The truck-stop company owned by Cleveland Browns owner Jimmy Haslam has agreed to pay back the trucking companies that were cheated out of fuel rebates, according to a settlement given preliminary approval Tuesday.
Under the agreement approved by a federal judge in Arkansas, Pilot Flying J would pay the companies what they are owed with interest.
Federal agents raided the Knoxville headquarters of Pilot Flying J earlier this year after an employee claimed the nation's largest diesel retailer was systematically cheating its clients. Five employees have since pleaded guilty to federal charges.
Jimmy Halsam is the brother of Tennessee Gov. Bill Haslam, who has an undisclosed ownership share in the company. Both have denied any wrongdoing, and the company didn't acknowledge wrongdoing in the settlement.
Under the terms of the preliminary settlement, Pilot Flying J would pay all legal fees and other expenses. That includes the cost of auditing the accounts and then auditing the auditors.
Pilot spokesman Tom Ingram said the company expects the total number of customers who are owed money will be a relatively small percentage of Pilot's more-than-4,000 customers. So far, 22 class-action lawsuits have been filed against Pilot Flying J, one of which was dismissed.
Eight of the suits are represented directly by Tuesday's settlement. All other companies that participated in either Pilot's rebate program or its 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.
"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.'"
Jimmy Haslam said in a statement that the company is working to make things right with its customers.
"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," he said.
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 Halsam, "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.
Haslam said during a speech in May at an annual conference of truckers in Indianapolis that as many as 250 trucking companies might be owed money.
Pilot attorney Harwell said that it is impossible to know how much is owed until the audit is complete.
Pilot Flying J is the nation's largest diesel retailer with annual revenues of around $30 billion.
Ingram said he expects the total settlement, while significant, to amount to a relatively small percentage of that revenue.