By Latoya R. Laing, Thomas E. Ahlering, and Erin Dougherty Foley

Seyfarth Synopsis: Following an opinion by the Illinois Supreme Court, the 9th Circuit will discuss the Illinois Biometric Privacy Act issue — whether the Act requires class plaintiffs to show that they suffered actual harm in order to seek statutory damages and injunctive relief. A California District Court certified a class of Illinois users who claim Facebook used their biometric data in a way that violated the Illinois Biometric Privacy Act. Facebook appealed the ruling arguing that the plaintiffs could not be considered “aggrieved” individuals as required by the statute.

The Case — Patel et. al. v. Facebook Inc., Case No. 18-80052, — is pending in the U. S. Court of Appeals for the Ninth Circuit. Plaintiffs allege that Facebook violated Illinois’ BIPA when it unlawfully collected and stored biometric data on Facebook users without prior notice or consent. 2018 U.S. Dist. LEXIS 30727, *4.

Facebook filed a motion to dismiss the class action, asserting that plaintiffs lacked standing under Article III. Facebook argued that the collection of biometric information without notice or consent did not result in “real-world harms.”

The District Court denied Facebook’s motion, noting that BIPA’s plain language supported a finding of standing. The court pointed to the subsections of the BIPA in so much that it “vested in Illinois residents the right to control their biometric information by requiring notice before collection and giving residents the power to say no by withholding consent.” Since the plaintiffs in this case were never offered the opportunity to withhold consent, the court rejected Facebook’s argument and found standing satisfied under the allegations. The District Court went on to certify the plaintiffs as a class; Facebook appealed the certification to the 9th circuit. The Court will issue an opinion on the appeal in the coming months.

In 2017 we blogged about an Illinois Appellate Court ruling which held that a Plaintiff must allege an actual injury to be “aggrieved” under the Act in order to seek statutory damages and injunctive relief. In that decision, the Court noted that “if the Illinois legislature intended to allow for a private cause of action for every technical violation of the Act, it could have omitted the word ‘aggrieved’ and stated that every violation was actionable.” Rosenbach v. Six Flags Entertainment Corp., 2017 IL App (2d) 170317, *4.

The decision represented a win for employers because class action suits brought under the BIPA frequently consist of cookie cutter complaints merely alleging technical violations of the BIPA (i.e., failure to obtain written consent, failure to maintain a “publicly available” biometric privacy plan, and failure to provide notice of biometric retention and destruction policies) and not an actual injury (i.e., identity theft). Plaintiffs in Rosenbach filed an appeal to the Illinois Supreme Court; Oral arguments were heard on November 20, 2018.

On September 28, 2018, the Illinois Appellate Court in the First District held that a statutory violation alone was sufficient to establish standing in BIPA claims. In Sekura v. Krishna Schaumburg Tan, Inc., 2018 IL App (1st) 180175, the Court held that “the Act does not require actual harm in addition to a violation of the Act to file suit” pursuant to “both the plain language of the statute itself and its legislative history and purpose.” In Sekura, the Plaintiff purchased a membership with L.A. Tan, which required her to scan her fingerprint.

In her complaint, the Plaintiff noted that L.A. Tan (1) never informed her of the specific purpose or length of time for which her information was stored, (2) that she was never informed of any biometric data retention policy, (3) she never signed, nor was she provided with a written release allowing L.A. Tan to collect or store her fingerprints, and (4) she never signed a release allowing L.A. Tan to disclose her biometric data with any third party.

The Court found this sufficient to satisfy the “aggrieved” person standard as required by the Act, reversing the Trial Court’s decision. Defendant Schaumburg Tan, Inc., appealed the Appellate Court’s Decision, an opinion on the case is pending.

On January 25, 2019, the Illinois Supreme Court issued a decision which reversed the Illinois Appellate Court decision in Rosenbach. The Supreme Court focused its analysis on the basic principles of statutory construction and the Illinois legislature’s intent when drafting the Act.

A person may be “aggrieved” when “a legal right is invaded by the act complained of or his pecuniary interest is directly affected by the decree or judgment.” The term “aggrieved” has been defined this way by Illinois courts long before the creation of the BIPA. The Court noted the Illinois legislature must have been “aware of that precedent and acted accordingly” when drafting the BIPA. Section 15 of the BIPA imposes a duty upon private entities with regard to the collection, retention, disclosure, and destruction of a person’s or customer’s biometric identifiers. Because section 20 of the BIPA authorizes a private right of action, — and offers no other enforcement mechanism — the Court provides that “it is clear the legislature intended for this provision to have substantial force.”

Ultimately, the Court held that “an individual need not allege some actual injury or adverse effect, beyond violation of his or her rights under the Act, in order to qualify as an ‘aggrieved’ person.”

Class action lawsuits alleging violations of BIPA have increased tremendously over the last few years. Following the Supreme Court’s decision, it is likely that the number of BIPA cases filed will continue to increase. Therefore, employers should remain vigilant and ensure that they are in compliance with the BIPA’s requirements.

Employers with questions or concerns about any of these issues or topics are encouraged to reach out to the authors, your Seyfarth attorney, or any member of the Workplace Counseling & Solutions Team.

 

By Esther Slater McDonald, Paul Yovanic Jr. and Thomas E. Ahlering

Seyfarth Synopsis: In light of the uncertainties surrounding lawsuits alleging violations of the Illinois Information Biometric Privacy Act (BIPA), the Northern District of California has taken a firm position on a plaintiff’s Article III standing. U.S. District Judge James Donato delivered opinions in In re Facebook Biometric Info. Privacy Litig., Case No. 15-CV-03747; 2018 U.S. Dist. LEXIS 30727 (N.D. Cal. Feb. 26, 2018) and Gullen v. Facebook Inc., Case No. 16-CV-00937; 2018 U.S. Dist. LEXIS 34792 (N.D. Cal. March 2, 2018), denying Facebook’s motions to dismiss for lack of subject matter jurisdiction in both cases. The court held that plaintiffs’ Article III standing was satisfied through mere collection of biometric information.

The decisions provide plaintiffs the ability to get their feet in the door and threaten businesses and employers alike. The court dismissed Facebook’s argument that Article III standing requires “real-world harms,” stating that the argument exceeds the law. Instead, the court held that a plaintiff has standing when they are deprived of procedures that protect statutorily protected interests, similar to the procedures outlined in the BIPA.

The In Re Facebook Decision

In In Re Facebook, plaintiffs allege that Facebook violated the BIPA when it unlawfully collected and stored biometric data on Facebook users without prior notice or consent. 2018 U.S. Dist. LEXIS 30727, *4. Plaintiffs’ claims arise out of Facebook’s “Tag Suggestions,” which identifies other Facebook users through scanning uploaded photographs. Id. Plaintiffs allege that Facebook creates and stores digital representations of people’s faces based on the geometric relationship of facial features unique to each individual. Id. Facebook moved to dismiss the class action, asserting that plaintiffs lacked standing under Article III because the collection of biometric information without notice or consent did not result in “real-world harms,” “such as adverse employment or even just anxiety.” Id. at *13.

The court denied Facebook’s motion to dismiss, holding that Facebook’s standing argument exceeds the law. Id. In support of its decision, the court looked to the plain language of the BIPA stating, “BIPA expresses the judgments of the Illinois legislature about the rights of Illinois citizens with respect to the collection of personal biometric data by corporations and businesses.” Id. at *10. There, the court pointed to the subsections of the BIPA in so much that it “vested in Illinois residents the right to control their biometric information by requiring notice before collection and giving residents the power to say no by withholding consent.” Id. at *11. Since the plaintiffs in this case were never offered the opportunity to withhold consent, the court rejected Facebook’s argument and found standing satisfied under the allegations. Id. at *12.

The Gullen Decision

The Gullen case was consolidated with In Re Facebook. The primary difference between the two actions is that the Gullen plaintiff is not a Facebook user, and he challenges Facebook’s practices as to non-users. See 2018 U.S. Dist. LEXIS 34792, *2. Similar to the In Re Facebook plaintiffs, the Gullen plaintiff alleges that Facebook stores non-user biometric data when it scans photographs to recommend additional user “tags.” Id. In denying Facebook’s motion to dismiss for lack of standing, the court relied on the reasoning in In Re Facebook, holding that standing is satisfied when there is an unconsented storage of biometric data. Id.

Analysis And Implications

Judge Donato’s disregard for real-world harm creates uncertainty on an otherwise untested statute. His decisions are inapposite to recent Illinois Appellate Court decision Rosenbach v. Six Flags Entertainment Corp., 2017 IL App (2d) 170317, which found that actual, real-world harm must be established to be considered an “aggrieved person” under the BIPA. Id. at ¶ 23. Where, Rosenbach closed the door to claims that did not involve some sort of actual, real-world harm, Judge Donato seems to have reopened that door (for purposes of Article III standing), leaving businesses and employers vulnerable to BIPA claims for collection of biometric data, regardless of whether the plaintiff is aggrieved. It is possible, though, that other courts may blunt the practical impact of Judge Donato’s opinions by holding that they do not address whether real-world harm is required to state a claim. While a mere technical violation of the BIPA may open the courthouse doors (at least in federal court), BIPA’s “aggrieved person” language may require a plaintiff to show a real-world harm to remain in court and state a claim under the statute.

By Gerald L. Maatman, Jr. and Thomas E. Ahlering

Seyfarth Synopsis:  As the number of class action lawsuits alleging violations of the Illinois Information Biometric Privacy Act (“BIPA”) has exploded in the last six months, defendants have been eagerly awaiting guidance from an Illinois appellate court regarding what a Plaintiff must allege in order to have a viable right of action under the statute. In Rosenbach v. Six Flags, 2017 IL App (2d) 170317 (Ill. App. Ct., Dec. 21, 2017), the Illinois Appellate Court for the Second District issued the first such ruling in this area, holding that a Plaintiff must allege an actual injury to be “aggrieved” under the Act in order to seek statutory damages and injunctive relief. 

The decision represents a significant victory for employers because defendants in both federal and state courts – facing potentially catastrophic damages under the statute for implementation of biometric technology for various purposes, including timekeeping practices – have made similar arguments that plaintiffs alleging mere technical violations of the statute are not “persons aggrieved,” thereby entitling plaintiffs to statutory damages and injunctive relief.  The decision in Rosenbach provides clarity as to the viability of certain potential employer defenses in BIPA class actions, particularly at the motion to dismiss stage.  Most notably, the decision will almost certainly serve to shift the tide in favor of employers facing BIPA class actions.

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The Illinois Appellate Court’s Decision

In Rosenbach, Plaintiff, as the mother of her minor son, brought a class action on behalf of herself and all others similarly-situated, alleging that Defendants Six Flags Entertainment Corp. (“Six Flags”) and Great America LLC (“Great America”) violated the BIPA when her son purchased a season pass for Great America theme park and defendants fingerprinted him using a biometric scanner without obtaining written consent or disclosing their plan for the collection, storage, use, or destruction of his biometric identifiers or information.  Rosenbach,  2017 IL App (2d) 170317, *1.  Defendants moved to dismiss on the grounds that Plaintiff was not a “person aggrieved by a violation” of the BIPA as required by the statute in order for a Plaintiff to have a right of action because Plaintiff alleged mere technical violations of the statute.  Id. (quoting 740 ILCS 14/20).

The trial court denied the motion to dismiss, but later certified two questions for appellate review relating to whether a person aggrieved by a violation of the BIPA must allege some actual harm, including: (1) whether an individual is an aggrieved person under section 20 of BIPA and may seek statutory damages authorized under the BIPA when the only injury he or she alleges is a violation that a defendant collected his or her biometric identifiers and/or biometric information without providing him or her the disclosures and obtaining written consent; and (2) whether an individual is an aggrieved person under section 20 of the BIPA and may seek injunctive relief authorized under the BIPA when the only injury he or she alleges is a violation that a defendant collected his or her biometric identifiers and/or biometric information without providing him or her the disclosures and obtaining written consent.  Id. *3.

The Illinois Appellate Court answered both questions in the negative and held that a Plaintiff must allege an actual injury to be “aggrieved” under the Act.  In so holding, the Illinois Appellate Court analyzed the plain language of the statute and consulted various definitions of “aggrieved,” including Black’s Law Dictionary, to find that “there must be actual injury, adverse effect, or harm in order for [a] person to be ‘aggrieved.’”  Id.

It further noted:

Likewise, if the Illinois legislature intended to allow for a private cause of action for every technical violation of the Act, it could have omitted the word “aggrieved” and stated that every violation was actionable. A determination that a technical violation of the statute is actionable would render the word “aggrieved” superfluous. Therefore, a plaintiff who alleges only a technical violation of the statute without alleging some injury or adverse effect is not an aggrieved person under section 20 of the Act.

Id. *4.

In sum, the primary holding of the case is that “[i]f a person alleges only a technical violation of the Act without alleging any injury or adverse effect, then he or she is not aggrieved and may not recover under any of the provisions in section 20.”  Id. *5.

Analysis And Implications For Employers

The Illinois Appellate Court’s decision constitutes a significant victory for employers facing BIPA class actions.

Most notably, the Illinois Appellate Court held that a Plaintiff cannot proceed on a claim for either statutory damages or injunctive relief for mere technical violations of the statute.  This holding is key for employers because class actions brought under the BIPA frequently consist of cookie cutter complaints which merely allege technical violations of the BIPA (i.e., failure to obtain written consent, failure to maintain a “publically available” biometric privacy plan, and failure to provide notice of biometric retention and destruction policies) and not an actual injury (i.e., identity theft).

While the decision represents a significant decision at this juncture in favor of employers, we anticipate that the Plaintiffs’ class action bar will continue to attempt craft creative arguments to circumvent this ruling and find a way to argue that an individual is an “aggrieved person” for purposes of the BIPA.

Accordingly, employers should remain vigilant and ensure that they are in compliance with the BIPA’s requirements to ensure that a mere “technical” violation of the statute does not result in something which could constitute an actual injury entitling an individual to pursue statutory damages and injunctive relief.