Judge Nixes Racketeering Charges Against Pilot Flying J
Published in CSP Daily News
Among those dismissed in civil suit brought by Alabama trucking firm
KNOXVILLE, Tenn. -- In a major legal victory for Pilot Flying J, a federal judge has dismissed racketeering and deceptive trade practices charges in a civil suit brought by an Alabama trucking firm in the wake of a federal probe of an alleged multimillion-dollar rebate scheme, reported WBIR.
In an eight-page ruling issued Friday, U.S. District Judge William H. Steele dismissed eight counts in a suit filed by Wright Transportation of Mobile, Ala.
Since the FBI and IRS raided Pilot Flying J headquarters in Knoxville, Tenn., on April 15 to investigate the alleged scheme to cheat trucking companies out of rebates for diesel fuel purchased at the chain's more than 650 truckstops, seven Pilot Flying J employees have pleaded guilty in federal court to fraud-related crimes and nearly 30 trucking companies have filed lawsuits. At least 11 former employees already are cooperating with the FBI and offering evidence. Seven of them have entered guilty pleas to fraud charges, and four have obtained immunity from prosecution in return for their cooperation.
The judge did let stand some of the charges against some of the defendants (including CEO Jimmy Haslam), including breach of contract, but he dismissed more than half a dozen. He dismissed an "unjust enrichment" charge against Pilot Flying J, but it was left standing for further consideration against the other defendants, said the report.
Under the ruling, Steele said that Wright's lawyers could seek to refile some of the dismissed counts by a later amendment.
According to the news outlet, Aubrey Harwell, Pilot Flying J's attorney, said the judge's decision was "well based in fact and law," adding, "We are delighted."
The ruling in the case follows the settlement of several other cases in a class-action suit filed against Pilot in Arkansas. U.S. District Judge James A. Moody approved that $85 million agreement on Nov. 25.
In the ruling Friday, Steele rejected Wright's claims that it could base a racketeering charge simply by providing a copy of the 120-page FBI affidavit.
"The affidavit does not reference the plaintiff at all," Steele wrote. "The plaintiff cites no authority at all, much less any authority, indicating that the complaint alleges fraud with adequate particularity."
Calling the plaintiff's failure to present adequate evidence of the Racketeer Influenced & Corrupt Organizations (RICO) Act racketeering "complete," Steele said he did not even need to address any of Pilot Flying J's other arguments to dismiss racketeering charges; however, Steele rejected Pilot Flying J's arguments that the breach of contract charges should be dismissed, stating it was "difficult to imagine what could be missing from them."
"The parties agreed to set a discount to be honored by rebate, and Pilot Flying J breached the agreement by rebating less than the fully agreed discount," Steele wrote.
Steele did cite the Arkansas settlement and said its approval made it impossible for Wright to proceed with class-action claims in the Alabama suit.
Pilot Flying J has more than 650 retail locations and is the largest operator of travel centers and travel plazas in North America. Its network provides customers with access to more than 60,000 parking spaces for trucks, more than 4,400 showers and more than 4,000 diesel lanes, of which more than 2,800 offer diesel exhaust fluid (DEF) at the pump.