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Seventh Circuit Rejects Subway Footlong Class Settlement as a "Racket"

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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.

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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.