YRC Freight asks court to dismiss lawsuit accusing company of overcharging government
February 21, 2019
YRC Freight is asking a federal court to dismiss a lawsuit against the company that accuses it of systematically overcharging the government millions of dollars. YRC says there are deficiencies in the case despite a 10-year investigation before its filing.
As part of a Feb. 12 memorandum in support of its motion to dismiss, YRC Freight’s attorneys told the U.S. District Court for the Western District of New York that the government failed to build a sufficient case.
The U.S. Department of Justice filed a complaint in December against YRC Freight, Roadway Express and Yellow Transportation, claiming that that the companies defrauded the Department of Defense “by millions of dollars for shipments that were actually lighter, and thus cheaper, than the weights for which the defendants charged the government.”
According to the Department of Justice, the scheme took place from September 2005 until October 2013. Roadway Express and Yellow Transportation merged to become YRC in 2009. In 2012, the name of the company was changed to YRC Freight, which is headquartered in Overland Park, Kan.
“The government scrapes the bottom of the barrel in a desperate attempt to somehow conjure up an appearance of some sort of purported business impropriety and comes up with nothing more than a few emails,” the memorandum stated.
According to YRC Freight, the emails do not show that company had actual knowledge that their interpretation of the reweigh obligations was false.
“Those … allegations do not allege that the defendants knew or should have known that their interpretation of the regulatory language constituted a fraudulent, rather than reasonable, approach in connection with reweigh obligations and the submission of claims,” the memorandum stated.
YRC Freight also noted that the government never refused to pay the full amount during the 10-year investigation.
“During that decade long period, the government, with express knowledge of the defendants’ interpretation of their obligations under the relevant rule, never refused to make a single payment to defendants for the full amount of any invoice, and at no time initiated the various remedies afforded to it by law based on its view that defendants’ interpretation was erroneous, much less fraudulent,” the memorandum stated.
After the lawsuit was announced in December, YRC Freight posted on its website that claims “were totally without merit” and that the Department of Defense currently represents less than 1 percent of the company’s annual revenue.