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Subway Class Action Settlement Comes up Short

A three-judge panel of the U.S. Court of Appeals for the Seventh Circuit has reversed a district court’s approval of a settlement in a class action alleging that Subway’s “Footlong” sandwiches were not uniformly 12 inches long. The Court of Appeals determined that because the settlement yielded fees for class counsel and "zero benefits for the class," the class should not have been certified and the settlement should not have been approved.

The dispute arose in 2013 when an Australian teenager measured his Footlong sandwich, determined that it was only 11 inches, and posted a photo on his Facebook page alongside a tape measure. Following a social media uproar, suits were filed seeking damages and injunctive relief under the consumer-protection laws of various states, which were eventually consolidated in the Eastern District of Wisconsin.

The parties thereafter reached a settlement. For a period of four years, Subway agreed to implement certain measures to ensure, to the extent practicable, that all its Footlong sandwiches would be at least 12 inches long. The parties also agreed to cap the fees of class counsel at $525,000. Thomas Frank, a class member and frequent critic of the class-action system, objected to the settlement.

Although plaintiffs argued that the settlement provided meaningful injunctive relief to class members, the Seventh Circuit found it to be half-baked. The Court found that the procedures it required did not benefit the class in any meaningful way. The settlement acknowledged as much when it said that uniformity in bread length was impossible due to the natural variability of the bread-baking process, even though all of Subway's raw dough sticks weigh exactly the same. After the settlement, just as before, the rare sandwich that fell short of the full 12 inches would still provide the customer the same amount of food as any other, as Subway's "sandwich artists" added toppings at the customer's request. The settlement was found to enrich only class counsel and, to a lesser degree, the class representatives.

Lexis subscribers can access the opinion at: In re Subway Footlong Sandwich Mktg. & Sales Practices Litig., 869 F.3d 551 (7th Cir. Wis. Aug. 25, 2017)

Lexis Advance subscribers can find the opinion at:  In re Subway Footlong Sandwich Mktg. & Sales Practices Litig., 869 F.3d 551 (7th Cir. Wis. Aug. 25, 2017)

Author:  Phil Harms, Lexis-Nexis Case Law Editor

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