Legal Roundup: Subway’s in a Tuna Scandal, NJ Transit Settles Case After Sandy Damages and More

The latest court filings and cases that will have an impact on the risk management and insurance industry.
By: | February 3, 2021

Subway’s Tuna Doesn’t Contain Tuna — Restaurant Says Claim Has No Bite

The Case: Karen Dhanowa and Nilima Amin sued Subway, claiming its tuna subs don’t actually contain the fish.

Advertisement


Court documents say “independent testing has repeatedly affirmed, the products are made from anything but tuna,” according to the New York Post. Instead it’s a grouping of other products blended together and presented as tuna, the suit alleges.

Subway vehemently denies the claims and says this is part of an ongoing effort by the plaintiff’s attorneys to target the food industry. The restaurant says the plaintiffs “have brought claims of fraud, intentional misrepresentation, negligent misrepresentation and unjust enrichment against the company,” according to the New York Post.

Scorecard: The case has recently been filed and has not come to a resolution.

Takeaway: It’s far too early to know if the tests done by the plaintiffs are legitimate. But the bad press for Subway poses a significant reputational risk as major news organizations like the Washington Post, CBS News and USA Today have written about the case.

A Subway spokesperson alluded to that risk when providing comment, saying the allegations “threaten to damage our franchisees, small business owners who work tirelessly to uphold the high standards that Subway sets for all of its products, including its tuna,” according to the New York Post.

Utility to Pay $2.2B in Wildfire Settlement

The Case: After the Woolsey Fire burned 97,000 acres in Ventura and Los Angeles counties, insurance companies sued utility Southern California Edison.

The fire came about a year after the Thomas Fire which burned 281,893 acres between Ventura and Santa Barbara counties.

The Associated Press reported: “Investigations determined Edison equipment sparked both the Woolsey and Thomas fires. In recent years, utility equipment has been blamed for multiple wildfires across the state.”

Scorecard: Southern California Edison agreed to pay $2.2 billion to settle the insurance claims.

The Ventura County Star reported that the company “has now settled with all insurance companies that sued over the Woolsey Fire, Thomas Fire and Montecito mudslides. Edison admitted no wrongdoing or liability in reaching the settlements.”

Takeaway: It’s not the first time a utility was forced to pay for wildfire claims. The Associated Press reports: “The state’s largest utility, Pacific Gas & Electric, was forced into bankruptcy in 2019 after facing liability for devastating blazes in Northern California.” And with wildfires growing in severity and spread year over year, utility companies can expect the pressure to continue.

NJ Transit Is Due Additional $300 Million for Sandy Damage

The Case: In the wake of Superstorm Sandy, New Jersey Transit found that locomotives and railcars in the agency’s Meadowlands Maintenance Complex were damaged. That led to a $400 million claim but insurers said the incident should be subject to a $100 million limit.

NJ.com reports: “At the time Sandy struck New Jersey in October 2012, NJ Transit carried a $400 million multi-layered property insurance policy program through eleven insurers. When NJ Transit sought coverage for the water damage to its properties brought about by the storm, some insurers invoked a $100 million limit on flood damage claims in NJ Transit’s policies and declined to provide coverage up to the policy limit.”

Advertisement


Scorecard: The New Jersey Supreme Court agreed with a lower court ruling that NJ Transit should not be subject to the $100 million limit — meaning the agency has the right to another $300 million in coverage.

Lloyd of London, Maiden Specialty Insurance Company, RSUI Indemnity Company and Westport Insurance Corporation had appealed the lower court ruling.

Takeaway: The long tail of such a disastrous storm is still playing out in the courts. &

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Matrix: Presented by Liberty Mutual Insurance

10 Severe Weather Risks Affecting Businesses’ Property and More

Every year, severe weather costs approximately $630 billion for the U.S. But this is not a property issue alone; several lines are feeling the strain.
By: | June 1, 2021




The R&I Editorial Team can be reached at [email protected]