Pilot Trial Witness List Includes Haslam, Federal Agents

By Walter F. Roche Jr.

The potential witness list in an Ohio suit against Pilot Flying J includes Cleveland Browns owner James A. Haslam 3rd and two federal agents involved in a lengthy criminal probe of the nationwide truck stop firm.
The potential witness list filed late last week in Franklin County Court by attorneys for three trucking firms lists over 90 persons ranging from former Pilot executives who have already entered guilty pleas to unnamed confidential sources cited by federal agents in a filing in U.S. District Court in Knoxville, Tenn.
The filings comes in a civil suit filed by HB Logistics, FST Express and Dick Lavy trucking charging that Pilot cheated them out of millions of dollars in promised rebates and diesel fuel price reductions.
Pilot's lawyers along with co-defendants in the case also have filed potential witness lists including current Pilot employees and outside experts.
The Ohio suit is one of two civil claims currently pending against Pilot. A second is pending in Mobile, Ala., where Wright Transportation has asked a judge to order Haslam,  who heads Pilot, to undergo questioning.
Both actions stem from allegations that Pilot sales executives routinely and systematically cheated truckers out of promised rebates. Those allegations were spelled out in a lengthy affidavit filed in federal court in Knoxville over three years ago.
The affidavit was signed by FBI Agent Robert Root. Root and IRS agent Kevin McCord are both on the trucking firms' potential witness list.
The witness list filing states that it includes "all witnesses who plaintiffs may call as witnesses at trial or hearing in this case."
In addition to former Pilot staffers who have already entered guilty pleas like Arnold Ralenkotter, the list includes several other former employees who were recently indicted. They include former Pilot President Mark Hazelwood, who has entered innocent pleas to wire fraud and witness tampering charges.
Also included is former Pilot Vice President John Freeman who, like Hazelwood, was recently indicted and has entered an innocent plea to mail and wire fraud charges.
Still others listed include CHS1 and CHS2, confidential government informants cited in the Root affidavit.
The rebate fraud charges already have proven costly for Pilot with the combined cost of settling suits by other truckers and the federal government totaling over $175 million.
Attorneys for the trucking companies stated in the filing that they were reserving the right to supplement the witness list at a later date.
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Haslam Had Direct Involvement, Trucking Firm Charges

By Walter F. Roche Jr.

Evidence uncovered in a federal lawsuit showed Cleveland Browns owner James A. Haslam 3rd's "direct involvement" in targeting an Alabama trucking firm for "large scale pricing fraud," according to a motion filed today in Mobile, Ala.
The motion filed for Wright Transportation of Mobile also charges that Haslam's recent claim that he was willing to be deposed in connection with rebate fraud charges against Pilot Travel Centers was a publicity stunt.
"Haslam continues to dodge and delay as he has for the past three years," the filing states.
The filing, which comes before a scheduled Friday hearing, is the latest development in a handful of remaining lawsuits stemming from a federal probe of charges that the Haslam family owned truck stop chain routinely cheated truckers out of millions of dollars in promised diesel fuel rebates.
Haslam's promise to agree to a deposition came with a series of conditions and the Wright brief charges that those conditions would delay any deposition until late this year or early next year.
Noting that Haslam has never agreed to a specific timetable for a deposition, the filing states Haslam now "apparently intends to run out the clock."
 The motion calls on Mobile Judge Sarah Hicks Stewart to issue a second order calling for Haslam to be questioned under oath within 30 days. An earlier order for a May 11 deposition was temporarily set aside.
Responding to a joint motion filed by Haslam, Pilot and other defendants, Wright charged that during five months of discovery while the case was still in federal court "Wright uncovered Haslam's knowledge and direct involvement with (former Pilot President Mark) Hazelwood in targeting Wright and engaging in large scale pricing fraud involving thousands of transactions and massive losses."
Haslam has repeatedly denied any knowledge of the scheme to cheat on diesel fuel rebates.
Wright argues that it needs to question Haslam to pursue charges already leveled against former President Hazelwood.
"Haslam is the only person Hazelwood reported to," the filing states, noting that trucking executive is just about the only person involved in the case who has not either pleaded guilty to federal charges or been recently  indicted, as Hazelwood has.
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Haslam Wants Lengthy Delay in Any Deposition

By Walter F. Roche Jr.

Lawyers for Cleveland Browns owner James A. Haslam 3rd claim he will agree to a limited deposition but the conditions attached to the offer would delay any questioning for months.
In a court filing Friday and in a letter to the attorney representing an Alabama trucking firm, Haslam's lawyer said his client would agree to be deposed but only after a related appeal pending in federal court is resolved.
The action comes in a series of civil suits filed by truckers who have charged that the Haslam family owned truck stop firm known as Pilot Flying J, secretly reduced promised rebates.
That federal case is not even scheduled for oral arguments before a panel of federal judges until the week of  July 11. In addition Haslam's offer would delay the deposition until at least 45 days after the federal court actually issues a decision in that case.
The offer comes as Haslam is facing demands that he appear to answer questions under oath in suits filed by four trucking companies in Ohio and Alabama.
In the letter to Stephen Tunstall, the attorney for Wright Transportation, Washington, D.C. attorney Stephen D. Brody said several other conditions would have to met before Haslam would undergo questioning including a seven-hour one day limit on questioning and allowing only one attorney to represent all four trucking companies.
"Mr. Haslam does not believe a deposition is warranted in either case," Brody wrote.
"We are disappointed in this gamesmanship, but eager to put it behind us," Brody added.
The offer comes as courts in Alabama and Ohio have been asked to require his testimony in the suits filed by trucking companies who have charged Haslam's Pilot Travel Centers has cheated them out of millions of dollars in promised diesel fuel rebates.
In the Alabama case Haslam already had been ordered to testify but his lawyers gained a postponement until after a hearing scheduled later this month.
In addition to Wright, claims have been filed in an Ohio case for FST Express, HB Logistics and Dick Lavy Trucking.
Pilot already has paid some $175 million to settle claims by other trucking companies and the federal government.

Judge Strikes Indictments From Pilot Civil Trial

By Walter F. Roche Jr.

An Ohio judge has ordered that a filing detailing the indictment of former Pilot Travel executives in federal court in Tennessee be stricken from the record of an ongoing civil case against the truck stop chain.
In a brief ruling issued Thursday, Franklin County Judge David C. Young granted the motion filed by Pilot to have notice of the recent indictments stripped from the record. The action comes in a suit brought by three trucking firms that have charged Pilot with cheating them out of promised rebates.
Lawyers for the trucking firms had filed notice of the recent indictment of eight former Pilot sales staffers by a federal grand jury in Knoxville, Tenn.
Pilot's lawyers had argued that the notice was improper and not germane to the civil litigation. Lawyers for FST Express, Dick Lavy Trucking and HB Logistics argued that the indictments demonstrated Pilot's improper method of handling rebates.
"The court finds Pilot''s arguments persuasive," Young wrote. "There is no basis in the civil rules to support this finding."
He wrote that the notice "provides nothing that has not already been complained of in the complaint which could be brought out in testimony if relevant and admissable."
Young also noted that he will hold off ruling on other pending motions in the case including a request to force Pilot owner James A. Haslam 3rd to testify in a deposition, until he rules on a pending motion to dismiss the suit.
The three firms have charged that Pilot routinely cheated them out of promised rebates on diesel fuel purchases.
The suits were triggered by the same federal probe that produced the recent indictments.

Truckers Seek Pilot Fraud "Paper Trail"

By Walter F. Roche Jr.

Ohio trucking companies want a judge to order Pilot Flying J to turn over computer files they claim will provide a "paper trail" of fraudulent transactions used to cheat them out of millions of dollars in promised diesel fuel rebates.
In a motion filed this week in Franklin County court, lawyers for the three firms are asking the judge to compel Pilot to turn over the records of a computer software program called "SalesForce," which provides details on the handling of Pilot's rebates.
"SalesForce entries expressly detail the fraud scheme," the motion states.
The motion to compel is one of the latest developments in the handful of remaining civil cases against the truck stop firm stemming from a federal investigation that already has produced guilty pleas from 10 former Pilot sales staffers.
Pilot, meanwhile, is asking the same Ohio judge to deny another motion by the trucking firms to depose Pilot's top executive James A. Haslam 3rd.
In the motion to force the disclosure of computer records, the trucking firms, HB Logistics, FST Express and Dick Lavy Trucking, argue that the data will show the specific involvement of two former Pilot executives, John Freeman and John Spiewak, who dealt with their accounts.
"Sales Force contains a paper trail of the fraudulent statements Pilot employees made to customers," the motion states.
"With so many Pilot employees telling so many lies to so many customers, Pilot needed an up-to-date tool to track the lies," the motion adds.
Thus far, according to court documents, Pilot has refused to provide the data contending that it contains information not relevant to the three companies and that compliance would be overly burdensome.
The truckers contend that the damages suffered from the fraud claims alone total an estimated $1.9 million.
In addition to the Ohio cases, Pilot is facing a suit in Alabama filed by Wright Transportation. In that case a judge in Mobile is scheduled to hear arguments on May 13 on Pilot motions to end the suit.
The judge, however, has denied a motion by Haslam's attorneys to rescind an order that he undergo a deposition.
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Browns' Owner Fights Deposition in Ohio Rebate Suits

By Walter F. Roche Jr.

Having won a temporary reprieve from a deposition ordered by an Alabama judge, Cleveland Browns owner James A. Haslam 3rd is asking an Ohio judge to deny a motion to force his testimony in a separate suit brought by three other trucking companies.
Lawyers for Haslam this week filed a motion to block a deposition requested by three trucking firms that have charged that Haslam's Pilot Flying J truck stop firm routinely cheated them out of promised rebates.
In the suit in Franklin County Ohio the truckers last week said Haslam's testimony was essential and they asked for an order that would require Haslam's appearance at a deposition on May 11 in Knoxville, Tenn.
Haslam's lawyers responded by arguing that Haslam had no personal knowledge of the alleged rebate fraud scheme and that requiring his testimony would be unduly burdensome.
Just last week an Alabama judge rejected an appeal by Haslam of an earlier order requiring his appearance at the May 11 deposition. The judge did, however, agree to hear additional arguments on May 13 by Pilot's lawyers in the suit brought by Wright Transportation and to put off the scheduled deposition temporarily.
In the Ohio case brought by HB Logistics, FST Express and Dick Lavy Trucking, Haslam's lawyers stated that the May 11 deposition "has been deferred by the court in Alabama and it is unclear when or if that deposition will be rescheduled."
Haslam, the motion continues, "had no involvement with plaintiffs' accounts and he is a third party to the lawsuit."
Haslam's lawyers also argued that any deposition of him would be premature because there are pending motions before the court that could end the suit.
"Plaintiffs should not be permitted to depose Pilot's most senior executive when it is clear he does not possess unique firsthand knowledge regarding plaintiff's allegations," the motion states.
The deposition battle is the latest development in a handful of remaining civil suits stemming from charges that Pilot sales executives oversaw a longtime scheme to cheat truckers out of promised rebates.
The allegations already have cost Pilot more than $175 million to settle claims by other truckers and the federal government.
Ten former Pilot executives already have entered guilty pleas to mail and wire fraud charges and more than a half dozen others, including former President Mark Hazelwood, have been indicted and await trial.