Many cases remain unresolved despite recent settlement.
Despite a so-called "global settlement," Pilot Flying J still faces about 16 unresolved lawsuits stemming from charges of rebate fraud, leaving the criminal and civil matters a long way from being resolved as the new year begins.
Attorneys for the travel center chain are trying to consolidate the remaining cases in federal court and would prefer to do so in Knoxville. Court records and interviews with lawyers involved in the cases show that the 16 pending suits are scattered from Alabama to New Jersey.
A total of 31 lawsuits were filed against Pilot after a highly publicized April 15, 2013, raid on the Knoxville firm's headquarters. The FBI, in a federal court filing soon after that, accused Pilot sales executives of systematically reducing rebates to truckers for years. They described a scenario in which Pilot executives believed the truckers would never realize they were being shortchanged.
Eleven of the cases were consolidated and resolved by an Arkansas judge after a brief hearing in late November — the class-action settlement that Pilot's lawyers tagged as "global," hoping it would put an end to the matter. Two others were resolved later through separate negotiations. In two more, the plaintiffs failed to comply with legal notice requirements, placing their claims in limbo.
Pilot's motion to consolidate the remaining cases in Knoxville is expected to be considered by a panel of federal judges in the next few weeks. It was filed Dec. 16.
Aubrey Harwell, a Nashville attorney representing Pilot, said the goal was to consolidate the remaining cases for the discovery phase of the remaining litigation.
Meanwhile, still other suits could be filed by dozens of other trucking companies that formally rejected the $85 million settlement offer. That means that fewer than a dozen cases were settled by the agreement approved by U.S. Judge James Moody on Nov. 25 in Little Rock, Ark.
On the criminal side, seven former Pilot sales executives have entered guilty pleas and await sentencing on mail and wire fraud charges relating to the rebate-skimming scheme. Lawyers involved in the criminal cases are due to file a status report with the court by Jan. 17.
Pilot's top executive, James Haslam, also owns the Cleveland Browns football team. At a recent news conference announcing the firing of the team's head coach, he was asked about the Pilot situation and said he was "confident we'll have a successful long-term outcome." He said company officials were "working closely with the government to work through these issues.
"The company has done everything we said we would do."
Asked to elaborate on Haslam's comment, Tom Ingram, a Nashville political consultant who has been hired as an adviser to Pilot, wrote: "As we've said all along, we have appropriately cooperated with the investigation since the beginning." He said he could not comment further.
One case going forward in Alabama was filed by Wright Transportation of Mobile. Attempts by Pilot lawyers to have that case delayed were turned down by the courts.
A scheduling conference in that case has been set for Wednesday. Responses from Pilot attorneys to complaints filed in Illinois, New Jersey and Alabama are due to be filed over the next month, court records show.
Also moving forward are five rebate suits filed against Pilot in circuit court in Knoxville on behalf of six trucking firms. A hearing relating to some of those is scheduled for Jan. 31.
The rebate lawsuits are not the only lawsuits Pilot is facing. A suit filed in U.S. District Court in Nashville charges that current and former employees, including Jacquelyn Dorris of Gallatin, were wrongfully classified as salaried employees, depriving them of thousands of dollars in overtime pay.
Lawyers for Pilot have denied the charges, contending that Dorris and other merchandisers were not misclassified.