Tennessee: Some customers won't take settlement in Pilot rebate lawsuits

Tennessee: Some customers won't take settlement in Pilot rebate lawsuits

October 16th, 2013 by Associated Press in Business Around the Region

Pilot Flying J's corporate offices are pictured in this file photo.

Photo by The Knoxville News Sentinel /Times Free Press.

NASHVILLE - A speedy settlement by some companies with the truck-stop chain owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam won't put a quick end to lawsuits from customers who authorities say were cheated out of discounts and rebates.

Pilot Flying J attorney Aubrey Harwell said Tuesday that about 50 of Pilot's 6,000-plus customers have opted out of a settlement. Some are pursuing their own lawsuits, saying they will seek an award for damages from the nation's largest diesel retailer.

Tuesday was the opt-out deadline, but the total number of customers that chose not to participate in the settlement may not be known for a few days. Customers who don't opt out are automatically included.

On April 15, federal agents raided Pilot's Knoxville headquarters. An affidavit in the case revealed that the company had systematically cheated customers in a scheme that was well known among the sales staff.

So far, seven Pilot sales employees have pleaded guilty to defrauding customers. Another two have agreed to cooperate with prosecutors in exchange for immunity from prosecution. A criminal investigation is ongoing.

Since April, several of Pilot's customers have sued over the withheld rebates and discounts. A group of them reached a class-action settlement with the company in July, just three months after the raid. It promises to repay any money owed with interest.

Harwell said Pilot thinks the settlement is fair. He said that is evidenced by the small percentage of customers choosing to opt out of the settlement.

Knoxville attorney Drew McElroy has filed suits against Pilot for seven clients and says a few others have decided not to accept the settlement in order to keep their options open.

McElroy said the main problem he sees with the settlement is that it doesn't allow customers to collect punitive damages.

"We've got some bad actors here," he said. "For someone to treat their customers the way these have been treated here and then just say, 'Here's your money back' - we don't think that's a full measure of compensation."

Attorney David Guin, of Birmingham, Ala., represents a trucking company that decided to accept the settlement. Guin said he met with the accounting firm that is checking Pilot's figures and is confident his clients will get what they are owed.

Jimmy Haslam has denied any personal wrongdoing. Gov. Bill Haslam says he is not involved with operating Pilot Flying J, though he continues to hold an undisclosed ownership stake.

The family-owned company posts annual revenues of about $30 billion.