Pilot Flying J Settlement Granted Final Court Approval
Retailer will pay all unpaid discounts plus 6%
Published in CSP Daily News
KNOXVILLE, Tenn. -- At a hearing conducted on Monday, U.S. District Judge James Moody granted final approval of the class-action settlement of retailer Pilot Flying J’s alleged fraud in the fuel retailer’s rebate and discount programs.
The court had previously granted preliminary approval of the settlement, and the hearing on Monday included a review of what had transpired since then, including the implementation of those steps required by the court under its earlier orders.
The law provides the court should approve a class-action settlement only if the settlement is found to be fair, reasonable and adequate. By granting final approval at Monday’s hearing, the court found that the settlement met this standard.
The specific terms of the settlement include the following:
- The settlement guarantees payment to Class Members of every penny of unpaid discounts they are owed, plus 6% interest.
- The payments are to be mailed to each recipient within 30 days after the amount owed is finally calculated, or 30 days after the court’s final approval of the settlement (whichever is later).
- Notice will also be mailed to those Class Members who are not owed anything, and if they disagree for whatever reason, there are mechanisms in place for them to seek further review.
- A court-approved independent accounting firm (Horne LLP) has been retained to review the procedures and protocols that PFJ’s Internal Audit Department used to calculate settlement payments, and to conduct a statistical sampling of accounts to verify the accuracy of Internal Audit’s conclusions. The independent accounting firm has already been conducting its review for some time.
- Class Members can also ask Horne to review their particular accounts.
- If dissatisfied with Horne’s findings, Class Members can hire their own accountants to audit their accounts and then ask the court to rule on any disputed amounts.
- The settlement includes a permanent injunction prohibiting PFJ from ever improperly withholding rebates or discounts in the future.
- Under the settlement, PFJ will pay: (1) 100% of unpaid discounts the Class Members are owed, plus 6% interest; (2) the cost of providing notice of the settlement; (3) the fees and expenses of the Class Administrator; (4) the cost of the internal audit; (5) the fees and expenses of the independent accountant, (6) the plaintiffs’ attorneys’ fees and expenses as approved by the Court; and (7) “incentive awards” of $10,000 to the ten class representatives (i.e., the named plaintiffs).
No written objections were filed by the Oct. 15 deadline, nor were any objections filed after the deadline.
Prior to Monday’s hearing, Pilot Flying J had already sent checks to customers who were found to be owed money during the internal audit, including 4% interest. As to those accounts, an additional 2% interest will be paid to bring the total interest to 6% as provided in the settlement agreement.
The settlement is fair in light of the substantial risk and burden on the plaintiffs had they been forced to litigate the case. The negotiated settlement provides compensation to the Class Members promptly and with the oversight of the independent accountant and the court.
As of Nov. 22, there had only been 146 “opt-outs” out of a class consisting of approximately 5,500 members. Treating affiliated companies as a single entity reduces the effective number of opt-outs to 60.
This means that the effective number of opt-outs represented no more than roughly 1% of the total class.