Friday, January 8, 2016
Pilot Appeals Ruling in Rebate Case
By Walter F. Roche Jr.
Pilot Flying J and its chief executive are moving on two fronts to block a suit in Alabama state courts which charges the company with cheating an Alabama trucking firm out of promised rebates.
Lawyers for Pilot and James Haslam, the truck stop chain's top executive and Cleveland Browns' owner, filed an appeal of a federal court ruling and asked a Mobile County court to either dismiss or stay action on the suit filed by Wright Transportation.
The Wright case is one of a handful remaining following disclosure of a federal probe of allegations that Pilot secretly and systematically reduced rebates promised to purchasers of the chain's diesel fuel.
In the appeal filed with the 11th Circuit Court of appeals, Pilot asked that the Oct. 25, 2015 decision of U.S. District Judge William H. Steele be reversed. Steele dismissed the Wright suit, leaving the trucker free to pursue the same claims in state courts.
The appeal filed jointly in behalf of Pilot, Haslam and former Pilot sales executive John Freeman, contends that under the Class Action Fairness Act, Steele was required to maintain jurisdiction over the case.
"Once original jurisdiction was conferred, it could not be divested by subsequent events," the 42-page brief states.
Freeman was featured prominently in secretly recorded Pilot sales meetings in which the rebate skimming scheme was detailed. Transcripts of those meetings were filed in U.S. District Court in Tennessee. Ten former Pilot executives have entered guilty pleas to charges stemming from the rebate probe. Freeman has not been charged.
Wright had concluded that he did have the discretion to dismiss the case. He noted that the case no longer had class action status and that several of Wright's claims, including racketeering charges, had already been dismissed.
Pilot, however, argued that Wright should not be allowed to re-litigate the case in state court after it had proceeded in federal court for some two years.
Citing multiple depositions and discovery requests, the motion states that Pilot had also provided Wright more than 27 gigabytes of data in the federal litigation.
"The district court erred because original jurisdiction under CAFA extended to the entire law suit - including each of the asserted claims - at the time Wright filed the suit, "the appeal states.
Wright, the filing concludes, "should not be allowed to force defendants/appellants to litigate this case for two years in federal court and then, near the end of substantial discovery, start over in state court."
In the filing in Mobile County court, Pilot asked that the state suit be dismissed under the provisions of a state law that protects parties from facing litigation on the same issues in state and federal courts.
Meanwhile, court records in Ohio show that one of four remaining suits against Pilot has been settled. A notice of voluntary dismissal with prejudice was filed by attorneys for Dick Lavy Trucking. Also settled was a suit filed in Illinois against Pilot by JF Freight
Still alive are suits against Pilot in Franklin County Ohio court by FST Express and HB Logistics. HB's claims include claims by a third firm, McGriff Transportation, which assigned its rights to HB.
The rebate allegations have cost Pilot some $176 million. The company paid $84 million to settle a class action suit in Arkansas and paid $92 million to settle civil charges with the federal government.