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As lawsuits hit, restaurant chains’ defenses go beyond the courtroom

Subway’s tuna sandwich lawsuit is the latest in a string of legal challenges to restaurants’ ingredients and quality. Defending these to customers is even more important.
Illustration: Restaurant Business staff

Shortly after attorneys filed a lawsuit in California against Subway, claiming that its tuna was a “mixture of various concoctions that do not constitute tuna,” the sandwich giant opted not to hide it.

The Milford, Conn.-based chain put out a press release, blasting the lawsuit and claiming the attorneys behind it were trying to make names for themselves filing complaints such as this against food companies.

It offered customers 15% off tuna sandwiches. And on Twitter it told people to “keep fishing folks, we’ll keep serving 100% wild-caught tuna.”

In an era in which such lawsuits appear to be on the upswing, Subway has little choice. Challenges like this one that take issue with the very substance of a company’s product are too problematic to leave the defense of it to the attorneys alone.

“When it goes to the core of the company’s brands, those are the kinds of suits you can’t just settle for nuisance value,” said Matthew Wright, a partner in the Washington D.C. law firm of McCarter & English. “You need to stand up and defend your brand and your reputation in the marketplace.”

“The litigation is less important than the brand consideration,” he added.

Restaurant chains have been dealing with false advertising complaints for decades, with varying degrees of legitimacy.

The Subway lawsuit isn’t the only one to hit a big chain this month—a customer in Massachusetts claimed that the coffee giant Starbucks misled customers by using artificial rather than real vanilla in its Frappuccinos.

Over the years, lawsuits have challenged such things as whether Burger King’s Impossible Whoppers were truly vegetarian or whether Taco Bell’s seasoned beef is actually beef.  

James Molen, an attorney out of Los Angeles with the law firm Greenberg Glusker who defends companies in such false advertising actions, said he has seen an uptick in these cases over the past couple of years.

He’s seen three such actions come across his desk already this year—traditionally he gets about one a year. “There’s an absolute explosion in terms of demand letters we’re getting from plaintiffs law firms,” Molen said. “Most are trying to extract a settlement.”

He calls most of the actions “false-ad trolls” in which the plaintiffs' law firm demands $100,000 to $200,000 from a company to settle a case. That’s an amount small enough to potentially convince a company to pay up because it would be cheaper than hiring an attorney and it would keep the action out of the public eye.

“The litigation is less important than the brand consideration." Matthew Wright, attorney with McCarter & English.

Molen is not familiar with the Subway case, but he suspects the company received such a letter and opted not to play ball.

Plaintiffs attorneys in the Subway tuna case said they used independent lab tests and found the ingredients were not tuna. But a lab contracted by the TV program Inside Edition found the sub did, indeed, contain tuna.

“Whenever you file a lawsuit, in California and most jurisdictions, you have litigation privilege,” Molen said. “You can say anything you want in a complaint and it can’t come back to you as a plaintiffs lawyer.”

To be sure, such product complaints can be vital for customers, especially when a company claims a product has a certain ingredient when it is something else.

“If they are representing to customers that it’s tuna and it’s a different fish entirely, that really is crossing a line into not delivering,” Wright said. “Also it’s presenting a potential risk to the customer who might have allergies to the substitute ingredient.”

That said, often the issue in false-advertising lawsuits is perception. Different courts could perceive an issue differently, which brings us to the Starbucks vanilla lawsuit.

Molen noted that vanilla is perceived by most customers as a flavor and not necessarily an ingredient, which could be helpful in its defense.

“Subway has to deal with the public relations implications of that even if they can demonstrate that this is total malarky.” -James Molen, attorney with Greenberg Glusker.

Yet false advertising claims can be subjective. Wright brought up a false advertising case MillerCoors brought against Budweiser for Bud Light’s Super Bowl ad claiming that Coors used corn syrup to make its beer. Coors argued that the syrup was burned out during the brewing process, and also noted that the ad suggested that the company used high fructose corn syrup, when it didn’t.

One court agreed that the ad was misleading. But an appellate court overturned that ruling, saying that corn syrup was indeed on Coors’ ingredient list and that it was fair to point it out.

“What’s really interesting in advertising litigation is a lot of it really is perception,” Wright said. “Something can be true but perceived as false.”

Still, companies that are faced with direct challenges by customers to the contents of their products need to take aggressive moves to defend their brand when they occur.

In 2011, for instance, Taco Bell bought full-page ads in major publications after it was sued by customers who claimed that its taco filling wasn’t beef.

The ads read “Thank you for suing us. Here’s the truth about our seasoned beef.” Such ads are not cheap—they could cost $100,000, according to the Huffington Post.

Subway itself has a long history with such actions. The most notable came in 2013, when a customer in Australia took photos of his Subway footlong with a measuring stick, finding they were less than a foot long. The post went viral. The company was sued several times in the U.S. over the length of its subs.

The company argued that all of the bread used for its subs was the same size and weight before it’s baked and that the baking process sometimes led to differences in size. Yet it chose to settle the lawsuits in 2016. The next year an appeals court threw out the settlement, calling it “utterly worthless.”

The chain has also faced some issues outside of false advertising litigation. Last year an Irish court ruled that Subway’s bread had too much sugar to qualify under a decades old definition of bread in that country—even though that definition was more recently changed and Subway’s bread did in fact qualify as bread. And earlier a Canadian investigative television program said DNA tests on its chicken found it was only 50% meat. The franchisor strongly pushed back against the program.

All of which makes Subway’s response to its tuna lawsuit all the more important. “I’m hard-pressed to believe that Subway would [not serve tuna], why a $10 billion company would be playing games like that,” Molen said. “Subway has to deal with the public relations implications of that even if they can demonstrate that this is total malarky.”

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