Headlines

Haslam’s Pilot Flying J company settles fraud lawsuits out of court

The Knoxville news today reported that Jimmy Haslam’s Pilot Flying J corporation has reached an agreement to settle fraudulent fuel rebate lawsuits out of court. The settlement, which was agreed to by federal judge James M. Moody in Arkansas involves the full repayment of all money owed to individual trucking companies plus six percent interest. Pilot Flying J will also cover the legal expenses of those companies, which could end up being all 4,500 enrolled in the rebate program to some extent.

Haslam released a statement saying that his customers “will get every dollar they are owed, with interest, without protracted legal battles, time delays or costly legal expenses.”

Cleveland.com reports that the agreement could cost Pilot Flying J upwards of $40 million for the fuel shortages, and another $14 million dollars in legal fees.

This doesn’t absolve Pilot Flying J of any legal ramifications. There is an ongoing federal investigation.

[Related: Federal Grand Jury investigating Pilot Flying J]

  • Garry_Owen

    It certainly does absolve PFJ of a significant amount of legal ramifications. It’s a big deal to not have those civil lawsuits still pending. It’s half the battle.

  • JHop

    I’m no legal expert, but aren’t the FBI proceedings the only ones that truly matter? The civil suits were always going to be about reimbursement anyways, but the federal case could have significant ramifications in terms of a federal government and NFL standpoint, right?

  • Garry_Owen

    Civil suits would involve all sorts of “damages.” Actual damages (i.e., the lost rebates themselves and the accompanying interest) would comprise just a portion of the losses that PFJ could have suffered. There’s no way* PFJ would have settled for just the actual damages unless they were facing monumental additional damages. The worst damages would have been punitive, which could have effectively shut down the business. That would have been “as” damaging, though not in the same way, as a criminal conviction might be. In that way, I’d say the civil suits – as a legal issue – absolutely matter. If you consider the different standards involved in the civil cases versus a criminal charge (i.e., the burden of proof), the civil damages were also the far-more “likely” damages to occur. Avoiding these is HUGE. It can’t be understated.

    * Of course, PFJ could have just elected to do the right thing; which is what Haslam has been saying all along.

  • Garry_Owen

    And yes, the federal case (if it happens) could still have significant ramifications. I don’t have a good guess what those might be, particularly as they relate to the NFL, but they could be significant. The government’s burden, as in all criminal cases, is high, though. The risk to PFJ in the civil cases was arguably higher, and avoiding this risk by paying $54 million (plus the critically important legal fees!!!!), was a wonderful investment.

  • JHop

    From PFJ’s standpoint the civil suit settlement is huge, and I get that.

    The point I was trying to make was: if I’m Roger Goodell, as Commissioner wouldn’t I be more upset – in terms of protecting the shield and keeping Haslam as owner – at the result of a federal suit as opposed to a civil one?

  • Ezzie Goldish

    Also half to remember that by not having the civil cases go on it incredibly decreases the likelihood of evidence or testimony from them being used in the federal case. (Regardless of how innocent or guilty Haslam might be, this works to his advantage.)

  • Garry_Owen

    Oh sure. I would think so; though a crippling civil lawsuit could have made Haslam’s ownership of the Browns untenable. Notsomuch an issue of protecting the shield, but it would have damaged the league.

  • Garry_Owen

    True, but those witnesses (and evidence) are still available.

  • Ezzie Goldish

    Granted. But nobody wants two cases going on simultaneously, and it’s much less likely that companies will be volunteering to put their people up there for the FBI’s sake than for their own.

  • Natedawg86

    *If they have a receipt

  • Garry_Owen

    Absolutely.

    [The U. S. Attorney will still “volunteer” them, though!]

  • Ezzie Goldish

    * Of course, PFJ could have just elected to do the right thing; which is what Haslam has been saying all along.

    Imagine if Haslam has actually been telling the truth this entire time (that he didn’t know) and he’s actually paying everyone back appropriately in this way. Think media would ever consider him the incredibly good guy he actually would be? Or it’s too late, he’s already Mr. Evil simply because he’s the CEO of a huge company?

  • Garry_Owen

    That is to me the most interesting component and question in this case.

    Is it within the realm of possibility that Haslam has been telling the truth? Absolutely. Probability may be a different animal, but it is completely possible. Now, that won’t absolve PFJ of any criminal liability if someone else high up in the company did know, but it certainly would go a long way toward his personal credibility.

    Will the media accept it? I doubt it. It’s not sexy to say that a guy is as honest as he claims to be, particularly when the guy’s an admitted “one percenter corporate monster.”

  • Ezzie Goldish

    Exactly. 🙂

  • matt underwood

    this has about as much chance of happening as the tribe trading me for matt garza.

  • Harv 21

    fab point. The whole tenor of a criminal case can be different when critical witness testimony has already been “locked in” under oath in civil depositions.

    Another point I didn’t see made elsewhere is that the plaintiffs include a lot of smaller business concerns which are probably thrilled to get money now rather than wait years in the hope of additional interest/punitive damages while case expenses pile up. This is win/win.

  • Vagabond

    It’s still fishy that this never came to light when Haslam was cavorting with the yinzers. Then, once out of the Rooney Protection Bubble, BAM! the feds seize the place.

    /straightens foil hat