The American Bar Association Journal discusses the Center for Class Action Fairness’ Subway Footlong settlement:
But customers arguably are getting a less tangible benefit: Subway’s promise that its restaurants will do a better job of ensuring sandwiches are as long as they’re supposed to be, whether that’s 6 or 12 inches. As the result of a settlement, Subway’s parent company—Doctor’s Associates Inc. in Milford, Connecticut—is telling franchises to keep handy a ruler or a tape measure. Subway shops are under orders to measure a sample of at least 10 sandwiches every month.
As part of the settlement agreement, Doctor’s Associates would pay $500 to the 10 named plaintiffs—plus $520,000 in fees and expenses for the dozen attorneys who sued Subway. That didn’t sit well with lawyer Ted Frank, director of the Center for Class Action Fairness at the Competitive Enterprise Institute in Washington, D.C. He says the Subway case is “a pretty clear-cut example of lawyers abusing the system to benefit themselves.”
But Chicago attorney Thomas Zimmerman, who also represents the plaintiffs with DeNittis, says he has a more high-minded purpose. “We try to achieve a recovery for people who have been cheated, and we try to achieve changes in corporate practices,” Zimmerman says.
Frank hadn’t been involved in the early stages of the litigation at the U.S. District Court for the Eastern District of Wisconsin, but he challenged the settlement. As Frank explained to the court, he’s eaten dozens of Subway sandwiches, so he qualifies as a member of the class, giving him standing to file an appeal. He argues that the settlement is worthless to consumers, so the case shouldn’t have been certified as a class action in the first place.
“The class is getting nothing out of this,” he said during oral arguments in September at the 7th U.S. Circuit Court of Appeals at Chicago, which still is deciding on Frank’s appeal of the settlement. The judges sounded skeptical during the arguments. “A class action that seeks only worthless benefits for the class should be dismissed out of hand,” said Judge Diane Sykes. “That’s what should have happened here. … This is a racket.”