NASHVILLE, Tenn. (AP) — The head of a group formed for the purpose of filing a lawsuit against a truck stop chain run by the family of Tennessee’s governor and the owner of the Cleveland Browns said Thursday it is not a shell corporation established to ensure the company reached a favorable settlement.
Pilot Flying J, the nation’s largest diesel retailer, last month agreed to settle the class-action lawsuit, filed in Arkansas by National Trucking Financial Reclamation Services LLC. The suit was filed in response to FBI allegations that members of the company’s sales force preyed on smaller trucking companies by reducing the amount of rebates they were owed.
Under the settlement, the company has offered to reimburse with interest all the money trucking companies were cheated out of since 2005.
Attorneys for trucking companies that have not joined in the settlement but are also suing Pilot called the agreement rushed and inadequate, and said it contained little more than what the company offered in the first place.
They also questioned the involvement of National Trucking, which itself isn’t eligible for the settlement because it is not a Pilot customer. In legal filings, they called it a “shell company.”
The Tennessean newspaper this week reported that National Trucking is run by Lane Kidd, the president of the Arkansas Trucking Association. Pilot is a member of the association and in the past has sponsored group events.
“National Trucking was not formed to resolve or settle this matter with Pilot and the other defendants,” Kidd said in a statement released Thursday. “It was formed to seek justice.”
National Trucking was founded four days after a federal judge unsealed a 120-page FBI affidavit detailing the allegations about the sales force. It filed the lawsuit two days later.
Federal agents raided Pilot’s headquarters on April 15. Seven sales employees have pleaded guilty, while two others have agreed to cooperate with prosecutors in exchange for immunity from prosecution. Pilot CEO Jimmy Haslam, who also owns the NFL’s Browns, has said he was unaware of the rebate scheme until he read the affidavit.
In his statement, Kidd said he had never met Jimmy Haslam and that he had no discussions with Pilot before filing the lawsuit.
He said he formed the corporation to represent trucking companies that didn’t want to file their own lawsuits, and that wish to remain anonymous.
“Many executives were interested in recovering any money owed them, but they were reluctant to be publicly involved,” he said.
Kidd said it is standard practice to found corporations for the purpose of representing other parties that have an interest in a lawsuit.
Brian Fitzpatrick, a law professor at Vanderbilt University who specializes in class-action litigation, agreed.
“It kind of mimics some of the advantages of the class-action system,” he said. “In the insurance industry, it’s ubiquitous.”
Fitzpatrick noted, however, that a judge could ask for more details about the companies that want to remain anonymous as part of a fairness hearing scheduled for later this year.
“There could be a concern the plaintiff has a conflict of interest and would not be a good representative for all the other trucking companies in the class, because they may have divided loyalties,” he said.