The president of the Arkansas Trucking Association defended his role Friday in the formation of a company that has agreed to a class-action lawsuit settlement with Pilot Flying J.

National Trucking Financial Reclamation Services LLC was incorporated in Arkansas by the trucking group’s Lane Kidd on April 22 and filed a lawsuit against Pilot Flying J on April 24, days after FBI allegations against the fuel company were made public. Court filings this month in Tennessee and Alabama by attorneys representing other companies suing Pilot alleged that National Trucking Financial Reclamation was nothing more than a “shell” being used to help Pilot.

Kidd, who has been president of the trucking group for the past 21 years, said he created National Trucking to help protect the identities of trucking companies that did not want to be listed as plaintiffs in a lawsuit against Pilot Flying J. Kidd addressed his role in incorporating National Trucking through a 1,047-word, 14-point statement released last week to the media in Tennessee and in a brief interview Friday with the Arkansas Democrat-Gazette.

“I really resent any implication that somehow I would do anything that would be beneficial to Pilot,” Kidd said. “I owe Pilot nothing.”

Pilot Flying J, on the other hand, is purported by the FBI to owe millions in rebate payments to trucking companies that participated in a rebate program. The fraud, according to the FBI, dates back to 2005. There are four types of agreements under which the purported fraud occurred. Sources familiar with the lawsuit filed by National Trucking said that at least four companies are involved and each would fall under one of the four categories.

Included in the proposed settlement, which Kidd called “very strong for the trucking companies,” are the payment of plaintiffs’ attorney fees, court costs and other expenses, plus 100 percent of the money shorted through the Pilot rebate program and 6 percent interest on money owed. There will be a fairness hearing on the proposal Nov. 25 in U.S. District Court.

Kidd said in his statement that the reluctance of trucking companies to file a lawsuit against Pilot Flying J is what led to the formation of National Trucking Financial Reclamation Services. Companies were reluctant to put their names on the lawsuit because trucking firms are “typically not litigious” and because some local companies believed “the allegations in the FBI affidavit might not be true,” Kidd said.

Pilot Flying J is facing eight lawsuits over its handling of the rebate program.

A report in the Tennessean called into question the relationship between Pilot Flying J and the Arkansas Trucking Association.

Pilot recently was one of the top sponsors of the group’s 2013 convention, and was one of 19 companies to hold “Gold Sponsor” status.

Kidd noted in the statement that he is not profiting from the formation of the company and said he will receive “no remuneration whatsoever.” All proceeds paid to National Trucking would be distributed to trucking companies that assigned claims to National Trucking. Kidd said companies that have asked for help through National Trucking requested to remain anonymous and he would not reveal their identities. This tactic is not unusual in other industries, Kidd said.

“Assignments are routine in many industries, including but not limited to, credit card companies, hospitals, and companies who have claims for money damages and who, for whatever reason, do not want to pursue those claims in court, themselves,” Kidd said in the statement. “So, they assign their claims to others, who do pursue those claims. There is nothing out of the ordinary with assignments.

“Assignments have been utilized in our judicial system dating back to the British legal system. For anyone to insinuate that there is something improper about a company assigning its claims to another so that justice may be served and recovery may be had, is wrong and misplaced. One must wonder what motives those, who are making such wrong insinuations, have.”

Josh Silverstein, professor at the UALR Bowen School of Law, said the practice of assignment in a case like this is unusual, but could make sense.

“At a general level I have never seen a situation where someone formed a corporation specifically to file a lawsuit. That doesn’t mean it doesn’t happen,” Silverstein said. “I didn’t practice in every kind of area. I don’t teach in every kind of area.

“There are all sorts of circumstances where a person might not want to sue, but want to collect. … As for creating a specific corporation, I can see when one might do that. I can’t remember it in the class-action context, but that’s not a crazy idea.”

Business, Pages 29 on 08/31/2013