KNOXVILLE, Tenn. -- Even as Pilot Flying J's board appointed a "special independent counsel" to lead an internal investigation of recent federal allegations that the truckstop chain underpaid rebates to some trucking companies on diesel fuel purchases, still more lawsuits have been filed against Pilot Flying J. The latest, filed on Wednesday, accuses it of racketeering.
As reported in a Raymond James/CSP Daily News Flash on Wednesday, along with naming Reid Weingarten of Steptoe & Johnson LLP as special independent counsel, Pilot Flying J's board also named Brad Martin, retired chairman and CEO of Saks Inc., as the head of a special committee that will work with Weingarten and receive his eventual report.
"We're pleased to have someone with Mr. Weingarten's background, credentials and reputation take on this assignment. He is the perfect person to help us understand the facts and do the right thing during this difficult period."
Weingarten was listed earlier this year by The National Law Journal as one of the nation's 100 most influential lawyers, Pilot Flying J said. Prior to joining Steptoe & Johnson, he served as a trial attorney for the Public Integrity Section of the U.S. Department of Justice and as a deputy district attorney for Dauphin County, Pennsylvania.
Associates from Steptoe & Johnson also serve as counsel to NACS and SIGMA.
R. Brad Martin is chairman of RBM Venture Co., a private investment firm. Martin serves on the board of FedEx, First Horizon, Chesapeake Energy and Dillard's. Martin will become the interim president of the University of Memphis on June 30 of this year. Martin is the former chairman and CEO of Saks and its predecessor, Proffitt's Inc., and served as a senior executive in this Fortune 500 firm for nearly 20 years.
The federal government made public its investigation into Pilot Flying J on April 15, 2013. On April 21, 2013, the Pilot Flying J board voted to hire special counsel to oversee and validate internal inquiries related to the investigation.
Jimmy Haslam, Pilot Flying J CEO and board member, announced the board's decision in a statement on April 22. At the time Haslam said, "Because there is a federal investigation now, we have to take extraordinary steps to do whatever is necessary to repair any damage done to this company's reputation and restore the full integrity on which this company was built. Our board will find the best person in America to come into this situation and oversee and make certain that any and all of our own investigations into these matters are thorough and correct and help us ensure that what happened to this company never happens again."
So far, five lawsuits have been filed:
- Atlantic Coast Carriers Inc., Hazlehurst, Ga., filed a lawsuit on April 20 against Pilot Flying J in Knox County Circuit Court in Knoxville. Attorneys charged that Haslam was trying to short circuit Atlantic Coast Carriers' class-action lawsuit and asked a Knoxville judge to order the travel-center executive to cease contacting trucking firms that may be victims of the alleged rebate scheme. Earlier this week, a judge denied the charge of witness tampering and a request for a restraining order that would have prevented Pilot Flying J from contacting its own customers concerning the rebates.
- National Trucking Financial Reclamation Services, Little Rock, Ark., filed a suit on April 24 citing the evidence in the 120-page FBI affidavit that Pilot reduced promised rebates to some of it customers who received monthly rebate checks, reported The Tennessean. "The defendants actions were willful, wanton, malicious and in total disregard for the rights of the plaintiff," the complaint said, charging Pilot with fraud, deceptive sales practices and unjust enrichment.
- W.T.W. Enterprises, Roanoke, Ala., and its owner, Charles E. Winborn, another Pilot customer, filed a suit April 25, the newspaper said. The 11-page complaint charges that the alleged rebate "skimming scheme" cost trucking firms in excess of $5 million; it charges breach of contract and violations of Tennessee's Consumer Protection Act.
- Bruce Taylor, a trucker, filed a class-action suit in Jackson, Miss., this week, said the Tennessean. According to the 21-page complaint Taylor, a Holmes County trucker and the plaintiff, was a Pilot customer since 2005 and had been promised rebates by Pilot. His suit cited the allegations in the FBI affidavit filed following the April 15 raid. The suit said Pilot and it agents engaged in fraud, deceptive trade practices and breach of contract. "Defendants actions were willful, wanton, malicious and in total disregard for the right of plaintiff and class members," the suit said.
- Edis Trucking Inc., Franksville, Wis., filed a suit on May 1 in Chicago that accuses the company, Haslam, president Mark Hazelwood and other executive of racketeering, said a Bloomberg report. The Wisconsin company is also seeking unspecified money damages including a punitive award and other relief.
And, according to a USA Today live report on Wednesday, "While no charges have been filed yet, that doesn't mean employees ... aren't planning their own defenses. Knoxville criminal defense attorney Dennis Francis calls it 'getting to be first on the bus.' If several, maybe dozens of Pilot employees believe they could be facing charges, they might be the first to line up and make a deal with federal attorneys to bolster the government's case."
Pilot Flying J, Knoxville, Tenn., has more than 650 retail locations and is the largest operator of travel centers and travel plazas in North America. Its network provides customers with access to more than 60,000 parking spaces for trucks, more than 4,400 showers and more than 4,000 diesel lanes, of which more than 2,800 offer diesel exhaust fluid (DEF) at the pump. Pilot Logistics Services is one of the largest independent energy logistics companies in North America, selling and distributing more than 1.3 billion gallons of refined petroleum products and serving more than 15,000 customers. Together, Pilot Flying J and Pilot Logistics Services generate sales of approximately nine billion gallons of petroleum annually.
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