Federal judge requests more information as trucking companies push fraud claims against Pilot



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COVINGTON, Kentucky — A federal judge said Friday he wants more information about business arrangements between the truck-stop company owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam and several trucking companies that claim they were cheated by the retail giant.

U.S. District Judge Amul Thapar asked attorneys to provide more details about what Pilot Flying J had promised the trucking companies. The request came as attorneys wrangled over Pilot's motion asking the judge to dismiss the lawsuits — the latest round in the retailer's legal woes.

The trucking companies claim they were cheated out of fuel rebates and discounts promised by Pilot Flying J, the nation's largest diesel retailer with annual revenues of about $30 billion.

The Haslams were not mentioned during the two-hour hearing, which drew a dozen attorneys to the Kentucky courtroom.

Leonard Leicht, an attorney for National Retail Transportation and Keystone Freight, said afterward that the additional information requested by the judge would shed more light on the scope of the scheme.

"We look forward to Pilot actually coming clean and giving us the exact information, which will enable us to calculate damages based on the actual cost of the fuel," Leicht said.

Pilot attorney Glenn Kurtz declined to comment afterward.

During the hearing, he disputed plaintiffs' claims that Pilot had committed fraud. Arguments by the trucking companies that they didn't receive what they were entitled to under their contracts with Pilot are "not enough" to justify the fraud claims, Kurtz said.

The trucking companies' allegations against Pilot include breach of contract and fraudulent misrepresentation.

Another plaintiffs' attorney, Erik Clark, said Pilot never intended to keep the promises it made in the contracts, which would constitute fraud.

Jimmy Haslam, Pilot's CEO, has said he had no knowledge of the scheme. Bill Haslam holds an undisclosed ownership share in the company but has said he is not involved in Pilot's day-to-day operations.

Ten former employees have pleaded guilty to a scheme to defraud customers since federal agents raided Pilot's headquarters in Knoxville, Tennessee, in April 2013. Jimmy Haslam has not been charged with any crime.

Pilot agreed to pay $92 million in fines and accept responsibility for the criminal conduct of its employees while the government agreed not to prosecute the company. The agreement required Pilot to comply with several conditions, including cooperation in the investigation of people who may have been involved in the fraud. It did not protect any individual at Pilot from prosecution.

Most of the lawsuits against Pilot were resolved by a class-action settlement, in which Pilot agreed to pay out nearly $85 million to 5,500 customers. But the trucking companies involved in Friday's court hearing opted out of the settlement to pursue their own suits.

"The class-action settlement grossly undersold the amount of the damages," Leicht said after Friday's hearing.

The remaining lawsuits were consolidated in U.S. District Court for Kentucky's eastern district.

The judge did not indicate how soon he would rule on the dismissal motion.

An FBI special agent said in an affidavit filed in federal court that sales team members reduced the amount of money that was due to trucking company customers they considered too unsophisticated to notice.

Court records said the scheme lasted from at least 2007 until the FBI raid in April 2013.

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