Size Matters: Seventh Circuit Rejects Subway Footlong Settlement Because It Provided No Meaningful Benefit To Class Members

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Subway (pd)I am a regular Subway customer, so I read the Seventh Circuit's opinion, In re. Subway Footlong Sandwich Marketing and Sales Practices Litigation, with great interest. You probably remember the events that spawned this litigation. As the Seventh Circuit described it: "In January 2013 Matt Corby, an Australian teenager, purchased a Subway Footlong sandwich and, for reasons unknown, decided to measure it. The sandwich was only 11 inches long. He took a photo of the sandwich next to a tape measure and posted the photo on his Facebook page. Thus a minor social-media sensation was born." And, "[w]ithin days of Corby's post, the American class-action bar rushed to court," therefore, a class action lawsuit was also born. It ended a few years later with a settlement, which the Seventh Circuit just overturned.

To say that the Seventh Circuit was critical of the settlement would be an understatement. Its opinion is filled with subtle, and not so subtle, criticisms of the settlement and plaintiffs' counsel. For example, early in its opinion, the court observed: "In their haste to file suit [ ] the lawyers neglected to consider whether the claims had any merit. They did not." It did not get much better for plaintiffs from that point on.

The court noted that the parties engaged in limited, informal discovery early on in the case, with the intent of going to mediation. This discovery revealed that plaintiffs' claims were deficient. It showed that "the length of the [baked] bread has no effect on the quantity of food each customer receives." First, all of Subway's raw dough is exactly the same size. So, even the few rolls that bake to approximately a quarter-inch less than 12 inches because of natural, and unpreventable, "vagaries in the baking process" provide the same bread as those that bake to the full 12 inches. Second, Subway standardizes the amount of meat and cheese that its "sandwich artists" put on each sandwich, so whether the bread is 12 inches long or a quarter-inch short, the customer still gets the same amount of food. (In the interest of full disclosure, because I am a regular, I do occasionally get an extra slice of ham, salami, and pepperoni on my six-inch BMT at my local Subway.) "This early discovery, limited though it was, extinguished any hope of certifying a damages class."

"Rather than drop the suits as meritless," however, plaintiffs shifted the focus of the lawsuit from one seeking damages to one seeking injunctive relief. THey filed an amendec complaint and, after mediation, reached a settlement with Subway, under which Subway would, for four years, implement practices designed to ensure, the the extent possible, that its sandwich rolls measured at least 12 inches long. But, the settlement noted that "because of the inherent variability in food production and the bread baking process, Subway could not guarantee that each sandwich roll [would] always be exactly 12 inches or greater in length after baking." In other words, Subway would try to fix, but could not guarantee that it would fix, the problem that spawned the lawsuit. 

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Final Chapter In The Case Of The Missing Double Eagle Coins

     by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Double eagle (pd)
One of the more interesting cases I have written about is Langbord v. U.S. Dept. of Treasury, which I described in a June 2015 post as follows:

It's not every day that you find a case that starts with Depression-era monetary policy, ends with a relatively obscure federal statute, and in between tells the tale of the alleged theft of a coin considered to be "the most valuable ounce of gold in the world." Did I mention that the case also involves both Presidents Roosevelt, King Farouk of Egypt and the Sept. 11, 2001, terrorist attacks? A case recently decided by the U.S. Court of Appeals for the Third Circuit, Langbord v. U.S. Dept. of Treasury, has all of this and more.

Langbord involved the 1933 Double Eagle gold coin. It is a $20 gold piece that was designed by famed artist Augustus Saint-Gaudens after he was commissioned by President Theodore Roosevelt to help beautify American coinage. Almost a half million Double Eagles were minted, but none were ever officially released into circulation. Shortly after they were minted, newly-elected President Franklin D. Roosevelt, seeking to stem a run on the banks, issued Executive Order 6102, which made it illegal to "hoard" large amounts of gold. Accordingly, the U.S. Mint was ordered to stop issuing gold coins and to melt down any gold coins in its possession, including the Double Eagle. As part of this process, two Double Eagles were sent to the Smithsonian Institution for posterity, but the rest were supposed to have been melted down.

As you might have guessed, not all of the remaining coins were melted down. According to the government, approximately 20 of them ended up in the hands of a coin dealer who worked with a corrupt cashier at the US Mint to smuggle them out before they could be melted down. Over the years, it was alleged, he sold several of these coins. But, after his death, his family found 10 of them in his safety deposit box and offered to return them to the government. They requested the same terms as the government had agreed to several years earlier with a different individual who came into possession of another one of the coins. The government originally seized that coin after luring the dealer into a sting conducted at the Waldorf Astoria in New York City, but later, after the dealer sued, agreed to sell the coin at auction and split the proceeds with him. At auction, it sold for almost $7.6 million, more than twice the world record for any coin sold at auction at the time. Plaintiffs in Langbord were looking for the same arrangement for their coins. The government agreed in principle but asked to authenticate the coins first. Plaintiffs agreed and sent the coins to the government for authentication. However, after authenticating them, the government refused to return them, arguing that they were stolen and were rightfully the property of the U.S. government. 

Continue reading “Final Chapter In The Case Of The Missing Double Eagle Coins”

Dismissal With Prejudice Too Harsh A Remedy For Expert’s Unavailability

 by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Gavel (pd)There is often tension between a court's need to effectively manage its docket and the overriding objective that a lawsuit be resolved on its merits and not because a party (or its counsel) misses a deadline. Courts establish deadlines. If they are ignored, can the court — as a sanction, and in the interest of managing its docket — dismiss the lawsuit with prejudice? According to the Appellate Division in a recent unpublished decision, Trezza v. Lambert-Wooley, the answer to this question is "no," unless the noncompliance was purposeful and no lesser remedy was available to the court. 

In Trezza,plaintiffs sued defendants for medical malpractice. Three years after the lawsuit was filed, the court set a peremptory trial date. This was rescheduled when the court did not reach the case on the trial date. The trial did not take place on the rescheduled date or a subsequent rescheduled date, both times because defendant's designated trial counsel was unavailable. Thereafter, the Presiding Judge issued a sua sponte order scheduling trial for approximately four months later and setting forth "specific and stringent terms as to the course and conduct of the case relative to trial." The order mandated that: (1) the trial date would not be adjourned to accommodate the parties' or counsels' personal or professional schedules; (2) counsel was required  to monitor the schedules of their parties, witnesses, and experts, and if one or more were not going to be available on the trial date, arrange for a de bene esse deposition ahead of trial; and (3) if designated trial counsel was not available on the trial date, alternate counsel would have to be found, whether or not from the same firm.

Five days before the scheduled trial date, plaintiff's counsel requested that the trial be carried for four days due to the unavailability of plaintiff's liability expert, which he only learned about a few days prior to the request. Defendants' counsel consented to the request. The judge assigned to the case considered the request but, in light of the Presiding Judge's order, determined that he did not have the authority to grant the adjournment. He sent the parties to the Presiding Judge, who denied the request and directed the parties to proceed to trial. "Predicated upon the terms of the order, the age of the case, and plaintiff's expert's unavailability, the judge [then] dismissed the complaint with prejudice." Plaintiffs appealed.

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Field of Bad Dreams?

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Field of Dreams (PD)
In Field of Dreams, James Earl Jones's character makes a famous speech about baseball being "the one constant through all the years." While "America has rolled by like an army of steamrollers," and has been "erased like a blackboard, rebuilt, and erased again . . . baseball has marked the time." In D.W. v. L.W., the Law Division started its opinion with a less poetic, but more ominous baseball-related statement: "This case involves separated parents, young children, and Little League baseball." If you have been to more than a few youth sporting events, you can probably guess what was at issue in the case. Nonetheless, the court's opinion is a good read as it is part homage to little league baseball and part framework for how parents should (and should not) behave at youth sporting events.

In D.W., a husband and wife's child played in a "coach-pitch league." Although they were separated, they agreed that they could both attend the games as long as the husband stayed at least 50 feet from the wife. A few months later, the husband filed a follow-up motion to attend their son's football games. The wife opposed the motion and further asked the court to ban the husband from continuing to attend their son's baseball games because he had "acted inappropriately at the baseball field, in a publicly embarrassing manner, by making negative and demeaning comments about the team coach's baseball-related decisions, within earshot of the coach's wife." She further claimed that the couple's daughter later started repeating the husband's comments, and that the husband had posted similar commentary about the coach on Facebook. The husband denied that he acted inappropriately, and further claimed that it was his wife "who, at least previously, did not approve of the coach's baseball-related abilities." (As an aside, how many "baseball-related decisions" does a coach really make in a 7-year-old's coach-pitch game?)

The court began its opinion by emphasizing the importance of youth sports in America. More than 40 years ago, the Appellate Division recognized that little league baseball was a "piece of public Americana." It has been almost universally praised as a "social and cultural tool for positive childhood development and inclusion." According to the court, the benefits of little league baseball go beyond "simply teaching children to hit, field and catch," but include developing "good citizenship, sportsmanship, and maturity of character." In fact, the court took judicial notice that "the results of particular Little League games are not nearly as significant as the underlying goal of developing a child's ongoing personal character in a positive fashion."

 

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Married in 1967, Divorced in 1982, Sued for 47 Years of Alimony in 2014

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Divorce (pd)It seems like the plot of a Lifetime movie, but it is not (or, at least, not yet). Plaintiff and defendant marry in 1967 in Vietnam. In 1975, plaintiff flees Vietnam because of the "impending communist takeover." He ends up in New Jersey where, in 1981 he files for divorce. The judgment of divorce is entered in 1982, after which plaintiff re-marries. In 2004, defendant immigrates to the United States and ten years later seeks to vacate the divorce and collect alimony and equitable distribution "based on a 47 year marriage." These are the basic facts in a recent unpublished Appellate Division decision, Chau v. Khon.  

Here are the relevant missing details. After coming to America in 1975, plaintiff sent letters to defendant, "including a signed application for family reunification." Plaintiff's brother also sent letters to defendant. These letters were sent between 1975 and 1981, but defendant never responded. Plaintiff filed for divorce in 1981, asserting a separation of more than 18 consecutive months as the basis for the divorce. Because he had not heard from his wife in six years, and did not know here whereabouts, he sought permission to serve her by publication. The court agreed, and following publication, a judgment of divorce was entered.

Plaintiff remarried and the couple had a son. Plaintiff also had two daughters from his first marriage. In 1993, the daughters came to live with their father and his new wife. In 1996, plaintiff and his son even visited Vietnam and met with defendant. In 2004, defendant immigrated to the United States. She claims that she learned about the divorce in 2006 when she obtained copies of the original complaint and judgment of divorce. Nonetheless, she waited until 2014 to (1) move to vacate the original divorce and (2) file her own complaint for divorce, seeking alimony and equitable distribution going back to the original 1967 wedding date. She also filed lis pendens on three properties, only one of which was owned by plaintiff (the other two were owned by his son). Defendant claimed that she waited ten years to file the complaint because it took her that long to "obtain all of the papers they needed to prove that plaintiff knew where she was living in 1981 and 1982 so she could challenge his fraudulent divorce from her." This was important to her because, among other arguments, defendant claimed that plaintiff's assertion that he did not know her whereabouts when he filed the complaint for divorce was a fraud on the court.

Plaintiff opposed the motion to vacate the divorce and cross moved to discharge the lis pendens and for an award of attorney's fees. The trial court denied defendant's motion and granted plaintiff's motion (except the request for fees). The trial court explained that defendant "admitted that she knew of the divorce in 2006 , but failed to act diligently by waiting until 2014 to file her motion to vacate the divorce."  It also held that defendant failed to "address[] how her motion and proposed new divorce complaint would affect plaintiff's second wife, who had been married to plaintiff for over thirty years." Defendant appealed.

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Latest Round In Fight Over Rare Double Eagle “Coins” Goes To Government

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Double eagle (pd)
I have written before about Langbord v. United States Department of the Treasury. (Click here and here for the prior posts.) This is a case about ten, 1933 Double Eagle coins, which I described in a prior post as follows:

[The Double Eagle] is a $20 gold piece that was designed by famed artist Augustus Saint-Gaudens after he was commissioned by President Theodore Roosevelt to help beautify American coinage. Almost a half million Double Eagles were minted, but none were ever officially released into circulation. Shortly after they were minted, newly-elected President Franklin D. Roosevelt, seeking to stem a run on the banks, issued Executive Order 6102, which made it illegal to "hoard" large amounts of gold. Accordingly, the U.S. Mint was ordered to stop issuing gold coins and to melt down any gold coins in its possession, including the Double Eagle. As part of this process, two Double Eagles were sent to the Smithsonian Institution for posterity, but the rest were supposed to have been melted down.

However, not all of the coins were melted down. Around 20 were smuggled out of the U.S. Mint. Over the years, nine were located by, or returned to, the Secret Service. Another one was seized by the Secret Service in a sting operation at the Waldorf Astoria after the owner, Stephen Fenton, was lured there by agents posing as potential buyers. (It was later stored in the World Trade Center but was removed just a few months before the 9/11 terror attacks, just one of the interesting facts in this case.) After Fenton sued, the government agreed to auction off the coin and split the proceeds with the owner. It sold for $7.6 million, more than twice the world record for any coin sold at auction at the time.

Shortly after the auction, Joan Langbord notified the government that she had found 10 Double Eagles in a safe-deposit box belonging to her father, Israel Switt. (According to the government, however, this discovery was hardly fortuitous. The government claims that all of the Double Eagles that escaped its control went through Switt's hands. It claims that he worked with a corrupt cashier at the U.S. Mint in Philadelphia to smuggle Gold Eagles out of the Mint before they could be melted down.) The lawyer representing Ms. Langbord and her sons, the same one who represented Fenton, proposed a sale of the 10 coins like the one agreed to with Fenton. The government  indicated it was "amenable," so the Langbords sent the coins to the U.S. Mint for inspection. After the coins were authenticated, the Langbords requested that they be returned, but the U.S. Mint refused. The Langbords responded by submitting a "seized asset claim" demanding the return of the coins. When they were not returned, the Langbords sued.

Continue reading “Latest Round In Fight Over Rare Double Eagle “Coins” Goes To Government”

In Case You Ever Find Yourself Fighting With Your Wife Over Your Ferraris . . .

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Ferrari (pd)Right. I never do either. But if you do (or think you might in the future) then you might want to know about Durrani v. Wide World of Cars. In that case, plaintiff sued a car dealership and her ex-husband's former lawyers for delivering two Ferraris to her ex-husband, allegedly in violation of an order entered in their divorce action.

As the trial court described it, when plaintiff and her ex-husband were married, they lived an "extravagant lifestyle." Among other things,  they owned "twenty-five luxury cars worth approximately one million dollars, boats and properties." Of these assets, however, plaintiff was only on the title of two cars (and not the Ferraris). Nonetheless, during their divorce proceeding, plaintiff sought "exclusive possession" of the Ferraris, which were titled and registered to her ex-husband and stored at the defendant dealership's facilities. Consistent with this claim, plaintiff's counsel sent a letter to the dealership requesting that it not release or transfer the Ferraris to anyone, including plaintiff's ex-husband, and threatening to hold the dealership liable for damages if it did. At the end of the letter, counsel asked the dealership to agree to abide by the demand and indicated that if it did not agree, plaintiff would "immediately seek to serve [the dealership] with a court order." The dealership did not respond.

Around the same time plaintiff's counsel sent this letter, the family part entered an order in the divorce proceeding preventing either party from dissipating, selling, etc. any assets of the marriage, and specifically identified the Ferraris in a list of assets to which this restraint applied. Plaintiff's counsel sent a copy of the order to the dealership, purportedly placing it on notice of the terms.

 

Continue reading “In Case You Ever Find Yourself Fighting With Your Wife Over Your Ferraris . . .”