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Appeals Court Rejects Subway Foot-Long Settlement

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Nation's Restaurant News discusses the Subway 'footlong' settlement with Ted Frank.

A U.S. appeals court threw out a settlement between Subway and its customers Friday, agreeing with a class action reform advocacy group that the problems cited in the original lawsuit had no merit.

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“A class action that ‘seeks only worthless benefits for the class’ and ‘yields [only] fees for class counsel’ is ‘no better than a racket’ and ‘should be dismissed out of hand,” read the decision by the U.S. Court of Appeals for the Seventh Circuit, released on Friday. “That is an apt description of this case.”

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The two sides settled last year, with Subway agreeing to pay attorneys for the plaintiffs $525,000 in legal costs, and $500 apiece to each of the 10 people who led the class action lawsuit.

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But Ted Frank, the director of the Competitive Enterprise Institute’s Center for Class Action Fairness — who joined the lawsuit as a member of the class — appealed the settlement, arguing that the case had no merit and that the case “enriched only the lawyers and provided no meaningful benefits” to the customers who were part of the lawsuit.

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Frank, who appealed the decision, praised the ruling.

“By rejecting this class action settlement, the Seventh Circuit recognized it as part of the ‘racket’ plaintiffs’ attorneys use to extract fees for themselves while providing class members with nothing,” Frank said in a statement. He said the appeals court “has been at the forefront of protecting consumers from litigation in which plaintiffs’ attorneys abuse the class action system solely for their personal profit.”

Read the full article at Nation's Restaurant News.