He said the Friday ruling is the clearest rebuttal yet of settlements that don’t provide meaningful benefits for class members.
“It’s a great win for us and it’s an important principle that lawyers can’t bring class actions just to benefit themselves,” Frank said. “They have actual duties to class members and when they structure litigation and settlements without any benefit to the class, courts shouldn’t tolerate that.”
Matthew De Re of the Chicago-based Zimmerman Law Offices represented the plaintiffs. De Re did not immediately respond to a request for comment. A Subway spokesman said the company would release a statement by the end of the day Friday.
The food fight began back in 2013, when an Australian teenager tweeted a photo of a Subway footlong next to a tape measure, revealing that the sandwich was only 11 inches long despite the advertising. A flurry of consumer protection litigation ensued, and nine lawsuits were eventually consolidated in the Eastern District of Wisconsin. The court approved a settlement in February last year.
The settlement, Sykes wrote, would not make the class members any better off. As the judge explained, undersized subs are not a clearly pervasive problem, and as the settlement language articulated, there is no way Subway can guarantee every sandwich will be 12 inches long due to variations in food production and the baking process. Those variations exist regardless the settlement, the judge said.
“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.’ That’s an apt description of this case,” Sykes wrote, quoting a similar decision from last year.
Frank added the ruling creates a circuit split. On Wednesday, Frank and his team lost a similar case at the Tenth Circuit over alleged fraud by major gasoline retailers who, plaintiffs argued, failed to account for how temperature affects gas volume in marketing how much they were selling. Frank said he plans to ask for a rehearing in that case and point to the Subway decision in the petition.
“Courts are split over whether the purpose of class actions is to benefit consumers or to benefit lawyers and we think that’s a pretty obvious question, but apparently not,” Frank said.
The Subway case now returns to the district court in Wisconsin. Sykes wrote the case should be dismissed at that level, as it only seeks “worthless” benefits for class members.
