Seventh Circuit Rejects Subway Footlong Class Settlement as a “Racket”

JD Supra covers the Subway ‘footlong’ settlement.

A recent Seventh Circuit decision pushed back on a proposed settlement of the Subway “footlong sub” class action, finding the proposed settlement a “racket” designed to benefit class counsel without any benefit to the class. The story begins in 2013 when a Facebook post showing a Subway footlong sandwich measuring just 11 inches went viral. Shortly thereafter, the plaintiffs’ attorneys filed nine class actions seeking damages and injunctive relief against Subway.

Ted Frank, director of the Competitive Enterprise Institute’s Center for Class Action Fairness and a member of the class, objected, calling the injunctive relief worthless. Over his objection, the district court approved the settlement agreement, and Frank appealed. A panel of the Seventh Circuit reversed, finding that a “class settlement that results in fees for class counsel but yields no meaningful relief for the class ‘is no better than a racket.’” In re Subway Footlong Sandwich Mktg. & Sales Practices Litig., — F.3d –, 2017 WL 3666635, at *4 (7th Cir. Aug. 25, 2017) (citing In re Walgreen Stockholder Litig., 832 F.3d 718, 724 (7th Cir. 2016)).

Read the full article at JD Supra.