Friday, January 8, 2016

Subway Settlement

Remember "Where's the Beef?" This week, Subway finally settled a multidistrict federal class action suit that accused Subway of defrauding its customers over the length of its bread. Some say the Subway foot-long settlement is short on dough, but Subway has agreed to pay some money and put in place a number of quality-control measures to “help ensure that the bread sold to customers is either 6 or 12 inches long." Subway is requiring that monthly restaurant inspections “include a sampling of the baked bread to ensure it is at least 12 inches long.” Subway fast-food restaurants will use bread-measuring tools that ensure their so-called six-inch and foot-long sandwiches don't come up short. According to a memorandum supporting plaintiffs' unopposed motion for final approval of class action settlement, Subway's parent company, Doctor's Associates Inc., will be required to conduct monthly compliance inspections making sure that the restaurants' bread is the size as marketed. The settlement covers only injunctive relief and does not bar individuals from suing for money damages. Nine name plaintiffs could receive up to $1,000 each. The total payout, including attorney fees, won’t exceed $525,000, according to the terms of the deal. I often encourage parties to explore non-monetary settlement terms that add value to a deal and that couldn't ordinarily be enforced by a court order or eventual judgment by a prevailing party. The remedial measures apparently sunset after four years, so get your real foot-long BMT now! See details here-- and here--