Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 1 of 14 PageID #:1 BARRY GROSS, ) on behalf of plaintiff and the class ) members described below, ) ) Plaintiff, ) ) IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION vs. ) ) DOCTOR S ASSOCIATES, INC., ) ) Defendant. ) COMPLAINT CLASS ACTION MATTERS COMMON TO MULTIPLE CLAIMS INTRODUCTION 1. Plaintiff Barry Gross brings this action to secure redress against fraudulent marketing practices engaged in by defendant Doctor s Associates, Inc. Defendant pervasively misrepresents that the Footlong submarine sandwiches sold at defendants SUBWAY restaurants are in fact 12 inches in length. In truth, they are less than 12 inches in length. Defendant engaged in pervasive and systematic advertising contrived to induce consumers to believe that they are getting more food for their money than they actually are. JURISDICTION AND VENUE 2. This Court has jurisdiction pursuant to 28 U.S.C. 1332(d). The proposed class involves more than 100 individuals. Plaintiff is a citizen of Illinois. Defendant is a Florida corporation with its principal place of business in Connecticut. The amount of controversy, on a classwide basis, exceeds the sum of $5,000,000 exclusive of interest and costs. 3. Venue is proper in this district under 28 U.S.C. 1391, because a substantial part of the events and omissions giving rise to the claims occurred in this district. PARTIES 4. Plaintiff Barry Gross is, and at all time relevant to this action has been, a resident 1
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 2 of 14 PageID #:2 and citizen of Illinois residing in the Northern District of Illinois. 5. Defendant Doctor's Associates Inc. is a Florida corporation with its principal place of business at 325 BIC Drive, Milford, Connecticut. It does business in Illinois. Its registered agent and office is Illinois Corporation Service Co., 801 Adlai Stevenson Drive, Springfield, IL 62703. FACTS 6. SUBWAY is a registered trademark of defendant. 7. Defendant franchises SUBWAY restaurants throughout the world, including the Northern District of Illinois. 8. Defendant s SUBWAY brand franchise is the world s largest submarine sandwich chain, with more than 38,000 locations around the world, including approximately 24,000 locations in the United States. 9. Defendant and its franchisees heavily market SUBWAY Footlong subs as actually being 12 inches long. 10. This is made clear in defendant s marketing campaigns, which often refer to the measurement unit of one foot, or refer to measurements generally, when advertising the Footlong subs. 11. In fact, the Footlong subs that SUBWAY sells to its customers are materially shorter than the advertised 12 inches. As a result, consumers are receiving less than they are paying for. 12. Defendant s national advertising campaign for SUBWAY Footlong subs has been pervasive and extensive. Defendant has spent a significant amount of money to represent to consumers throughout the United States that its Footlong subs are in fact 12 inches long. Defendant utilizes a wide array of media to convey its claims about SUBWAY Footlong subs, including television, magazines, and the Internet. Through this massive marketing campaign, defendant has conveyed one message about these subs, Footlong subs are actually 2
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 3 of 14 PageID #:3 12 inches in length. Each person who has purchased SUBWAY Footlong subs, including plaintiff, has been exposed to defendant s advertising message and purchased those subs as a result of that advertising. 13. Examples of defendant s advertising that SUBWAY Footlong subs are in fact 12 inches in length are attached as Exhibits A-D. 14. In its advertising materials, defendant repeatedly references the length of the Footlong subs by having its actors (or artists renderings) hold their hands one foot apart, and including a graphic between the actors hands indicating that the hands are 1 FT. apart (Exhibits A-D). 15. Other advertisements do not specifically reference one foot, or 12 inches, but they are designed to show that the Footlong name is associated with a measurement, by, for instance, using arrows to indicate size (Exhibit E). 16. Although SUBWAY restaurants are owned and/or operated by franchisees, defendant: a. Is wholly responsible for the advertising message complained of herein; b. Creates, maintains and enforces strict uniform standards and practices for all aspects of its SUBWAY restaurants, including the length of Footlong subs. 17. On information and belief, defendant has the right of complete or substantial control over all SUBWAY restaurants in that it could implement and direct the policies and practices of those restaurants as well as dictate the restaurants appearance, equipment, menu, hours of operation, employees appearance and demeanor, and marketing and advertising. 18. Defendant designed, created and enforces uniform standards and practices that each of its and its franchisees employees must follow relative to making SUBWAY menu items for customers, including SUBWAY Footlong subs. 19. Employees are required to undergo training programs regarding these uniform 3
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 4 of 14 PageID #:4 standards and practices, and are not permitted to deviate therefrom. 20. Defendant s franchisees are required to get their bread dough from a centralized supply source, which stretches the bread dough out to a pre-set length according to defendant s specifications, and freezes it before delivering the frozen dough to SUBWAY restaurants. This pre-set length specified by defendant is the primary factor in how long SUBWAY Footlong subs will be. 21. Defendant s standards and practices relative to the creation of SUBWAY Footlong subs result in the subs routinely being materially shorter than one foot, or 12 inches, in length. 22. Defendant represents that its centralized operations department of its business enforces standards and provides training and operational assistance to franchisees and field staff. (Subway Student and Educator Resource Guide, attached hereto as Exhibit F, at page 3). 23. Defendant represents that [t]he majority of advertising happens on national TV during prime time, sports and late programming on major broadcast networks and cable networks. Additional advertising occurs via local markets on TV, radio and print. SUBWAY restaurants is also navigating the world of online social media to bring our message closer to consumers. (Resource Guide, Exhibit F, p. 3). 24. Defendant and its franchisees hold themselves out to the general public as one company SUBWAY as evidenced by the fact that the advertising materials, signs, and store appearance all are uniform and identify defendant s franchisees restaurants as SUBWAY. For example, defendant represents that its centralized marketing department of its business presents the public face of SUBWAY. It includes departments like Research & Development, which develops and test markets the food that we serve, and FAF (Franchisee Advertising Fund) responsible for the creation and placement of commercials and print ads. (Resource Guide, Exhibit F, p. 3). 25. Defendant s actions were intended to and did lead plaintiff and class members to 4
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 5 of 14 PageID #:5 believe that all SUBWAY restaurants had uniform standards and practices, and that all menu items would be the same at each SUBWAY restaurant. 26. Plaintiff and class members justifiably relied on defendant s representations that the food would be identical in all material respects at each SUBWAY restaurant. 27. Defendant s advertisements relating to SUBWAY Footlong subs are intended to convey to consumers that the subs are actually 12 inches in length. 28. Defendant receives franchise fees from its franchisees based primarily on sales volume. 29. The franchise fees were increased as a result of the practices at issue. FACTS RELATING TO PLAINTIFF 30. Plaintiff was repeatedly exposed to and saw defendant s advertisements and representations regarding the SUBWAY Footlong subs in Illinois, including in the Northern District of Illinois. 31. On January 23, 2013, after seeing defendant s advertising regarding the Footlong subs, plaintiff purchased a Footlong sub to eat at Subway 40004, located at 1951 Cherry Lane, Meadow Shopping Center, Northbrook, IL 60062. 32. At the time that plaintiff purchased his SUBWAY Footlong sub, defendant was misrepresenting the length of its Footlong subs through the advertising and marketing mediums set forth above, including marketing and advertising materials at the specific store from which plaintiff made his purchase. 33. The sub purchased by plaintiff was materially shorter than 12 inches in length, as shown by Exhibit G. MATERIALITY OF REPRESENTATIONS 34. This is not the first time defendant has engaged in misrepresentations regarding the length of SUBWAY subs. In 2007, it was reported that SUBWAY Giant Sub sandwiches, which were advertised as being 3 feet long, were materially shorter than advertised 5
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 6 of 14 PageID #:6 (i.e. 2 feet 8½ inches long, and the box that they came in was only 2 feet 10¾ inches long). 35. Because of the prior complaints about defendant s advertising, defendant knew that the precise length of SUBWAY subs is material to its customers, and that its customers rely on defendant s representations regarding the length of the subs when purchasing them. 36. Defendant s statements regarding SUBWAY Footlong subs, in conjunction with the impression regarding the length of those subs defendant intended to convey by naming and promoting them as Footlong subs, were false, deceptive and misleading. 37. Plaintiff and the class members purchased SUBWAY Footlong subs in reliance on the foregoing uniform misrepresentations and omissions of the defendant. 38. As a result of SUBWAY Footlong subs not being as long as advertised, plaintiff and the class members received less food then they were promised by defendant, and paid an increased price for the Footlong subs that they would not otherwise have paid. COUNT I CONSUMER FRAUD 39. Plaintiff incorporates paragraphs 1-38. 40. Defendant engaged in unfair and deceptive acts and practices, in violation of 815 ILCS 505/2, by representing that SUBWAY Footlong subs were 12 inches in length, as set forth above. 41. Defendant intended that plaintiff and the class members rely on these misrepresentations. 42. Had defendant provided accurate information, plaintiff and the proposed Class members would not have purchased the SUBWAY Footlong subs or would have paid a lesser amount for them. 43. Defendant made the representations complained of for the purpose of selling subs to plaintiff and the proposed class members. 44. Plaintiff and the class members justifiably relied on the misrepresentations and omissions to their detriment by purchasing the SUBWAY Footlong subs after seeing 6
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 7 of 14 PageID #:7 defendant s advertising. 45. Defendant made no attempt to inform consumers that SUBWAY Footlong subs are not uniformly 12 inches, or one foot, in length. 46. Defendant s false advertising violates public policy and caused substantial injury to consumers. 47. Plaintiff and the class members were damaged as a result. CLASS ALLEGATIONS 48. Plaintiff brings this claim on behalf of a class, pursuant to Fed. R.Civ.P. 23(a) and (b)(3). 49. The class consists of all persons who purchased, in Illinois, SUBWAY Footlong submarine sandwiches that were less than 12 inches long on or after a date 3 years prior to the filing of this action. 50. Excluded from the proposed class are defendant, its respective officers, directors and employees, any entity that has a controlling interest in defendant, and all of its respective employees, affiliates, legal representatives, heirs, successors, or assignees. Claims for personal injury are excluded. 51. The class includes hundreds of thousands or millions of persons. 52. Joinder of all members of the class is impracticable. 53. There are questions of law and fact common to the class members, which predominate over any individual issues. The common questions include: a. Whether defendant represented that SUBWAY Footlong subs were 12 inches, in length; b. Whether defendant failed to disclose that SUBWAY Footlong subs were less than 12 inches in length; c. Whether defendant s claims regarding the SUBWAY Footlong subs are deceptive or misleading; 7
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 8 of 14 PageID #:8 d. Whether defendant violated 815 ILCS 505/2; e. Whether defendant s advertising violates public policy; f. The measure of damages. 54. Plaintiff s claims are typical of the claims of the class members. All are based on the same legal and factual theories. 55. Plaintiff will fairly and adequately represent and protect the interests of the class. Plaintiff does not have any interests antagonistic to those of the class members. Plaintiff has retained counsel experienced in the prosecution of consumer class actions. 56. A class action is superior to other available methods for the fair and efficient adjudication of this controversy. Individual litigation is not economically feasible. WHEREFORE, plaintiff requests that the Court enter judgment in favor of plaintiff and the class for: a. Compensatory damages; b. Punitive damages; c. Disgorgement of profits; d. Injunctive relief against the practices complained of; e. Attorney s fees, litigation expenses and costs of suit; f. Such other relief as the Court deems just and appropriate. COUNT II EXPRESS WARRANTY 57. Plaintiff incorporates paragraphs 1-38. 58. Defendant s representations, as set forth above, became part of the basis of the bargain and created an express warranty that each Footlong sub was not less than 12 inches in length. 59. The warranty was breached by the sale of SUBWAY Footlong subs that were not 12 inches in length. 60. Plaintiff and the class members were damaged as a result. 8
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 9 of 14 PageID #:9 61. Notice of breach of warranty has been given to defendant. CLASS ALLEGATIONS 62. Plaintiff brings this claim on behalf of a class, pursuant to Fed. R.Civ.P. 23(a) and (b)(3). 63. The class consists of all persons, except those in Louisiana, who purchased SUBWAY Footlong submarine sandwiches that were less than 12 inches long on or after a date 4 years prior to the filing of this action. 64. Excluded from the proposed class are defendant, its respective officers, directors and employees, any entity that has a controlling interest in defendant, and all of its respective employees, affiliates, legal representatives, heirs, successors, or assignees. Claims for personal injury are excluded. 65. The class includes hundreds of thousands or millions of persons. 66. Joinder of all members of the class is impracticable. 67. There are questions of law and fact common to the class members, which predominate over any individual issues. The common questions include: a. Whether defendant represented that SUBWAY Footlong subs were 12 inches, in length; b. Whether such representations created an express warranty; c. Whether the warranty was breached; d. The appropriate relief. 68. Plaintiff s claims are typical of the claims of the class members. All are based on the same legal and factual theories. 69. Plaintiff will fairly and adequately represent and protect the interests of the class. Plaintiff does not have any interests antagonistic to those of the class members. Plaintiff has retained counsel experienced in the prosecution of consumer class actions. 70. A class action is superior to other available methods for the fair and efficient 9
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 10 of 14 PageID #:10 adjudication of this controversy. Individual litigation is not economically feasible. WHEREFORE, plaintiff requests that the Court enter judgment in favor of plaintiff and the class for: a. Compensatory damages; b. Costs; c. Such other relief as the Court deems just and appropriate. COUNT III UNJUST ENRICHMENT 71. Plaintiff incorporates paragraphs 1-38. 72. Defendant s conduct, as set forth above, resulted in it obtaining money that it should not be permitted to retain in equity and good conscience. 73. Defendant s retention of the full amount of monies paid for the SUBWAY Footlong subs violates principles of justice, equity, and good conscience. 74. It would be inequitable for the defendant to retain the benefit of those monies, as it obtained the money through false advertising. CLASS ALLEGATIONS 75. Plaintiff brings this claim on behalf of a class, pursuant to Fed. R.Civ.P. 23(a) and (b)(3). 76. The class consists of all persons who purchased SUBWAY Footlong submarine sandwiches that were less than 12 inches long on or after a date 5 years prior to the filing of this action. 77. Excluded from the proposed class are defendant, its respective officers, directors and employees, any entity that has a controlling interest in defendant, and all of its respective employees, affiliates, legal representatives, heirs, successors, or assignees. Claims for personal injury are excluded. 78. The class includes hundreds of thousands or millions of persons. 79. Joinder of all members of the class is impracticable. 10
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 11 of 14 PageID #:11 80. There are questions of law and fact common to the class members, which predominate over any individual issues. The common questions include: a. Whether defendant represented that SUBWAY Footlong subs were 12 inches, in length; b. Whether defendant failed to disclose that SUBWAY Footlong subs were less than 12 inches in length; c. Whether defendant s claims regarding the SUBWAY Footlong subs are deceptive or misleading; d. Whether defendant was unjustly enriched as a result; e. The appropriate relief. 81. Plaintiff s claims are typical of the claims of the class members. All are based on the same legal and factual theories. 82. Plaintiff will fairly and adequately represent and protect the interests of the class. Plaintiff does not have any interests antagonistic to those of the class members. Plaintiff has retained counsel experienced in the prosecution of consumer class actions. 83. A class action is superior to other available methods for the fair and efficient adjudication of this controversy. Individual litigation is not economically feasible. WHEREFORE, plaintiff requests that the Court enter judgment in favor of plaintiff and the class for: a. Restitutionary damages; b. Disgorgement of profits; c. Costs; d. Such other relief as the Court deems just and appropriate. s/daniel A. Edelman Daniel A. Edelman 11
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 12 of 14 PageID #:12 Daniel A. Edelman Cathleen M. Combs James O. Latturner Francis R. Greene EDELMAN, COMBS, LATTURNER & GOODWIN, LLC 120 S. LaSalle Street, Suite 1800 Chicago, Illinois 60603-3593 (312) 739-4200 (312) 419-0379 (FAX) Email address for service: courtecl@edcombs.com 12
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 13 of 14 PageID #:13 Plaintiff demands trial by jury. JURY DEMAND s/daniel A. Edelman Daniel A. Edelman 13
Case: 1:13-cv-00601 Document #: 1 Filed: 01/24/13 Page 14 of 14 PageID #:14 NOTICE OF LIEN AND ASSIGNMENT Please be advised that we claim a lien upon any recovery herein for 1/3 or such amount as a court awards. All rights relating to attorney s fees have been assigned to counsel. s/daniel A. Edelman Daniel A. Edelman Daniel A. Edelman EDELMAN, COMBS, LATTURNER & GOODWIN, LLC 120 S. LaSalle Street, 18th Floor Chicago, Illinois 60603 (312) 739-4200 (312) 419-0379 (FAX) 14