CLEVELAND (92.3 The Fan) – Cleveland Browns owner Jimmy Haslam and Pilot Flying J reached a preliminary settlement Tuesday with trucking companies who were allegedly defrauded and denied rebates by the company.
News Channel 5 investigative reporter Ron Reagan was first to report the news.
The class-action settlement received preliminary approval in Arkansas federal court and was signed by U.S. District Judge James M. Moody Tuesday.
“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,” Haslam said in a statement.
“This is an unfortunate time for our customers and our company, but we remain committed to making things 100 percent right with our customers, to put systems in place to help ensure this does not happen again, and to re-earn our customers’ trust.”
Under the terms of the settlement, Pilot Flying J would pay the companies 100 percent what they are owed plus 6 percent interest, all legal fees and other expenses – including the cost of auditing the accounts and auditors – as well as an “incentive award.”
At least 21 companies had filed class-action lawsuits against Pilot Flying J since the federal investigation became public on April 15 when IRS and FBI officials raided the company’s Knoxville, Tenn. headquarters.
The lawsuit named 8 plaintiffs but other companies that participated in either the rebate program or the discount program will be sent a notice informing them of the class-action settlement. If they choose to opt out of the settlement, they could still sue separately.
4,000 companies fall into the settlement class defined in the agreement and Pilot Flying J admits no wrongdoing or liability.
“The advantage to them, if they choose to accept this, is that they get all their money back. They pay no legal fees and no administrative fees,” Pilot Flying J attorney Aubrey Harwell said. “It’s in keeping with what Jimmy Haslam committed to all along. He said, ‘We’re going to do this right. They’re going to be paid quickly and fairly.'”
The lead attorney for the trucking companies, Don Barrett, said he expects the other companies to be “pleased to death” with the settlement because so many of them don’t know whether they are owed money or not. With the settlement, they will find out what they are owed and get that money back with 6 percent interest accrued “from the minute they sent the check and it was less than it should have been,” Barrett said.
Barrett said the settlement offers customers the most complete relief he has seen in more than 40 years of practicing law, and he said much of that was due to Jimmy Haslam, “who stepped up to the plate and did the right thing.”
In a July 12 letter made public Monday, Haslam said Pilot had sent checks to trucking companies shorted on rebates. He didn’t say how large the checks were or how many were being distributed.
5 former Pilot Flying J employees have pleaded guilty as a result of the federal investigation which continues.
(TM and Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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