Appeals Court Tosses One of the Most Absurd Class Action Cases of All Time

Forbes Online covers the Subway ‘footlong’ settlement.

The plaintiffs’ bar has perfected a system for extracting money from firms. It works like this: Find a petty complaint about some product, magnify it into a class-action suit, then settle with the company in a way that does virtually nothing for the supposed victims, but yields a nice haul of legal fees as the company pays them to go away.

This scheme for enriching lawyers who are just manipulating the legal system depends on compliant judges who will approve the classes and rubber stamp the settlements. Every now and then, however, they run into a member of the “injured” class who objects and if the case winds up before an alert appellate court, the case crashes.

That is what just happened in the Subway foot-long litigation. The judge’s opinion will be sweet music to any businessman who has ever been raked over by abusive lawyers.

Rather than drop the case for lack of any damage to consumers, the plaintiffs pressed ahead, insisting on a settlement whereby Subway would institute certain changes that would supposedly do more to protect customers against short sandwiches, and pay off the law firm to the tune of $525,000. That settlement was approved by the federal district judge in charge of the case.

But one member of the plaintiff class did not approve — Ted Frank, who directs the Center for Class Action Fairness of the Competitive Enterprise Institute. Under the federal rules of civil procedure, class members may object to settlements and Frank’s objection threw the case into the Seventh Circuit Court of Appeals.

Read the full article at Forbes Online.