Judge OKs Pilot Flying J Class-Action Settlement

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Judge OKs Pilot Flying J Class-Action Settlement


LITTLE ROCK, Ark. -- At a hearing conducted this morning, U.S. District Judge James Moody granted final approval to the class-action settlement between Pilot Flying J and the trucking companies suing the retailer over discrepancies in its fuel rebate program.

The Knoxville, Tenn.-based company's attorney Aubrey Harwell praised the settlement's "fundamental fairness" and called it a "shining example of how the system should work."

Don Barrett, the plaintiffs' attorney, said it was a "spectacular result for the class" and commended Pilot Flying J for doing everything it agreed to do "well and honorably," according to Pilot Flying J.

The U.S. District Court for the Eastern District of Arkansas had previously granted preliminary approval to the settlement. The hearing today included a review of what had transpired since then, including the implementation of those steps required by the court under its earlier orders, according to the retailer.

The law states that the court should approve a class-action settlement only if the settlement is found to be fair, reasonable and adequate. By granting final approval at today's hearing, the court found that the settlement met this standard, the company explained.

This issue dates back to the April 15 federal raid on Pilot Flying J's headquarters over fraud allegations in its fuel rebate program. In July, the company reached a proposed settlement to resolve the more than 20 lawsuits filed against it since April, as CSNews Online previously reported.

Earlier this month, Pilot Flying J estimated that it would repay more than $55 million to trucking companies involved in the lawsuit, with its total settlement costs reaching approximately $72 million.

According to the company, the specific terms of the settlement include:

  • The settlement guarantees payment to class members of every penny of unpaid discounts they are owed, plus 6-percent interest.
  • The payments are to be mailed to each recipient within 30 days after the amount owed is finally calculated, or 30 days after the court's final approval of the settlement (whichever is later).
  • Notice will also be mailed to those class members who are not owed anything, and if they disagree for any reason, there are mechanisms in place for them to seek further review.
  • A court-approved independent accounting firm (Horne LLP) has been retained to review the procedures and protocols that Pilot Flying J's internal audit department used to calculate settlement payments, and to conduct a statistical sampling of accounts to verify the accuracy of the internal audit's conclusions. The independent accounting firm has already been conducting its review for some time.
  • Class members can also ask Horne to review their particular accounts.
  • If dissatisfied with Horne's findings, class members can hire their own accountants to audit their accounts, and then ask the court to rule on any disputed amounts.
  • The settlement includes a permanent injunction prohibiting Pilot Flying J from ever improperly withholding rebates or discounts in the future.
  • Under the settlement, Pilot Flying J will pay: (1) 100 percent of unpaid discounts the class members are owed, plus 6-percent interest; (2) the cost of providing notice of the settlement; (3) the fees and expenses of the class administrator; (4) the cost of the internal audit; (5) the fees and expenses of the independent accountant; (6) the plaintiffs' attorneys' fees and expenses as approved by the court; and (7) "incentive awards" of $10,000 to the 10 class representatives (i.e., the named plaintiffs).

Trucking companies had until Oct. 15 to file written objections; however, none were filed before or after the deadline.

According to Pilot Flying J, prior to today's hearing, it had already sent checks to customers who were found to be owed money during the internal audit, including 4-percent interest. An additional 2-percent interest will be paid, to bring the total interest to 6 percent as provided in the settlement.

"The settlement is fair in light of the substantial risk and burden on the plaintiffs had they been forced to litigate the case," the company said. "The negotiated settlement provides compensation to the class members promptly, and with the oversight of the independent accountant and the court."

As of Nov. 22, there were only 146 "opt-outs" of the class consisting of approximately 5,500 members. Treating affiliated companies as a single entity reduces the effective number of opt-outs to 60, the company noted.

Family-owned Pilot Flying J has 650 locations across the United States and Canada.