Appeals Court Rejects ‘Worthless’ Subway Foot-long Settlement Between Sandwich Chain and Customers

The Washington Times covers the Subway footlong settlement.

A federal appeals court has rejected a class-action settlement between the Subway sandwich chain and customers who sued over the size of the company’s “Footlong” subs.

Agreeing with a prominent class-action advocate who opposed the settlement, a three-person panel of the Seventh Circuit Court of Appeals tossed out a deal Friday that would have awarded hundreds of thousands of dollars in attorney’s fees to the lawyers who sued Subway but only $500 each to the 10 customers they represented.

“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,” Circuit Judge Diane Sykes wrote for the panel. “That’s an apt description of this case.”

…

Subway resolved the lawsuits by promising to ensure its sandwich rolls measure as advertised and pay $525,000 in legal costs to the plaintiffs plus $500 apiece to the 10 customers who led the lawsuit. That settlement came under fire, however, after Ted Frank, the director of the Competitive Enterprise Institute’s Center for Class Action Fairness, joined the class and appealed.

“This is exactly the opinion we were hoping for,” Mr. Frank told Reuters following Friday’s ruling. “It affirms the principle that when attorneys bring class actions to benefit only themselves, it’s an abuse of the system, and courts should not tolerate it.”

Read the full article at The Washington Times.