The Competitive Enterprise Institute’s Center for Class Action Fairness today argued in court against a class action settlement involving Subway’s “footlong” sandwiches. The settlement awards over half a million dollars to the class attorneys, while the class members get nothing.
“In this class action, the principal effect is to force the defendant to give money to the lawyers with nothing going to the class at all,” said Ted Frank, director of CEI’s Center for Class Action Fairness and the Subway customer objecting to the settlement. “This is an abuse of the class action system meant to protect people.”
In oral argument today before the United States Court of Appeals for the Seventh Circuit, Judge Diane Sykes called the settlement, “a racket in every sense.”
The original class action lawsuit had alleged that sandwiches sold by the Subway restaurant franchise sometimes fell short of the chain’s "footlong” marketing claims. No one disputed the fact that the actual weight of the dough and the amount of ingredients was uniform for each sandwich; and even the named plaintiffs in the lawsuit conceded that the exact length of the sandwiches didn’t affect their purchases or change their future plans to eat at Subway. Moreover, before the litigation started, the company had already taken steps to reduce minor disparities in the length of its bread rolls during baking. Nonetheless, the plaintiffs’ lawyers sought a fee award and payments to class representatives totaling $525,000.
Mr. Frank argues that the lower court’s approval of the class settlement is contrary to case law, which establishes class actions should not be allowed to proceed when their only effect is to enrich lawyers while producing no relief for the class members themselves.
The case is on appeal from the United States District Court for the Eastern District of Wisconsin, which approved the settlement in February 2016. A decision from the appeals court is expected within a year.
CEI’s Center for Class Action Fairness represents class members against unfair class action procedures and settlements. Founded by Ted Frank in 2009, the center has won millions of dollars for consumers and shareholders and won landmark precedents that safeguard consumers, investors, courts, and the general public.
> Read more about the case In re: Subway Footlong Sandwich Marketing and Sales Practices Litigation