CLEVELAND -- A judge in Arkansas federal court has approved a preliminary class-action settlement between Pilot Flying J and trucking companies.
The United States District Court Eastern District of Arkansas was reviewing a proposal for a settlement between Pilot Flying J and multiple plaintiffs in Federal Class Action lawsuits.
Court documents that were just released outline a preliminary approval of the settlement.
Court documents show eight class action members that joined as part of an original suit in the U.S. District Court in Eastern District of Arkansas asked the judge for approval.
The suit, filed on April 24, was the first of now nearly two dozen civil lawsuits against the company.
Court filings suggest repaying the plaintiffs could cost around $40 million, and payments to attorneys may cost another $14 million.
"Jimmy Haslam is delighted, as am I, that the judge gave his preliminary approval to what's a very fair approach," said Aubrey Harwell, Haslam's attorney.
"This is absolutely keeping a commitment that Jimmy Haslam made about treating his customers fairly and doing it right," said Harwell.
Under the settlement, Pilot Flying J will audit accounts of all its customers who got a rebate since 2008, and pay back any money owed, with 6 percent interest.
Customers can opt out of the class action, or dispute the results.
Pilot will foot the bill for all the costs, including legal fees, which could be in the tens of thousands of dollars for most class members.
"It's more money that they would net if they go to court and have to pay attorney's fees in most cases," said Harwell.
But not everyone likes the offer. Drew McElroy, the attorney who filed a class action case in Knox County Circuit Court, tells Channel 3 News his clients will opt out and move forward with their own suit.
"They make no provision for punitive damages," said McElroy.
Court documents show attorneys for Pilot Flying J request the settlement be applied to all class action members. They estimate there are more than 4,000 customers that fall into the Settlement Class.
At least 21 trucking company customers have filed class action lawsuits since the FBI exposed rebate fraud at the company in April.
Jimmy Haslam released a written statement:
"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."
Jimmy Haslam, who purchased the Cleveland Browns last fall, has denied any wrongdoing or knowledge of the scheme.
Five employees of Pilot Flying J have entered guilty pleas to charges of mail and wire fraud, agreeing to cooperate with federal prosecutors as they continue to investigate the case.