In a victory for consumers, CEI’s Center for Class Action Fairness successfully objected to an abusive class action settlement in a case about the length of Subway’s “footlong” sandwiches. The proposed settlement benefitted only nine people in the class but awarded more than half a million dollars to the class attorneys. CEI argued this gross disparity was a flagrant violation of rules meant to protect class members.
The original class action lawsuit alleged that sandwiches sold by the Subway restaurant franchise sometimes fell short of the chain’s “footlong” marketing claims. But there was no dispute that the actual weight of the dough and the amount of ingredients was, in fact, 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. In addition, prior to the litigation, the company had already taken steps to reduce the minor disparities that occasionally occurred in the length of its bread rolls during baking.
The U.S. District Court for the Eastern District of Wisconsin approved the settlement in February 2016, and CCAF appealed the decision to the U.S. Court of Appeals for the Seventh Circuit. CCAF argued the lower court’s approval of the award was contrary to case law, which establishes that class actions should not be allowed to proceed when their only effect is to enrich the lawyers for the class while producing no relief for the class members themselves. Oral argument was heard on September 8, 2016, and Judge Diane Sykes suggested that the underlying lawsuit “was opportunistic entirely.”
On August 25, 2017, the Seventh Circuit’s ruling agreed with CCAF and rejected the settlement in the Subway case that would have paid plaintiffs’ attorneys $525,000 and left the class with nothing.
“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,” said Ted Frank, director of CEI’s Center for Class Action Fairness and the Subway customer objecting to the settlement. “The Seventh Circuit has been at the forefront of protecting consumers from litigation in which plaintiffs’ attorneys abuse the class action system solely for their personal profit.”
In late October 2017, the plaintiffs in the case decided not to continue to pursue the claims on remand in the district court, ending the saga of the too-short Subway sandwich lawsuit.