Just seven months after federal investigators publicly announced a criminal investigation into Pilot Flying J’s fuel rebate program stemming back to 2005, a federal judge has approved a nearly $85 million class action settlement.
On Monday, Nov. 25, U.S. District Court Judge James M. Moody approved the settlement in which Pilot will pay more than $56.5 million to trucking companies who had a rebate or discount program with Pilot from Jan. 1, 2005, to July 15, 2013. Pilot will pay another $9.75 million in interest, which is 6 percent. More than $18.6 million will go toward attorney’s fees and to pay a court-approved accounting firm, Horne LLP, to review Pilot’s internal audit department’s procedures and protocols used to “calculate settlement payments, and to conduct a statistical sampling of accounts to verify the accuracy of internal audit’s conclusions.”
Of the approximately 5,500 members of the class, only around 60 trucking companies opted out of the class settlement to possibly pursue their own legal action against Pilot.
Since the Federal Bureau of Investigation and the Internal Revenue Service raided Pilot’s corporate headquarters on April 15, seven former Pilot sales employees have pleaded guilty to their roles in the alleged scam to defraud trucking companies out of rebates they were owed as part of agreements to purchase a certain volume of fuel from Pilot each month. Pilot CEO James “Jimmy” Haslam III, also owner of the Cleveland Browns, has denied any involvement in the alleged fuel rebate scam.
More than 30 lawsuits have been filed in state and federal court against Pilot since the criminal investigation was launched into the nation’s largest truck stop chain.
“The settlement is fair in light of the substantial risk and burden on the plaintiffs had they been forced to litigate the case,” said Pilot in a statement about the court-approved settlement.
At the center of the final settlement is one company, National Trucking Financial Reclamation Services LLC of Little Rock, Ark. The company was incorporated just two days before filing its class action complaint in federal court in Little Rock.
Lane Kidd, president of the Arkansas Trucking Association, formed National Trucking on April 22, just days after the federal investigation into Pilot’s fuel rebate program practices was announced.
Kidd and the law firm he hired jumped out with the first class-action lawsuit on April 24. Even though National Trucking is not a trucking company and is not owed money from Pilot, he says the companies he represents were owed money from Pilot.
Kidd said the company he formed operates much like a collections agency, designed to help his trucking members receive the money he says they are owed. He has not disclosed the names of the carriers he represents, but said they are Arkansas-based trucking companies and are member companies of the Arkansas Trucking Association.
In a statement to Land Line on Monday, Nov. 25, about the final settlement, Kidd said the companies he is representing “wish to remain anonymous.”
“I do not have the final audited numbers, but collectively they were owed several thousands of dollars,” Kidd said.
Kidd told Land Line in early November that “he has not received and will not receive a dime” from his involvement in the settlement he helped orchestrate.
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