October 21, 2014

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Lawsuits against Pilot Flying J could be consolidated

NASHVILLE, Tenn. (AP) — A dozen federal lawsuits against the truck stop chain run by Cleveland Browns owner Jimmy Haslam could be consolidated before a single judge.

The cases stem from a federal investigation into alleged rebate fraud by the sales team at privately held Pilot Flying J, the country’s largest diesel retailer.

Various plaintiffs have asked for the cases to be shifted to federal courts in northern Ohio, southern Mississippi or middle Tennessee.

Pilot wants the cases to be heard in Knoxville, where the company is based and where most of the defendants live. Nineteen of 35 employees mentioned in an FBI affidavit released following the April raid on Pilot headquarters live in Tennessee, according to the company.

Pilot said it would also agree to having the cases heard in Nashville or Chicago.

Consolidating and transferring the cases would help avoid duplication, inconsistent rulings and an “unseemly race to judgment,” Pilot said in a legal filing late last week.

The federal lawsuits against Pilot have been filed in Arkansas, Alabama, Mississippi, Illinois, Florida, Ohio and Tennessee. A federal panel on multidistrict litigation is scheduled to hear oral arguments on consolidating the cases in late July.

Several other lawsuits have been filed in state courts.

Five members of the Pilot sales team have pleaded guilty to mail fraud charges and are cooperating with federal prosecutors. Jimmy Haslam, the brother of Tennessee Gov. Bill Haslam, has said he was unaware of the alleged conspiracy to defraud trucking company customers until he read the FBI affidavit.

The governor, who was president of Pilot until he was elected Knoxville mayor in 2003, retains an undisclosed financial stake in Pilot, but has no active operational role in the company with annual revenues of $31 billion.

But connections to the family business persist. Haslam this week shrugged off questions about a Pilot board member overseeing a company that is seeking coal mining rights on public land in Tennessee.

Hillsborough Resources, a subsidiary of the Vitol Group, has been negotiating to mine coal within the Catoosa Wildlife Management Area near Crossville. The president and CEO of Vitol’s North and South American operations, Mike Loya, serves on the Pilot board.

Haslam told The Associated Press that he doesn’t know Loya personally. A spokesman added that the governor has had no interaction with any of the parties involved in the negotiations.

A Vitol representative did not return a message seeking comment.

Tom Ingram, a close adviser to both the governor and Pilot, faces an Aug. 1 hearing by the Tennessee Ethics Commission over his failure to register as a lobbyist on behalf of Hillsborough.

Ingram called the link to the Pilot board member “a coincidence that has absolutely no relationship to the issue.”

“I don’t think we even knew when we started working for them, and it’s been totally irrelevant since,” he said.

Ingram ran Haslam’s 2010 gubernatorial campaign and has also coordinated the company’s public response to the federal investigation into Pilot.

Haslam announced Tuesday that he will soon begin paying Ingram out of his re-election campaign account instead of through personal funds. Ingram said he has no plans to stop advising Pilot once that occurs.

Haslam said he’s not worried about advisers having multiple roles.

“That’s just how life works a lot of time,” Haslam said. “Look, there’s a whole lot of lobbyists who represent a whole lot of different people.”

“There’s just a lot of people who have overlapping interests,” he said.