Haslam Deposition Location Switched

By Walter F. Roche Jr.

The location of the scheduled deposition of Cleveland Browns owner James "Jimmy" Haslam has been switched just days before it is set to occur.
Papers filed in Franklin County Court in Ohio show the questioning by trucking company attorneys will take place in a hangar at the McGee Tyson Airport in Alcoa, Tenn.
According to the filing the change was made at the request of Haslam. Originally the deposition was scheduled to take place Tuesday in a Knoxville law firm office.
The questioning, which will begin at 9:30 a.m., comes in a suit filed by trucking companies who have charged that the Haslam family owned truck stop firm cheated them out of millions of dollars in promised diesel fuel rebates.
The trucking firms have been trying for over a year to get Haslam's under oath testimony on the fuel rebate charges. He has stated repeatedly that he did not know about the scheme by Pilot sales executives to cheat unsuspecting truckers out of their promised rebates.
Ten former Pilot executives already have entered guilty pleas to charges relating to the rebate skimming scheme which was uncovered during a federal grand jury investigation.
According to the court notice Haslam's deposition will take place in a Pilot hangar at the Alcoa airport.
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AL Pilot Rebate Suit Back in Federal Court

By Walter F. Roche Jr.

A federal appeals court has ruled that one of the two remaining rebate fraud suits against Pilot Flying J must be heard in federal court in Alabama.
In a 15-page ruling the 11th Circuit Court of Appeals overturned the decision of a district court judge who had dismissed the suit, citing a lack of federal jurisdiction. The original suit was filed in federal court by Wright Transportation of Mobile, Ala, in the wake of the disclosure of a federal probe of Pilot Flying J's diesel fuel rebate practices.
The appeals court concluded that the federal court retained jurisdiction even though all federal claims under the Class Action Fairness Act (CAFA) had been dropped or dismissed and only state law claims remained.
Pilot's attorneys had argued the case should remain in federal court, while Wright sought dismissal so the claims could be pursued in state court.
Steve Brody, a Pilot attorney, said the decision puts the case in federal court where it belongs. Charging that Wright apparently thought the litigation would bring a windfall, Brody added, "We hope the 11th Circuit decision dispels that unrealistic belief."
The decision will end the ongoing litigation in Alabama state courts, but will apparently have no effect on separate litigation against Pilot in Franklin County Circuit Court in Ohio.
In that suit brought by FST Express and HG Logistics, Pilot CEO and Cleveland Browns owner James A. "Jimmy" Haslam has been subpoenaed for a Dec. 13 deposition where he is expected to be questioned about his knowledge of the rebate fraud scandal. He has consistently denied any  knowledge of the scam.
Knoxville, Tenn. based Pilot already has paid some $175 million to settle claims by other trucking firms and the federal government. Ten former Pilot sales executives have entered guilty pleas to mail and wire fraud charges as a result of a federal grand jury probe of the rebate fraud. Eight others former Pilot staffers have entered not guilty pleas and await trial next year.
As the appeals court recounted in its decision, Pilot has been charged with systematically reducing promised diesel fuel rebates for truckers who sale staffers thought would not notice.
Citing prior decisions on the issue, the appeals court said that even though the class action claims were no longer part of the case, the federal court retained jurisdiction.
"We therefore conclude the CAFA continues to confer original federal jurisdiction over the state law claims in this suit," the ruling states.
"That jurisdiction continues to survive even after later events meant there would be no class action claims," the three judge panel concluded.

Jimmy Haslam Deposition Set for Dec. 13

By Walter F. Roche Jr.


Cleveland Browns owner James A. "Jimmy" Haslam will be questioned under oath on Dec. 13 on his knowledge of a rebate skimming scheme by sales executives at the Haslam family owned truck stop firm Pilot Flying J.
According to a notice filed in Franklin County Ohio court the deposition will take place in Knoxville, Tenn. and will be videotaped. It will be conducted at the law offices of Ritchie, Dillard, Davies & Johnson beginning at 9:30 a.m.
Haslam has repeatedly denied any knowledge of the multi-million dollar scheme, but he has never been questioned under oath.
Aubrey Harwell, a Nashville, Tenn. attorney who has represented the trucking firm, said in an email response to questions that Haslam would comply with any lawfully executed subpoena. Earlier this week a Pilot spokeswoman acknowledged that negotiations over a Haslam deposition were ongoing.
The deposition comes in a suit by two trucking firms, HB Logistics and FST Express, against Pilot, the largest truck stop firm in the country. They contend they are owed millions of dollars in promised rebates.
Haslam at first refused to agree to a deposition, but later said he would agree only if a series of conditions were met, including a time limit and final action on a related federal lawsuit.
HB and FST are two of the three trucking firms still pursuing the recovery of promised rebates on the purchase of diesel fuel which they claim were never paid. A third is pending in Mobile, Ala.
Ten former Pilot sales executives have entered guilty pleas to charges of mail and wire fraud as a result of a federal probe of the rebate scheme. Eight others have been indicted and are scheduled for trial next year. All eight have entered not guilty pleas.
Pilot already has paid some $175 million to settle claims by truckers and the federal government as a result of the investigation, which first became public when the FBI conducted a raid on Pilot's Knoxville headquarters on April 15, 2013.
According to a lengthy FBI affidavit filed in U.S. District Court in Knoxville, Pilot routinely cheated truckers out of promised rebates. Details of the scheme were learned from informants who secretly tape recorded sales meetings where the scheme was openly discussed.
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Haslam Deposition Due Next Month.

By Walter F. Roche Jr.



Cleveland Browns owner James A. Haslam will be deposed before the end of the year in an Ohio suit brought by trucking firms who are charging that the Haslam family owned Pilot Travel Centers cheated them out of millions of dollars in promised rebates.
In a statement issued Wednesday in response to questions, Pilot spokeswoman Rachel Albright said Haslam's lawyers were currently negotiating with the trucking firms to set final details for the deposition to be conducted in Knoxville, Tenn.
While noting that Haslam has asserted that his deposition was not necessary, Albright said he had agreed several months ago to be questioned under oath.
"As a result, we have been working with plaintiffs' counsel and expect Mr. Haslam's deposition to occur before the end of the year," the Pilot spokeswoman wrote.
Shawn Organ, an attorney for the plaintiff trucking companies, said that details of the deposition scheduling would be filed soon in the Franklin County court.
The disclosure comes on the eve of a key hearing in the case scheduled for Thursday before Franklin County Judge David C. Young.
Haslam has insisted that he had no knowledge of a scheme by Pilot sales executives to cheat trucking firms out of promised rebates.
His testimony is being sought in an Ohio suit brought by two truckers, FST Express and HB Logistics.
His testimony is also being sought in an Alabama suit brought by Wright Transportation. That firm also has charged that it was cheated out of promised rebates.
Court records in the Ohio suit show HB and FST also have issued a subpoena for records of Comdata, a fuel card company that acts as an intermediary between trucking companies and fuel suppliers.
The rebate cheating scandal already has proven costly for Pilot, the largest truck stop firm in the country.
The firm has paid some $175 million to settle charges in an Arkansas class action and claims by the federal government.
Ten former Pilot executives have entered guilty pleas to mail and wire fraud charges while another eight are scheduled to go on trial next year.
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Arguments Continue as Key Pilot Hearing Approaches

By Walter F. Roche Jr.

With a key hearing date approaching, Pilot Travel and two of its one time trucking customers are continuing to debate and they can't even agree when the debate should end.
Franklin County Ohio Judge David C. Young has set Nov. 17 as the date for a hearing on whether the two trucking firms, HB Logistics and FST Express, can get access to Pilot's SalesForce database.
The judge will also hear arguments on whether Pilot can file another response to the trucking firm's latest filings in support of its motion for access to SalesForce.
The arguments over arguments is but the latest development in two of the three remaining civil suits stemming from the charges that the Knoxville, Tenn. based truck stop firm routinely cheated diesel fuel customers out of promised rebates.
In the latest filing, lawyers for Pilot are charging that the truckers recent filing included a document that is confidential under a protective order issued in a federal court suit. In fact the document contains information from the SalesForce database on a company called Wright Transportation, an Alabama trucking firm.
Wright is the third firm still suing Pilot in an ongoing suit in Mobile, Ala.
In fact Pilot lawyers argue, the document proves their point: that truckers new that when Pilot told truckers they would be getting a discount based on the cost of fuel, those truckers knew that the cost wasn't Pilot's actual cost, but a cost based on an industry standard.
"Plaintiffs continue to contort the facts and law in an effort to justify their request to dig through the interactions with thousands of other customers," the filing states.
Pilot contends that the database contains confidential business information about the firm's dealings with hundreds of trucking firms that have nothing to do with the FST and HB transactions.
In earlier filings the FST and HB attorneys said the database is the key piece of evidence needed to prove that the Pilot rebate scheme went much deeper than has been revealed and totaled some $4 billion.
Pilot, however, charged the truckers "completely mis-characterize" the evidence, which actually supports Pilot's contention.
The rebate scheme already has cost Pilot some $175 million to settle claims from other truckers and the federal government. Ten former Pilot sales staffers have entered guilty pleas to mail and wire fraud charges. Eight more, including the former president, face a 2017 trial on similar charges. They have all pleaded not guilty.
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Truckers Say Database Key to $4 Billion Scam

By Walter F. Roche Jr.

Two trucking firms have charged that a database maintained by the country's largest truck stop chain is the key to uncovering the full details of a $4 billion rebate cheating scam.
In a 15-page filing in Franklin County Ohio Circuit Court lawyers for the two trucking firms, FST Express and HB Logistics, say that the database, known as SalesForce, is "the pivotal" issue in detailing how Pilot Travel "pulled off the largest fraud ever perpetrated in the trucking industry."
The filing comes after lawyers for Pilot asked the judge presiding over the case to strike from the record a single page from the disputed database. Pilot also wants the judge to block a motion by the trucking firms to force disclosure of the entire database.
The truckers contend that the full scope of the scheme to cheat truckers out of promised diesel fuel rebates has never been known but it dates back a decade.
The suit in Ohio is one of only two remaining civil suits pending since the rebate scheme became public when federal agents raided Pilot's Knoxville, Tenn. headquarters on April 15, 2013. Since that time 10 former Pilot sales staffers have entered guilty pleas to mail and wire fraud charges. Eight more face a 2017 trial on similar charges. They have all entered not guilty pleas.
In the Ohio case the trucking companies have charged that the scheme was even more lucrative for Pilot than charged by federal agents because Pilot inflated the price it actually had paid for the fuel in the first place.
Pilot has countered claiming the trucking firms knew the so-called base price was actually an industry standard.
In the filing this week the two truckers disputed that claim and said that the SalesForce database would prove that point.
"It (the database) will help plaintiffs refute Pilot's absurd suggestion that the amounts it admits it owes are merely the product of account discrepancies and not fraud," the filing states.
"The SalesForce entries tell the who, what, where, when, why and how of Pilot's long running  $4 billion fraud scheme," the filing charges.
The filing also asks the judge to reject Pilot's request to file yet another objection to the records request.
"Pilot is simply trying to have the last word," it concludes.
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Stay Granted in Alabama Pilot Suit

By Walter F. Roche Jr.

An Alabama judge has granted a stay to Pilot Travel and it chief executive James A. Haslam in a longstanding suit in which a trucking firm charges it was cheated out of millions of dollars in promised rebates.
The stay halts most proceeding in the case pending the results of a related appeal in federal court.
But the decision by Mobile County Circuit Court Judge Sarah Hicks Stewart does allow lawyers for Wright Trucking to continue discovery, including depositions of key figures including Haslam.
The owner of the Cleveland Browns, has thus far rebuffed efforts to take testimony under oath about his knowledge of the multi-million dollar rebate cheating scheme.
Haslam, however, has repeatedly denied any knowledge of the rebate fraud, but his company already has paid out some $175 million to settle claims from truckers and to settle a complaint filed by the federal government.
The Alabama suit is one of two remaining legal claims against Pilot. The other, filed by two other trucking firms, is pending in a Franklin County Ohio court. In both the Ohio and Alabama cases, lawyers have initiated attempts to force Haslam to testify.
Stewart denied the stay sought by Brian Mosher, another former Pilot sales staffer, because he failed to perfect his appeal and failed to answer the original complaint.
In the ruling this week Stewart gave Mosher additional time to file an answer.
The two pending suits and a now settled class action suit in Arkansas followed a raid on Pilot's Knoxville, Tenn. headquarters by the FBI. An FBI agent later filed an affidavit in federal court detailing a widespread scheme by Pilot sales staffers to cheat truckers out of promised rebates.
While dozens of trucking firms agreed to a settlement, Wright, FST Express and HB Logistics opted out of the settlement and decided to pursue their claims in state courts.
Ten former Pilot sales staffers already have entered guilty pleas to mail and wire fraud charges and another eight have entered not guilty pleas and face trial in Knoxville, Tenn. next year. A recent effort for a change of venue in those cases was denied.
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