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-- http://www.wied.uscourts.gov/mdl-no-2439-re-subway-footlong-sandwich-marketing-and-sales-practices-litigation and here-- http://www.subsettlement.com

BP Settlement Causation Arguments Rejected

This week, New Orleans U.S. District Judge Carl Barbier rejected BP's argument that a multibillion-dollar settlement over the company's massive 2010 Gulf oil spill shouldn't compensate businesses if they can't directly trace their losses to the spill. Recently, the U.S. Circuit Court of Appeals for the Fifth Circuit ruled that the trial judge must reconsider BP's arguments for injunctive relief that 2012 settlement proceeds only compensate businesses whose economic losses are directly traced to the 2010 Gulf of Mexico oil spill, holding that the lower court erred last month in refusing to consider causation arguments in interpreting the consent decree. Perhaps because BP has previously received favorable rulings on appeal, it attacked the multibillion-dollar settlement by disputing payouts to businesses. BP argued court settlement administrators wrongly considered bogus or inflated claims. Plaintiffs' lawyers countered that BP undervalued claims and underestimated the number of claimants qualifying for payments. BP and the plaintiffs' lawyers had previously agreed on objective and specific methods of proving losses were caused by the spill such that losses for businesses located from Louisiana to Florida were presumed to be caused by the spill under the settlement's terms. The lower court felt it unreasonable to expect claimants to prove losses were directly traced to the spill. The appellate court directed the trial judge to allow businesses who can trace their losses to the spill to continue receiving payments. Judge Barbier said in his ruling on remand that the settlement was designed to avoid the delays that would result from a claim-by claim analysis of whether each claim can be traced to the spill. BP attorneys complained dozens of claimants whose losses were caused by something other than the spill have received millions. Judge Barbier sided with plaintiffs' lawyers that BP can't make those arguments because the company took a contradictory position on the same issue when it urged the court last year to approve the settlement. Stay tuned; another trip to the 5th Circuit may be coming. See story here-- http://abcn.ws/1a8NuRf and case no. 2:10-md-02179-CJB; MDL 2179, U.S. District Court, Eastern District of Louisiana.