Embattled truckstop chain Pilot Flying J is trying to put its best foot forward with customers by taking to the Internet.
On July 16 the United States District Court, Western Division of the Eastern District of Arkansas in Little Rock, gave preliminary approval to the consolidation and oversight of all class action lawsuits filed against Pilot Flying J in conjunction with the federal investigation alleging fraud in Pilot Flying J’s diesel fuel sales rebate and discount programs. A separate court turned back an effort to consolidate lawsuits that are not part of the settlement.
A fairness hearing is scheduled in Little Rock on November 25, at which time many observers expect the court to give final approval to the settlement proposed in this case.
In April agents from the FBI and IRS raided company headquarters in Knoxville as part of criminal investigation. Since that time more than 20 lawsuits have been filed against Pilot Flying J, though it denies any wrongdoing, despite seven current and former employees pleading guilty to federal charges.
Nashville attorney Aubrey Harwell, senior partner of the law firm of Neal & Harwell, which represents Pilot Flying J in this matter, discusses in the following interview the proposed settlement and its potential impact on Pilot Flying J customers.
Q. What is the class settlement all about?
A. Attorneys representing a number of Pilot Flying J customers and attorneys representing Pilot Flying J asked the federal court in Little Rock to consolidate all class action lawsuits against Pilot Flying J into one suit with a proposed settlement, in an effort to expedite any and all claims in the best interest of all parties, in the shortest amount of time, and in the most cost-efficient manner.
Q. Is the consolidation and settlement final?
A. A fairness hearing, which many believe will result in final approval, is scheduled in Little Rock on November 25. In the meantime, members of the eligible class of Pilot Flying J customers have until October 15 to opt-out of the class.
Q. Which Pilot Flying J customers are eligible?
A. The court defined the eligible class as any Pilot Flying J customer who between January 1, 2005, and April 15, 2013, bought over the road diesel fuel for commercial use from Pilot Flying J under a rebate or discount program.
Q. What does opt-out mean?
A. According to the court, an eligible Pilot Flying J customer that does nothing automatically is a member of the class. Any customer that wants to pursue its own remedy outside of the class should notify the court by October 15 that they do not want to be a member of the class, in which case the customer will “opt-out.”
Q: What does the class settlement mean to Pilot Flying J customers that stay in the class?
A: Simply stated, it means every Pilot Flying J customer potentially owed an additional rebate or discount has an opportunity to be paid promptly, and with minimum effort, every dollar plus interest. More specifically, the settlement states that all Pilot Flying J customers that are part of the class and stay in the class will have their accounts audited from January 1, 2005 through July 15, 2013, at no cost to the class member. Each class member then will be paid 100% of the amount owed, plus 6% interest. A notice regarding the settlement was mailed to class members in early August, and detailed information about the settlement, as well as the settlement agreement and certain court documents, can be found at www.DieselRebateSettlement.com.
Q: Why should a customer stay in the settlement?
A: The United States District Court in Little Rock has made a preliminary finding that this settlement “appears to be fair, reasonable, and adequate.” A number of plaintiffs and their lawyers have also said that they think this settlement is fair and have agreed to it; one prominent lawyer representing trucking companies called it “the best settlement he had ever negotiated.” Nonetheless, Pilot Flying J does not want any customer that is uncomfortable with the settlement to feel it has to participate. Pilot Flying J values and appreciates its customers’ opinions and right to do as they believe best.
Pilot Flying J believes this is a good settlement for its customers and that they should participate in the settlement because it provides that all Pilot Flying J customers who are owed money will be paid quickly, every dollar owed plus interest. It provides a complete and fair review of each Pilot Flying J customer’s account from 2005 forward. Pilot Flying J customers will know that their accounts are being audited with court oversight and that they have options if they do not agree with the audit results. Pilot Flying J customers do not need to hire and pay a lawyer to receive any payment owed.
Q: What if a customer does not agree with the proposed settlement?
A: First and foremost, Pilot Flying J respects its customers and does not want any of its customers to participate in the settlement if they do not want to do so. It’s the customer’s decision. Any customer who does not agree with the settlement has two options. First, Pilot Flying J customers have the right to ask to be excluded, or opt-out, of this settlement, even if the customer already has received and cashed a check from Pilot Flying J. The other option for Pilot Flying J customers who do not like the settlement is to remain in the class action, but tell the Arkansas court why they disagree with the settlement and ask the court not to approve it. The deadline for taking either of these steps is October 15.
Q: What happens if a customer has already received a payment from Pilot Flying J?
A: A customer who has already received a payment from Pilot Flying J still will be included in the class settlement if they do not opt-out. The customer will receive another payment for interest that has not yet been paid. If any other amounts are found to be owed, the customer will receive a check for 100% of that additional amount plus 6% interest.
Q: What if a customer does not agree with Pilot Flying J’s audit results?
A: As part of the settlement, an independent accountant has been preliminarily approved by the court. If a customer does not agree with the audit results, it may ask the independent accountant to review its account. If the customer does not agree with the independent accountant’s conclusions, the customer, at its own cost, can hire an accountant to audit its account and can ask the court to change the payment amount based on the results of the accountant’s review.
Q: What if a customer does not have its audit results before the opt-out deadline of October 15?
A: The amount that a customer will receive is absolutely not affected in any way by the date it receives its audit results. Under the settlement, customers will be paid 100% of what they are owed, plus 6% interest. If a customer does not agree with the results of the audit, the customer can challenge the results with the assistance of the independent accountant and/or the customer’s own accountant. The customer does not have to challenge the results of the audit before October 15. The only decision the customer needs to make by October 15 is whether it wants to receive everything it is owed plus interest, or whether it wants to hire a lawyer to pursue its claims in a separate lawsuit.
Q: What is the downside to participating in the settlement?
A: While I truly believe there is no downside, there are those who might suggest a downside is that a customer who participates in the settlement cannot also pursue its claims in a separate lawsuit. Some also may argue that a customer has a chance to pursue additional damages not included in this settlement. Those damages are uncertain and would require the expense of hiring a lawyer and the need to participate in a long, drawn-out legal process that could take years to conclude, with a possibility of achieving a net recovery (after fees and expenses) of less than that which will be paid to customers who participate in the settlement.