(WBIR-Knoxville) In the three months since the FBI raid at Pilot Flying J headquarters on April 15, lawsuits against the fuel company related to allegations of rebate fraud have come out of the woodwork. As of this week there were 21 lawsuits against Pilot Flying J.
Now eight of the suing law firms and Pilot Flying J have worked out a class action settlement agreement in federal court. Tuesday a federal judge in Arkansas gave his preliminary approval to the plan.
The agreement says Pilot will audit itself to determine how much it underpaid each of its customers, have the results certified by a court-approved accountant, and repay every company that
was short-changed what they are owed plus six percent interest. Pilot also agrees to cover all legal costs and fees. Clients have the right to dispute any audit results.
The agreement is also noteworthy for what it does not include. Pilot specifically states it does not admit any wrong-doing. The agreement also does not include any punitive damages. The use of a court-approved accountant while Pilot self-audits also means the private fuel company does not open its financial records to the public.
Knoxville lawyer and WBIR Inside Tennessee panelist Dennis Francis says the agreement is intriguing because it was apparently arranged without any of the suing law firms digging through Pilot's financial records.
"There has been absolutely no discovery done in this case, best I know," said Francis. "There has been no depositions, interrogatories, or review of documents. So it is quite interesting that there would be a settlement proposal made without anybody talking about it."
While the agreement says Pilot does not admit to doing anything wrong, it also includes a provision where Pilot agrees not to engage in any deceptive practices or rebate fraud in the future.
"They [Pilot] are agreeing whatever they've done wrong, even though they don't admit they've done anything wrong, they're not going to do in the future," said Francis.
The proposed agreement says more than 4,000 Pilot Flying J customers may qualify for the settlement. Customers are automatically included in the class action settlement, unless
the companies seek an exclusion.
Knoxville lawyer Drew McElroy was one of the first to file a lawsuit against Pilot in the wake of the FBI raid. McElroy told 10News he will advise his clients to opt out of the class action settlement and continue with their lawsuits.
"They make no provision for punitive damages," said McElroy. "It is a case of fraud. We will advise our clients to opt out of the class."
McElroy said he does not fault those who decide to take the quick settlement because some trucking companies need the money sooner than later.
Pilot CEO Jimmy Haslam issued a statement to that end, saying the settlement allows the fuel company and plaintiffs "to avoid further expense, inconvenience, and the distraction of burdensome and protracted litigation."
See Haslam's full statement below.
Statement by Pilot Flying J CEO Jimmy Haslam:
"Today in the United States District Court, Western Division of the Eastern District of Arkansas, our attorneys, working together with attorneys for eight of the companies that have filed class action lawsuits against Pilot Flying J, agreed to a plan to pay all customers who join the class 100% of the money they are owed, plus 6% interest, as soon as possible and without the need for unnecessary time in court, plaintiff legal fees or out of pocket costs. I commend all of these individuals for their hard work and dedication to ensuring our customers are paid back quickly and fairly for any potential discrepancies found in their accounts.
"Customers who already received checks with interest based on our internal field audit team's ongoing review will receive supplemental checks for any additional interest not included in the original calculation. In addition, all of our customers, as defined by the court agreement, may join the class and have a free independent accountant, approved by the court, validate Pilot Flying J's internal audit process of the customer's account.
"In addition, Pilot Flying J will pay all court, administrative, accounting, mailing, processing and legal costs incurred as part of the procedure approved by the court today, ensuring our customers will get every dollar they are owed, with interest, without protracted legal battles, time delays or costly legal expenses.
"Under the court agreement, Pilot Flying J will distribute a statement to all of its customers and to the media as part of notice provision to ensure all of our customers have the opportunity to resolve any concerns they may have in this fashion. We also will make available to attorneys for the class a mailing of all of our customers.
"Customers who are satisfied with their accounts may continue with business as usual, and we assure them our utmost attention, 24-7, 365 days a year, serving them and their drivers. Customers who are concerned about their accounts may join the class by simply doing nothing. Their accounts will be audited free to the customer. Finally, customers have the right to opt out and pursue their own legal objectives at their own expense, which can be significant.
"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."
Read previous stories about the Pilot Flying J investigation:
July 15 -- Nine Pilot employees gone amid scam investigation; rebate program ended
July 15 -- 21st lawsuit filed against Pilot Flying J; lawsuits expected to merge
July 9 -- New Hampshire trucking company sues Pilot Flying J
July 5 -- Pilot sued after repaying company for rebate 'discrepancy'
July 3 -- 2 more companies file lawsuits against Pilot Flying J
July 2 -- Illinois trucking company files lawsuit against Pilot Flying J
June 24 -- Attorneys look to consolidate Pilot Flying J cases
June 18 -- Pilot fraud victim wants prison for sales director
June 18 -- Three additional Pilot Flying J employees plead guilty
June 11 -- Ala. lawsuit added to growing list against Pilot Flying J
June 3 -- Former Morehouse trucker sues Pilot Flying J
May 31 -- Ohio firm files suit charging fraud by Pilot Flying J
May 29 -- Pilot sales execs plead guilty in 'indefensible' fraud case
May 24 -- Mississippi company files class action lawsuit
April 29 -- Judge denies motion to keep Pilot Flying J from contacting customers
April 27 -- Omaha truck line discusses alleged Pilot rebate ripoff in-depth
April 26 -- More lawsuits filed against Pilot Flying J
April 22 -- Pilot Flying J puts managers on leave, takes steps to repair relationships
April 21 -- GA trucking company files lawsuit against Pilot Flying J
April 19 -- Search warrants: Haslam knew about scheme to defraud customers
April 19 -- Haslam: Not stepping down because 'I haven't done anything wrong'
April 18 -- Affidavit for search warrant
April 17 -- Pilot Flying J releases more details about what's inside the warrants
April 16 -- Jimmy Haslam addresses Pilot Flying J investigation
April 16 -- FBI, IRS still mum on Pilot Flying J raid