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Complaints commence regarding Pilot Flying J settlement

Jimmy Haslam AP

The headlines suggested that the cases were all but over.  The reality is that there’s a long way to go until the civil litigation against Pilot Flying J ends.

The first hint of potential trouble already has surfaced, less than two days after a judge in Arkansas gave tentative approval to the settlement of a nationwide class action on behalf of all customers defrauded by the company run by Browns owner Jimmy Haslam.

“The thing that bothers us the most about this class settlement is that it is like a bank robber who gets caught red-handed stealing money, offering to return the money with interest in order to avoid prosecution,” said Jeffrey Friedman, who represents Shoreline Transportation, of Alabama.

He has a good point.  Fraud falls into the category of what the law calls “intentional torts.”  The available damages include compensation for any actual losses (i.e., the money that wasn’t paid), compensation for “general” damages like aggravation and inconvenience, and punitive damages aimed at deterring others from doing the same thing in the future.

In this specific case, forcing Pilot Flying J to pay back all the money it didn’t pay in the first place plus interest and attorneys’ fees doesn’t exactly fire a warning shot to any other company that would be tempted to try to get away with widespread fraud against unsuspecting customers.  A major award of monetary damages aimed at making an example of the offending party ultimately could be the best recourse.

While each individual customer will have the ability to opt out of the proposed settlement and pursue its own claim for compensatory and punitive damages, constitutional limits on punitive damages would result in much smaller awards on a per-customer basis.  Only with all customers joined in one lawsuit that is pushed to the limit will Pilot Flying J be held to maximum financial accountability.

Really, why wouldn’t all of the customers who were duped want to hold Pilot Flying J to maximum financial accountability?  In this case, more than 20 class-action lawsuits were filed, Pilot Flying J’s lawyers found the one lawyer who was willing to settle quickly, and now the rest of the customers’ hands potentially will be tied.

An opportunity nevertheless exists for these supposedly unsophisticated trucking companies to show how sophisticated they really are.  They can all opt out of the Arkansas settlement, they can band together in the jurisdiction deemed to be most favorable to their cause, and they can push the case all the way to and through trial, aiming for a verdict that will inflict the kind of financial damage that will echo throughout every American industry.

As former Pilot Flying J V.P. of Sales John Freeman allegedly said (according to the affidavit supporting the issuance of a search warrant), “I don’t want to get into a moral or ethical conversation, because I believe that if a guy’s gonna butt-f–k you then we got to go to butt-f–kin’ him harder.”

For the customers who had been on the wrong end of that specific activity, they now have an opportunity to return the favor.  Frankly, it’s amazing that any of them would want to settle their claims only for the money that was stolen from them, plus six-percent interest.

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19 Responses to “Complaints commence regarding Pilot Flying J settlement”
  1. mkgcle says: Jul 18, 2013 8:29 AM

    I’m glad you use your legal knowledge to inform readers on finer points of the justice system, but “frankly, it’s amazing” that you fail to note just how difficult it will be for these plaintiffs to make it into court as a class action at all. They don’t get to proceed as a class action just because they want to, there’s an entire complex process they have to go through just to be able to act as a class. I think it’s entirely plausible that these plaintiffs would want to just get what they are owed and not have to worry about the possibility of astronomical legal fees incurred throughout a drawn-out class action certification struggle and leave the “punishment” to the almost-inevitable federal criminal prosecution.

  2. daaabears says: Jul 18, 2013 8:32 AM

    This is what I was wondering yesterday. If the Feds started this investigation, don’t they have something to say about continuing this case in court?

  3. flmike says: Jul 18, 2013 8:41 AM

    Hell, why doesn’t Jimmy just lobby his friends in Congress like the gun manufacturers did, now they can’t be sued for liability due to the products they produce…He can claim it was self-defense, he kept their money to help defend himself from future monetary loss…sounds like self defense to me.

  4. 6ball says: Jul 18, 2013 8:42 AM

    .

    Criminal Court – The House of Commons

    Civil Court – The House of Lords

    .

  5. germanstingray says: Jul 18, 2013 8:50 AM

    Perhaps some of the individuals running the trucking companies are satisfied with receiving what was promised to them as well as an apology. Some persons are capable of forgiveness and do not desire to eviscerate another over a monetary disagreement.

  6. nfloracle says: Jul 18, 2013 9:04 AM

    “Frankly, it’s amazing that any of them would want to settle their claims only for the money that was stolen from them, plus six-percent interest.”

    Not at all. The money stolen and the 6% only represent the legal part of the “settlement.” The non-written part of the settlement that gets this deal done now without any jail time for you know who may well involve promises for future business breaks, trips for the offended executives to the Bahamas, and weekly pedicures for their wives.

    Business as usual… because of their billions the 1% crooks win without doing any time, their lawyers who want to be in the 1% inch up a little closer, and the rest of us snort in our morning coffee about what passes for “justice” in America these days.

  7. vibesid says: Jul 18, 2013 9:25 AM

    If companies can commit fraud with no penalties, that is no deterrent. They must face punishment more severe than just returning the money IF they are caught. Everybody will be committing fraud because there will be no risk to getting caught, and if they do NOT get caught then they are ahead of the game. It will in fact provide an incentive for cheating and committing fraud. Especially if everybody else is doing it. They can say they have to cheat in order to keep up with the competition.

  8. munny10 says: Jul 18, 2013 9:27 AM

    I’m with Florio on this one. ClassAction has its hoops, but should not be a problem (IMO). Very surprised – almost concerned – about the ethics and responosibility of the firm that suggested $ and 6%. Something almost fishy with that settlement when the employees are flipping like hot cakes and the feds appear to have a strong case.

  9. 87lwrdr says: Jul 18, 2013 9:57 AM

    First of all I agree punishment SHOULD be handed out, but to the right people. Secondly I believe anytime a lawyer opens his mouth is for one of two reasons, he either wants something (generally more money) or he’s lying. The lawyers want the lawsuits to go through so they can make more money on their fees. If settlements are made they will get less, period. My other concern is PUNISH THE GUILTY PEOPLE who perpetrated and knew of this scheme not an entire company. In the football for example you don’t see them suing the Patriots or the NFL in the Hernandez case, or when a Congressman or Senator does something wrong or cheats the people they don’t sue the US Government. The one and only reason they are going after Flying J as a whole is for the money plain and simple. Punish the guilty and learn to setup a better way of monitoring these types of money transactions. The problem with country is there are to many lawyers out to make the fast easy buck and could care less about the parties involved.

  10. runtheball says: Jul 18, 2013 9:59 AM

    I still do not understand how they are owed a rebate. If they do not claim it and the company doesn’t give it to them how is that fraud? If I have a cash back bonus from my credit card and I do not attempt to apply it to my balance, redeem for gift cards, or request a check, They don’t just send me something.

  11. kkrebs40 says: Jul 18, 2013 9:59 AM

    What a lot of you are forgetting is that there is still a Criminal Investigation. Pilot Flying J (and the employees responsible) are not “getting off the hook” with this civil settlement. This settlement squares away the financial end of things with the customers. All the money they are owed, plus 6%, plus all lawyer fees, etc paid for. Not a bad deal IMO.

    True, this settlement doesn’t act as a deterrent for ripping off customers….but the Federal Criminal Investigation does! The people involved (including the 5 who plead guilty so far) are facing jail time….if that isn’t a deterrent to not rip off your customers, then I don’t know what is.

  12. gb4mn0 says: Jul 18, 2013 10:04 AM

    I’m guessing that many of the affected trucking companies will take the settlement and move on due to the fact that in today’s world of DOT hours of available service many of the Pilot Flying J truck stops have become integral in the logistics and routing of “long haul” routes. The cost of having to make adjustments to their logistics would be greater than the settlement.

  13. mkgcle says: Jul 18, 2013 10:08 AM

    munny10 – From what I know, I agree that it’s likely the plaintiffs could successfully jump through the class-action hoops. I just think that PFJ’s lawyers would make it a very lengthy and expensive process. If I’m the owner of an “unsophisticated” small-to-midsize trucking company (i.e. the kind of company that PFJ allegedly targeted, and thus the kind of company that is likely a plaintiff here), I’ve got much better things to do with my time and money than get involved in drawn-out legal battles/minutiae. I’ll take my payment, hire more people in my accounting/bookkeeping department, and move on with my life.

    As far as the ethics/responsibility of the firm that suggested the deal: I’m not sure if you mean PFJ’s firm, or the plaintiffs’ firm. Either way, the firm’s job is the same: get the best deal for their client(s). If you’re PFJ’s lawyer, this is a GREAT deal for your client. If you’re the plaintiffs’ lawyer, this is at least a reasonable deal that makes your clients whole. Remember, this deal had to be approved by a judge before it was submitted to the plaintiffs for their consideration. If the deal was really THAT bad/unfair, it’s unlikely the judge would’ve approved it.

  14. jwh8541 says: Jul 18, 2013 11:21 AM

    Perhaps those companies need the money now.

    Perhaps they are small companies with no faith that the legal system will find in their favor.

  15. listenupcupcake says: Jul 18, 2013 11:44 AM

    MF da lawyer sez:
    “… forcing Pilot Flying J to pay back all the money it didn’t pay in the first place plus interest and attorneys’ fees…” is inadequate to deter possible future wrongdoers.

    I disagree. The wronged parties get back ALL their money, PLUS interest, PLUS the attorney’s fees and costs it took them to obtain full restitution. They are made absolutely whole. That’s the primary purpose of any litigation.

    Note that paying interest (which may be a wash but in low-interest times probably represents a net loss to Pilot FJ) on claims, AND paying other parties’ attorneys fees and associated costs, Pilot FJ will be out considerably more money than this scheme took in already.

    The only reason to “punish” a corporation with additional financial damages above and beyond what’s already to be done above is ONLY to over-compensate greedy trial lawyers who, instead of billing by the hour or on some other reasonable basis, get a percentage of the award. There’s a reason why successful PI and mass tort and other class action lawyers live in mega-mansions and own mega-yachts, and are much wealthier than (still quite wealthy) corporate lawyers – and it has nothing to do with either legal acumen or any deterrent effect or other social benefit.

    The overlooked social costs of this “punitive” over-compensation are difficult to quantify but are very substantial – e.g., in reduced domestic productivity as business operations are moved to lower-risk jurisdictions (i.e., overseas), in increased risks for new businesses resulting in fewer of them being funded and launched (and loss of consequent employment), and in the greatly higher insurance costs that we all pay. This money doesn’t come from the bad guys – ultimately, it comes from US. Just to keep shysters in clover? No thanks.

    And in addition to fully compensating their wronged clients as detailed above, Pilot FJ and its owners have also suffered acute public embarrassment, now have a stain on their business reputation that their competitors will be slamming them with for years if not decades, and there’s the distinct possibility that some executives will be prosecuted criminally. That’s plenty of extra disincentive to deter possible future misconduct.

    There’s no need to pile on by feathering the gilded nests of overpaid trial lawyers. These “punitive” damages only punish the innocent – you and me.

  16. thestrategyexpert says: Jul 18, 2013 12:00 PM

    I have a proposal. How about we liquidate the entire Pilot Flying J company, or sell it to another company, and figure out how much money we have to split up? How does that deal sound Jimmy?

  17. bigtime1957 says: Jul 18, 2013 12:27 PM

    The ones that settle are his Republican Trucking Company owners, A Liberal will want him in jail

  18. vibesid says: Jul 18, 2013 12:48 PM

    @listenupcupcake
    You sound like a lobbyist for Big Business by railing on about “greedy trial lawyers.” History shows that big monetary damages are the only deterrent to bad behavior by Big Business. By “History” I mean the FACTS of what has happened, including everybody from Erin Brockovich to Ralph Nader.

  19. 1796g3x4 says: Jul 22, 2013 12:55 AM

    Are there 2 other damaged groups that are not discussed: defunct trucking companies and competitors?

    Defunct Trucking Companies

    The 5+ years that PFJ is accused of doing this happen to coincide with a period of rapidly rising fuel prices AND a record number of trucking company failures. What role did the withheld rebates have? Fuel prices rose faster than freight rates could keep up. Trucking firms without the liquidity had to seek protection or close. Maybe those rebates would have provided enough lquidity to help get through that period. Not only were owners hurt but creditors and employees as well. Many of those companies’ bankruptcy trustees have closed their cases and those harmed companies may never get their day in court.

    Competitors
    Because PFJ lured customers away from competing truck stops with the promise of rebates, rebates that those other truckstops couldn’t honestly promise, those truckstops lost that business (not just the fuel business but the lucritive retail business as well). How do the damaged competitors get whole?

    If these accusations are true maybe the penalty for these should be bourn not only by the CEO, President, CFO, VP of Sales and whoever else was involved but also PFJ. The combination of the companies forming PFJ created an advantage over competitors and customers that needs to be reexamined by the FTC and needs to be addressed in these court cases maybe by significant punitive damages.

    Is the settlement prescribed by the Arkansas court fair? Should the repayment and interest be enough repayment for PFJ? Maybe the playing field needs to be leveled somehow to remove what appears to be an unfair advantage to one company.

    To address the one comment about the customers needing to apply for their own rebate. This contractual arrangement is unlike a rebate for a flashlight or a case of baby diapers. There is a promise to pay the rebate based on (mostly) factual data. The customer need do nothing except purchase fuel in volumes and at posted prices that determine the amount of rebate. The fact that these customers weren’t sophisticated enough to audit the rebates is kind of the reason they were singled out by PFJ to be shorted in the first place. No rebate forms needed to be mailed.

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