Pilot Flying J May Contact Customers Over Rebate Issue

Published in CSP Daily News

Judge denies request for restraining order, witness tampering charge

KNOXVILLE, Tenn. -- Circuit Court Judge Harold Wimberly on Monday denied a trucking company's charge of witness tampering and its request for a restraining order that would have prevented Pilot Flying J from contacting its own customers concerning the rebates that have been the subject of a federal investigation.

Attorneys for Georgia trucking firm Atlantic Coast Carriers had asked the court to forbid Pilot Flying J from contacting trucking companies to determine if there was an underpayment in their rebate for diesel fuel purchases.

Pilot Flying J CEO Jimmy Haslam has denied any knowledge of federal allegations that Pilot Flying J underpaid some of the company's trucking company customers rebate money they were owed. Following an FBI raid in mid-April, he announced last week that the company would audit every one of its trucking customer accounts to determine if there was an underpayment.

"We are delighted with the judge's decision today," Tom Ingram, a spokesperson for the Knoxville, Tenn.-based truckstop chain, said after the judge made his ruling. "There was absolutely no proof of any wrongdoing on the part of Pilot Flying J or its CEO, Jimmy Haslam."

Ingram said the idea that Pilot Flying J should not talk to its customers "is outrageous and would have crippled Pilot's ability to do business."

He added, "Equally outrageous is the notion that the CEO of a company should not be able to reach out to his customers and say, 'If we've shortchanged you in any way, we apologize and will correct it and pay you 100% of what you are owed, no more and no less.'"

Knoxville attorney Albert Harb of the firm Hodges, Doughty & Carson argued Pilot Flying J's position. In his filing, Harb said that, contrary to the plaintiff's claims, Pilot Flying J had not sought any legal releases from the customers it contacted and that the requested restraining order, if enacted, "would have the practical effect of shutting down [the] defendants' business and creating havoc throughout the entire trucking industry in the United States."

Further, Harb argued that Pilot Flying J's customers "deserve to be paid what they are legitimately owed, no more or no less." He said the attempt to restrain the company from doing that is "a classic example of 'no good deed goes unpunished'."

Harb said the requested restraining order would prevent the company, the largest owner of travel centers and travel plazas in the country, from communicating with its customers even if the customers initiated the contact. "The law does not support such a ridiculous and absurd result," Harb's filing stated.

In his oral arguments, Harb invoked Pilot Flying J's constitutional rights to free speech and association.

The judge ruled in Pilot Flying J's favor.

Haslam said that he had spoken with managers of several trucking companies and planned to personally meet with them to address issues raised in secretly recorded conversations among Pilot's sales staff. Atlantic Coast Carriers attorneys Mark Tate said they feared those calls and visits were designed to keep potential plaintiffs from joining the lawsuit, said an Associated Press report.

Tate stressed that while his side lost the motion, Pilot and Haslam acknowledged that arrangements with customers do not release the company from liability.

Ingram said there was never any dispute about that question. "That's what we said from the very beginning," Ingram said. "They're desperate for a point if that's one they claim, because we've said that from the very beginning, repeatedly and consistently."

Tate said the lawsuit will proceed independently from any criminal charges that might be filed following the FBI raid. Next steps include subpoenaing executives--including Haslam--and records, he said.

"These cases are not going away," Tate said. "We look forward to continuing to add new named plaintiffs and holding Haslam and his company full accountable to those he and they harmed."

Meanwhile, major Pilot shareholder CVC Capital Partners has issued a statement expressing confidence in Haslam's leadership at the company and in the steps he has taken since the raid to examine any potential wrongdoing:

"CVC is a substantial investor in Pilot Travel Centers and CVC representatives serve on Pilot's board of directors. Pilot announced on April 22 steps it is taking in connection with an ongoing federal investigation of the company. CVC fully supports these steps, and will remain engaged with and supportive of the company, consistent with our role as an investor. CVC has been an investor for a number of years and Pilot and the Haslam family have demonstrated integrity and strong character in our dealings with the company."

Luxembourg-based CVC purchased a 47.5% share in Pilot in 2008, two years before the takeover of rival Flying J. CVC's stake is now down to less than 20%, said AP.