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Wednesday, September 17, 2014

Jimmy John's Sprouts Class Action Results in Cookie Settlement

These are the terms of a settlement agreement reached by Jimmy Johns in light of a recent class action lawsuit filed against the sandwich chain.

Heather Stark claimed that she ordered a sandwich containing sprouts and did not get sprouts on her sandwich. Rather than ask for sprouts or a new sandwich, Stark did what any red-blooded American would do and sued, arguing (according to the settlement agreement):

 (1) interference with contract; (2) intentional misrepresentation; (3) negligent misrepresentation, (4) fraud; (5) violation of California’s False Advertising Act, California Business and Professions Code sections 17500, et seq.; (6) violation of California’s Business and Professions Code sections 17200, et seq.; (7) Violation of California’s Consumers Legal Remedies Act, Civil Code sections 1750, et seq.; and (8) Violation of the federal Lanham Act, 15 U.S.C. § 1125. 

As a brief note on the last count of the complaint, it has always been my understanding that consumers typically lack standing to sue under the Lanham Act, and causes of actions arising under this statute are limited to business competitors (see, for example, commentary on the law here and here).

Unfortunately, lawyers would probably charge tens of thousands of dollars to make that point in court. So Jimmy Johns has proposed a settlement agreement which you can read here. Here is the part that everybody should know:

Without admitting liability, Defendant has agreed to provide vouchers to any Jimmy John’s restaurants, with a face value of $1.40 and good for any side item (pickle, potato chips or cookie) or soda, to all participating claimants who timely complete the online claim form available on, up to a maximum of $725,000.00 less the actual costs of the settlement administration.
The rest of the settlement agreement goes on to say that the fairness of this settlement will be evaluated in court on December 4, 2014.

Admittedly the vouchers can be used to purchase a variety of items, but the quality of Jimmy John's cookies renders all the other options void. Because of this, and because I am mindful of those who have suffered without sprouts, I encourage my readers to pay careful attention to the progress of this litigation.

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