What Did Pilot Flying J Promise?

Judge requests more information in truckstop company's bid for dismissal of lawsuits

Pilot Flying J Haslam Cleveland Browns fraud (CSP Daily News / Convenience Stores / Gas Stations / Truckstops)

COVINGTON, Ky. -- A federal judge said on January 9 that he wants more information about business arrangements between the truckstop company owned by Cleveland Browns owner Jimmy Haslam and Tennessee Governor Bill Haslam and several trucking companies that claim that Pilot Flying J cheated them out of rebates for diesel fuel, reported the Associated Press.

U.S. District Judge Amul Thapar asked attorneys to provide more details about what Pilot Flying J had promised the trucking companies. The request came as attorneys wrangled over the company's motion asking the judge to dismiss the lawsuits.

The Haslams were not mentioned during the two-hour hearing, which drew a dozen attorneys to the Kentucky courtroom, said the news agency.

Leonard Leicht, an attorney for National Retail Transportation and Keystone Freight, said afterward that the additional information that the judge requested would shed more light on the scope of the scheme.

"We look forward to Pilot actually coming clean and giving us the exact information, which will enable us to calculate damages based on the actual cost of the fuel," Leicht told AP.

Pilot Flying J attorney Glenn Kurtz declined to comment afterward, said the report.

During the hearing, he disputed plaintiffs' claims that Pilot Flying J had committed fraud. Arguments by the trucking companies that they did not receive what they were entitled to under their contracts with Pilot Flying J are "not enough" to justify the fraud claims, Kurtz said.

The trucking companies' allegations against Pilot include breach of contract and fraudulent misrepresentation.

Another plaintiffs' attorney, Erik Clark, said Pilot Flying J never intended to keep the promises it made in the contracts, which would constitute fraud.

Jimmy Haslam, the company's CEO, has said he had no knowledge of the scheme. Bill Haslam holds an undisclosed ownership share in the company but has said he is not involved in its day-to-day operations.

Ten former employees have pleaded guilty to a scheme to defraud customers since federal agents raided Pilot Flying J's headquarters in Knoxville, Tenn., in April 2013. Jimmy Haslam has not been charged with any crime.

Pilot Flying J agreed to pay $92 million in fines and accept responsibility for the criminal conduct of its employees while the government agreed not to prosecute the company. The agreement required Pilot Flying J to comply with several conditions, including cooperation in the investigation of people who may have been involved in the fraud. It did not protect any individual from prosecution.

Most of the lawsuits against Pilot Flying J were resolved by a class-action settlement, in which the company agreed to pay out nearly $85 million to 5,500 customers. But the trucking companies involved in Friday's court hearing opted out of the settlement to pursue their own suits.

"The class-action settlement grossly undersold the amount of the damages," Leicht said after Friday's hearing.

The remaining lawsuits were consolidated in U.S. District Court for Kentucky's eastern district.

The judge did not indicate how soon he would rule on the dismissal motion, said the report.

An FBI special agent said in an affidavit filed in federal court that sales team members reduced the amount of money that was due to trucking company customers they considered too unsophisticated to notice.

Court records said the scheme lasted from at least 2007 until the FBI raid in April 2013.

Pilot Flying J, the largest operator of truckstops in North America, has more than 650 retail locations.

Part of CSP's 2015 Convenience Top 101 retailers