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CEI Appeals Footlong Subway Settlement: Lawyers Got $520K, Most Plaintiffs ‘Got Nothing’

Barbara Hollingsworth
By Barbara Hollingsworth | April 6, 2016 | 2:09 PM EDT

Matt Corby's photo of his less-than-Footlong Subway sandwich went viral in 2013. (Facebook)

 

 

 

 

 

 

 

 

 

 

A court-approved $525,000 settlement over a less-than-Footlong Subway sandwich is being appealed by the Competitive Enterprise Institute’s (CEI) Center for Class Action Fairness (CCAF).

CCAF says it is filing the appeal because the lawyers in the class-action lawsuit pocketed $520,000 while the majority of the plaintiffs “got nothing”.

“Every cent of that amount ended up with class counsel and the class’10 named representatives,” CCAF director Theodore Frank pointed out.

“The majority of the class [defined by the court as "all persons in the United States who purchased a 6-inch or Footlong sandwich at a Subway restaurant between Jan. 1, 2003 and Oct. 2, 2015”] got nothing.”

“In the appeal, we will present a straightforward question to the [7th Circuit] Court of Appeals: Is it acceptable to certify (approve) a class action where the class represented will derive no benefit?” explained CCAF attorney Adam Schulman.

Nine consumer class action lawsuits accusing Subway of “unfair and deceptive marketing campaigns” were filed against the restaurant chain in 2013 after Matt Corby, a teenager from Australia, posted a photo of his Subway Footlong sandwich on Facebook showing that it was an inch short.

Subway responded by admitting that “this bread clearly is not baked to our standards,” but pointing out that “‘SUBWAY FOOTLONG’ is a registered trademark as a descriptive name for the sub sold in Subway Restaurants and not intended to be a measurement of length.”

Subway's response to Corby's post. (Facebook)

 

 

 

 

 

The nine class action lawsuits were eventually consolidated into one. On February 25, Milwaukee U.S. District Court Judge Lynn Adelman gave his final approval to a settlement between the plaintiffs and Doctor’s Associates, Inc., Subway’s franchisor.

“By the time the initial mediation session was over, the plaintiffs realized that their claims were quite weak,” Adelman wrote.

“Because all loaves are baked from the same quantity of dough, each loaf contains the same quantity of ingredients. Thus, a customer who received a baked loaf that was shorter than 12 inches did not receive any less bread than he or she would have if the loaf had measured exactly 12 inches.”

And since Subway has also standardized the amount of sandwich fillings, “as a practical matter, the length of the bread does not affect the quantity of food the customer receives,” the judge pointed out.

Nonetheless, the chain agreed to require its franchisees to keep a ruler on the premises and to measure five loaves of white bread and five loaves of wheat bread monthly over the next four years, although the settlement stipulated that there was no guarantee that every footlong and six-inch sandwich would actually be that exact size.

Subway also agreed to pay $525,000, with $500 going to each of 10 named plaintiffs and the rest - $520,000- going for attorneys’ fees to lawyers at eleven law firms over the objections of CCAF, which pointed out in December that “this settlement benefits only the lawyers at the expense of the class.”

Judge Lynn Adelman (U.S. District Court, Eastern District of Wisconsin).

However, Judge Adelson said that it was “not practical” to give millions of “absent class members” monetary awards under the settlement agreement, calculating that they would only receive 28 cents each.

“If class members took the value of their time into consideration, no one would bother to submit a claim for 28 cents,” he said.