Standing to Sue and Class Certification

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7^th Circuit Court of Appeals

Case Name: In Re: Subway Footlong Sandwich Marketing and Sales Practices Litigation

Case No.: 16-1652

Officials: FLAUM, ROVNER, and SYKES, Circuit Judges

Focus: Standing to Sue and Class Certification

The first issue on appeal concerns Frank’s standing. The plaintiffs and Subway insist that he lacks standing to appeal because he doesn’t have any interest in the amount of attorney’s fees awarded as part of the settlement. Because the settlement provides only injunctive relief to the class—not monetary relief—any reduction in attorney’s fees will return to Subway and not to class members like Frank. See Pearson v. NBTY, Inc., 772 F.3d 778, 786 (7th Cir. 2014) (“If the class cannot benefit from the reduction in the award of attorneys’ fees, then the objector, as a member of the class, would not have standing to object, for he would have no stake in the outcome of the dispute.”). But Frank’s appeal does not take aim at the judge’s ruling on class counsel’s motion for attorney’s fees.

He challenges the certification of the class and the approval of the settlement. True, a decision to reverse the judgment will unwind the award of attorney’s fees, and neither Frank nor any other class member will benefit from reducing the fees of class counsel to zero. But as a class member who is bound by the settlement, Frank clearly has standing to appeal. Devlin v. Scardelletti, 536 U.S. 1, 10 (2002). He properly objected at the fairness hearing and may “appeal the approval of a settlement … that will ultimately bind [him].” Id.

Because the settlement yields fees for class counsel and “zero benefits for the class,” the class should not have been certified and the settlement should not have been approved. In re Walgreen, 832 F.3d at 724. Because these consolidated class actions “seek[] only worthless benefits for the class,” they should have been “dismissed out of hand.” Id.

Reversed and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.