250-JMM, U.S. District Court for the Eastern District of Arkansas.
UPDATED: July 26th, 2013
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