Pilot Flying J rebate lawsuit in Alabama heads back to federal court

By Greg Grisolano, Land Line associate editor | Friday, January 06, 2017

A recent ruling by a federal appeals court means one of two lawsuits filed by a trucking company against truck stop giant Pilot Flying J may be returning to federal court.

The 11th Circuit Court of Appeals ruled in November 2016 on the civil suit brought by Wright Transportation against Pilot alleging the company defrauded them out of monies owed to the trucking company based on the truck stop chain’s diesel fuel rebate program. According to the ruling, the lawsuit should be tried in federal court rather than at state court.

The appellate court’s ruling is the latest in a long line of legal maneuvers that began in April 2013, when federal agents raided Pilot’s corporate headquarters in Knoxville, Tenn. Eight former executives and high-ranking employees have been charged in connection with a fraud scheme, and the company agreed to pay out more than $85 million in restitution to more than 5,000 customers who had partaken in the company’s rebate plan. The company also agreed to pay $92 million in fines and accept responsibility for the criminal conduct of its employees.  Ten former employees have pleaded guilty and agreed to cooperate with prosecutors.

Wright Transportation was one of a handful of trucking companies to opt out of the restitution agreement and proceeded to sue Pilot in civil court. Another case is ongoing against the truck stop chain in Ohio state court. Wright’s original lawsuit was filed at the federal level and sought class action status. While Wright’s lawsuit was pending in Alabama federal court, another class action filed in Arkansas reached a court-approved settlement, which Wright Transportation and six other companies opted out of. Once the class action question was resolved by the Arkansas filing, Wright sought to dismiss its case out of federal court to refile at the state level. The appellate court’s ruling reverses that decision and remands the case to federal court.

Stephen Tunstall, the attorney representing Wright Transportation, declined to comment on the court’s ruling, citing an appeal filed on behalf of his client that seeks a full-panel review from the 11th Circuit.

Steve Brody, attorney for Pilot Flying J, said the court’s ruling was “a positive step toward a favorable resolution of the claims brought by Wright Transportation.”

“We hope the 11th Circuit decision dispels that unrealistic belief by making it clear that Wright’s case belongs in federal court, where it is subject to the court’s prior rulings, including an order dismissing the majority of Wright’s frivolous claims,” Brody said in a statement emailed to Land Line.

In addition to Pilot Corp. and Pilot Travel Centers LLC, named defendants in the Wright lawsuit include Pilot CEO Jimmy Haslam, former executives Mark Hazelwood, and John Freeman, and former director of sales Brian Mosher. Hazelwood and Freeman were indicted in February 2016 on criminal charges of conspiracy related to the rebate scheme. Mosher is one of the 10 former employees to have already pleaded guilty.

The suit alleges that Pilot specifically targeted smaller companies only to cook the books and skim some of the discount moneys for itself to pay lavish bonuses to its officers, managers and employees, including Haslam. Haslam has not been charged in connection with the criminal case and has repeatedly denied any knowledge of the scheme.

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