“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.’” In re Subway Footlong Sandwich Mktg. & Sales Practices Litig., 2017 U.S. App. LEXIS 16260, at *3 (7th Cir. Aug. 25, 2017) (quoting In re Walgreen Co. Stockholder Litig., 832 F.3d 718, 724 (7th Cir. 2016)). With those words, the Seventh Circuit put an end to a putative class action spawned by a Subway sandwich, a measuring tape, and a Facebook post that went viral.
In 2013, an Australian teenager discovered that his “footlong” Subway sandwich measured only 11 inches, not 12. The teenager posted a picture of his sandwich and a tape measure on Facebook, and the post went viral. It also spawned a putative class action.
However, early discovery confirmed that the natural baking process for Subway’s bread created minor variations in the sizes of the “footlong” sandwiches, even if the same amount of dough was used. Thus, in the absence of any damages, the plaintiff’s attorneys shifted focus and sought certification for injunctive relief under Federal Rule of Civil Procedure 23(b)(2). Ultimately, the case settled, with Subway agreeing to take steps that might help further ensure that its “footlong” sandwiches would bake-out to the full 12 inches. In return, class counsel received $520,000 in attorney’s fees and each class representative received $500. But Theodore Frank, a well-known class action objector, believed the settlement was worthless, and appealed the settlement to the Seventh Circuit.
The Seventh Circuit agreed with Mr. Frank and held that the putative class action should not have been certified and the settlement should not have been approved because the putative class action and settlement offered “zero benefits for the class.” Id. at *14. Before the settlement, Subway customers could be fairly (but not entirely) certain that their “footlong” sandwiches would be 12 inches long: Subway used uniform quantities of dough that were meant to bake to 12 inches. After the settlement, nothing really changed. Assuming implementation of the proposed injunctive relief, Subway customers still could only be fairly (but not entirely) certain that their “footlong” sandwiches would be 12 inches long. As both parties acknowledged, “because of the inherent variability in food production and the bread baking process, [Subway] will never be able to guarantee that each loaf of bread will always be exactly 12 inches or greater in length after baking.” Id. at *13. Finding this all “utterly worthless,” the Seventh Circuit concluded that the settlement only served to enrich class counsel and, to a lesser extent, the class representatives, and the settlement should not have been approved and the class action decertified. Id.
The impact of this decision may be curtailed by the fact that this case involved an injunctive class action under Rule 23(b)(2). Still, it is a win for practicality and commonsense, and it may give pause to the next overly zealous attorney who tries to make a quick fortune off a Facebook post gone viral.