Judges are the key to combating lawsuit abuse. Too often, however, they indulge the worst instincts of the trial bar. That’s why a federal appeals court decision last week should be must reading for jurists tempted to tolerate ridiculous civil claims.
On Friday, a three-judge panel of the 7th U.S. Circuit Court of Appeals tossed out a settlement in a lawsuit alleging that Subway’s foot-long sandwich didn’t always measure up. The legal action was a thinly veiled shakedown intended to line the pockets of a handful of plaintiffs’ attorneys.
“The dispute goes back to 2013,” The Wall Street Journal reported, “when an Australian teen posted a photo of a Subway foot-long sandwich lined up against a tape measure, showing it to be shorter than advertised.”
The meme resulted in a trial lawyer feeding frenzy, and a Wisconsin federal judge eventually consolidated the cases into a class-action filing. In 2014, Subway settled for $525,000 — all for the trial lawyers, save $500 each for the 10 litigants — while also agreeing to various “quality control” measures and to post disclaimers in stores.
Unbeknownst to the money-grubbing attorneys, however, Theodore Frank of the Competitive Enterprise Institute had signed on as a member of the aggrieved class. Mr. Frank is a “long-time critic of the class-action system,” the Journal notes. He objected to the terms of the settlement, forcing a judicial review.
He found a strong ally in the 7th Circuit. “A class settlement that results in fees for class counsel but yields no meaningful relief for the class is no better than a racket,” wrote Judge Diane Sykes for the unanimous panel.
The lower court should not only now dismiss the case, it should also sanction the lawyers involved.
The Subway foot-long caper highlights how the class-action system encourages abuse. Let’s hope the 7th Circuit’s action encourages judges to take a more aggressive approach when it comes to policing such nonsense.