BiometricsIllinois Appellate Court Finds that Statute of Limitations for BIPA Claims Could be as Much as Five Years, Adding to Already Considerable Class Action Exposure

Illinois Appellate Court Finds that Statute of Limitations for BIPA Claims Could be as Much as Five Years, Adding to Already Considerable Class Action Exposure

On September 17, 2021, the First District of the Illinois Appellate Court issued the first appellate opinion regarding the applicable statute of limitations for claims arising under Illinois’ Biometric Information Privacy Act (“BIPA”).  In a mixed decision, the First District found that the limitations period could range from 1 year to as much as 5 years depending on the nature of the alleged violation at issue.

 

The implications of the First District’s decision are momentous, because many BIPA lawsuits are class actions.  In addition to expanding the pool of potential plaintiffs, a five-year limitations period greatly increases the potential class size and, consequently, defendants’ potential damages exposure.

 

Background

By way of background, Illinois enacted BIPA in 2008 after a company called Pay-by-Touch started a pilot program at Chicago-area retail stores to enable customers to pay for purchases using fingerprint scans linked to their credit cards. When Pay-by-Touch subsequently filed for bankruptcy after collecting customers’ biometric and financial account information, the bankruptcy trustee listed the customers’ biometric information as an asset and sought to sell it to pay off creditors.  This motivated the Illinois legislature to enact BIPA.

 

BIPA’s Requirements

BIPA contains five different subsections regulating the use of biometric information.  The differences between the following five subsections were critical to the First District’s decision:

  • First, anyone in possession of biometric information must develop a publicly-available retention policy.

 

  • Second, prior to collecting any biometric information, the collecting party must disclose the purpose and length of time for which the information will be used, and obtain a release from the subject of the information.

 

  • Third, biometric information cannot be disclosed without the authorization of the subject.

 

  • Fourth, a party cannot profit from the sale of biometric information under any circumstances.

 

  • Finally, a party must protect biometric information using the standard of care in the industry, and at least the same protection measures that the party uses for other personal and confidential information.

 

Debate Over Limitations Period

BIPA itself does not specify the applicable statute of limitations, and the plaintiff and defense bars have disagreed on the applicable limitations period.  Prior to the First District’s decision, the litigation in the trial courts has centered around three potential limitations periods, including the following:

  • One-year period for actions based on “publication of matter violating the right of privacy.” 735 ILCS 5/13-201;

 

  • Two-year period for personal injuries or “statutory penalties.” 735 ILCS 5/13-202; or

 

  • Five-year period for “all civil actions not otherwise provided for.” 735 ILCS 5/13-205.

 

The Subject Lawsuit

An employee sued his former employer alleging that his employer required him to clock-in for work using a biometric time clock, and that his employer violated BIPA by failing to obtain his informed consent, failing to have a retention policy, and disclosing his information to third parties such as the time clock vendor.

 

The plaintiff stopped working for the defendant in January 2018, and he filed suit in March 2019.  The employer moved to dismiss the lawsuit, arguing that the suit was time-barred because the one-year limitations period for “publication of matter violating the right of privacy” applied.  The plaintiff of course disagreed and argued that the five-year period for “civil actions not otherwise provided for” applied.  The trial court agreed with the plaintiff but certified the question for interlocutory appeal.

 

The Appellate Court’s Decision

On appeal, the First District found that the applicable limitations period depends on which of the five BIPA subsections is at issue.  More specifically, the First District found that the one-year limitations period is limited to matters involving “publication.”  Using this framework, the First District found that only two of BIPA’s subsections involve publication: the prohibition of unauthorized disclosure and the prohibition of the sale of biometric information.  On the other hand, the First District found that the other three requirements (the retention policy requirement, informed consent requirement, and standard of care requirement) can be violated without any publication, and therefore are subject to the five-year limitations period.

 

For the case at hand then, applying the First District’s decision means that the plaintiff’s allegations regarding his employer’s failure to obtain his informed consent and failure to have a retention policy were subject to the five-year limitations period and therefore timely.  In contrast, the plaintiff’s allegations of unauthorized disclosure were subject to the one-year limitations period and therefore barred.

 

Not the Last Word

The First District’s decision likely will not be the last word on the limitations period for BIPA claims.  A separate appeal regarding the limitations period for BIPA claims – Marion v. Ring Container Technologies – is pending in Illinois’ Third District. (The First District covers Chicago, and the Third District covers North-Central Illinois and Chicago’s southern suburbs). The parties to both cases are likely to seek further appeal to the Illinois Supreme Court, and the Supreme Court will have a good reason to weigh in on the novel issue, especially if the Third District reaches a contradictory decision.

 

It is also noteworthy that the First District’s decision did not address the potentially applicable two-year limitations period for “statutory penalties.”

 

Potential Legislative Reform

In addition to these appellate decisions, the Illinois legislature could also take action.  In its spring term, the legislature advanced a bill out of committee that would dramatically reform BIPA.  The legislature did not hold a final vote on that bill before the conclusion of its spring term, but new appellate decisions could motivate the legislature to renew the reform effort.

 

Beckage will continue to monitor any developments regarding BIPA and will update its guidance accordingly.  Our team of experienced attorneys, who are also devoted technologists, are especially equipped with the skills and experience necessary to not only develop a comprehensive and scalable biometric privacy compliance program but also handle any resulting litigation.

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BiometricsIn the Face of Huge Settlements, BIPA May Soon Be Losing Its Bite

In the Face of Huge Settlements, BIPA May Soon Be Losing Its Bite

Illinois lawmakers are considering a bill which has the potential to dramatically rein in the state’s strict Biometric Information Privacy Act (“BIPA”).  On March 9, 2021, the Illinois House judiciary committee advanced House Bill 559 (the “Bill”) which would amend BIPA.  The Bill has a couple of key amendments that may impact your business.

First, the Bill changes BIPA’s “written release” requirement to instead simply require “written consent”.  Thus, under the Bill, businesses would no longer be required obtain written release, but instead could rely on electronic consent.

Second, whereas BIPA currently requires that a business in possession of biometric identifiers draft and provide a written policy regarding its handling of biometric data to the general public, under the Bill, businesses would only be required to provide this written policy to affected data subjects.

Third, the Bill creates a one-year statute of limitations for BIPA claims.  Moreover, the Bill provides that prior to initiating a claim, a data subject must provide a business with 30 days’ written notice identifying the alleged violations.  If the business cures these violations within the 30 day window, and provides the data subject an express written statement indicating the issues have been corrected and that no further violations shall occur, then no action for individual statutory damages or class-wide statutory damages can be taken against the business.  If the business continues to violate BIPA in breach of the express written statement, then the data subject can initiate an action against the business to enforce the written statement and may pursue statutory damages.  Therefore, not only does the Bill finally create a statute of limitations, but also provides a mechanism by which businesses can respond to alleged violations of BIPA prior to engaging in costly litigation.

Fourth, the Bill modifies BIPA’s damages provisions.  Currently BIPA provides that prevailing plaintiff is entitled liquidated damages of $1,000 or actual damages, whichever is greater, when a business is found to have negligently violated BIPA.  The Bill would limit a prevailing plaintiff’s recovery to only actual damages.  Similarly, in its current form, BIPA provides that a prevailing plaintiff is entitled to liquidated damages of $5,000 or actual damages, whichever is greater, when a business is found to have willfully violated BIPA.  The Bill would limit a prevailing plaintiff’s recovery to actual damages plus liquidated damages up to the amount of actual damages.  Therefore, the Bill would limit a businesses exposure in BIPA claims to what a prevailing Plaintiff can demonstrate as actual damages.

Finally, the Bill provides that BIPA would not apply to a business’ employees if the those employees were covered by a collective bargaining agreement.  Something which has been at issue in recent BIPA litigation as discussed here.

BIPA litigation has increased dramatically and resulted in a number of recent high-profile settlements, including TikTok’s $92 million dollar settlement and Facebook’s $650 million dollar settlement.  This Bill has the potential to greatly curtail this spiral of litigation and high settlement figures.  Beckage will continue to monitor any developments regarding the Bill and will update its guidance accordingly.  Our team of experienced attorneys, who are also devoted technologists, are especially equipped with the skills and experience necessary to not only develop a comprehensive and scalable biometric privacy compliance program but also handle any resulting litigation.

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FingerprintBiometric Litigation Continues To Rise As Businesses Work To Minimize Risk

Biometric Litigation Continues To Rise As Businesses Work To Minimize Risk

In 2008, Illinois enacted the Illinois Biometric Information Privacy Act (“BIPA”) with the purpose of recognizing a person’s privacy right to their “biometric information” and “biometric identifiers”.  BIPA was enacted in response to the growing use of biometrics by businesses.   

In part because of its private right of action, by which plaintiffs may bring suit against businesses directly, BIPA litigation remains at the forefront of the data privacy litigation landscape as businesses continue to collect the biometric identifiers of their employees.  Recent BIPA class action settlements with major tech companies like Facebook and TikTok have been in the hundreds of millions of dollars, but the majority of BIPA litigation is brought against small and medium sized enterprises who collect biometric information in employee timekeeping or for access controls to physical spaces.   

To date, defendants have found courts to be generally unwilling to dismiss BIPA litigation at early motion practice.  Two recent cases, Thornley v. Clearview AI and Barton v. Swan Surfaces, demonstrate that there are some potential limits to BIPA litigation. 

Thornley  v. Clearview AI 

In Thornley, Melissa Thornley accused Clearview AI of scaping publicly available photos from her social media accounts for facial recognition purposes and selling her biometric information to third parties without her consent.  Thornley v. Clearview AI, Inc., 984 F.3d 1241, 1242-1243 (7th Cir. 2021).  Thornley initially filed a complaint in Illinois state court, alleging as a class representative, that Clearview violated § 15(c) of BIPA, which requires in relevant part, that “[n]o private entity in possession of a biometric identifier or biometric information may sell, lease, trade, or otherwise profit from a person’s or a customer’s biometric identifier or biometric information.”  Id. at 1246.  Clearview removed the case to federal court on the basis that the allegation of a statutory violation gave rise to a concrete and particularized injury-in-fact that is necessary for Article III standing.  Id. at 1243.  Under the Constitution, a plaintiff must have Article III standing to sue in federal court, which requires that the plaintiff prove: (1) an injury in fact; (2) causation of the injury by the defendant; and (3) that the injury is likely to be redressed by the requested relief.  See Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).  In Spokeo, the Supreme Court of the United States held that a statutory violation could be sufficient to constitute an injury in fact; however, it did not provide any analysis as to which types of statutory violations necessarily implicate concrete and particularized injuries in fact.  Id.   

The district court held that Clearview alleged violation of § 15(c) of BIPA was “only a bare statutory violation, not the kind of concrete and particularized harm that would support standing”, the case must be remanded to the state court.  Thornley., 984 F.3d at 1242.  Clearview then appealed to the Seventh Circuit, who concurred with the District Court and remanded the case back to the Illinois State Court for much the same lack of standing.  Id.  Clearview has now petitioned the Supreme Court of the United States to take its case.  See Porter Wells, Clearview AI Will Take BIPA Standing Challenge to Supreme Court. 

Barton v. Swan Surfaces, LLC 

In Barton, a unionized employee of Swan Surfaces, LLC (“Swan”) was required to clock in and out of her employer’s manufacturing plant using her fingerprints as part of company protocol.  Barton v. Swan Surfaces, LLC, No. No. 20-cv-499-SPM, 2021 WL 793983 at *1 (S.D. Ill March 2, 2021).  On May 29, 2020 Barton filed a complaint in the United States District Court for the Southern District of Illinois alleging that she represented a class of individuals who “while residing in the State of Illinois, had their fingerprints collected, captured, received, otherwise obtained and/or stored by Swan”.  Id. at *2.  Barton asserted Swan violated BIPA in: (1) failing to institute, maintain, and adhere to publicly available retention schedule in violation of 740 ILCS 14/15(a); and (2) failing to obtain informed written consent and release before collecting biometric of information.  Id.  On July 31, 2020, Swan filed a Motion to Dismiss, asserting in relevant part, that Barton’s BIPA claims were preempted by § 301 of the Labor Management Relations Act (“LMRA”).  Id.  

On March 2, 2021, the court held that as Barton was a unionized employee, her Collective Bargaining Agreement (“CBA”), which contained a management rights clause and grievance procedure, controlled and as such Barton’s BIPA claims were preempted by § 301 of the LMRA.  In coming to its conclusion, the court heavily relied on the courts holding in Miller v. Southwest Airlines, Inc., 926 F.3d 898 (7th Cir. 2019). Id. at *6. In Miller, the Seventh Circuit held an adjustment board had to resolve the employees’ dispute over the airline’s fingerprint collection practices because their unions may have bargained over the practice on their behalf.  Miller, 926 F.3d 898.  The court in Barton noted that the United States “Supreme Court has held that the RLA preemption standard is virtually identical to the pre-emption standard the Court employs in cases involving § 301 of the LMRA” and therefore the same outcome should apply.  Barton, 2021 WL 793983 at *4. 

Key Takeaway 

While these cases demonstrate the potential to circumvent or limit BIPA litigation, the increased volume of biometric information being used by companies and the push for biometric policies that govern the use of these technologies and promote safeguards for consumers will undoubtedly continue.  

With many states looking to implement biometric privacy laws similar to BIPA, it is important to have legal tech counsel to address compliance with these emerging laws. Beckage attorneys, who are also technologists and former tech business owners, have years of collective experience with new technologies, like artificial intelligence, biometric data, facial recognition technology. We have a team of highly skilled lawyers that stay up to date on all developments in case law on BIPA and who can help your company best defense given the current legal landscape. Our team can help assist your company in assessing and mitigating risks associated with emerging technologies. 

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BiometricsBipartisan Group Proposes New York Biometric Policy

Bipartisan Group Proposes New York Biometric Policy


In January of 2021, a bipartisan group of New York State lawmakers proposed a comprehensive policy that places restrictions on the collection of biometric information by companies operating in the state. Assembly Bill 27, the Biometric Privacy Act, would allow for consumers to sue companies that improperly use or retain an individual’s biometric information. New York’s biometric act follows suit behind Illinois’ Biometric Information Privacy Act (BIPA), the first and most robust state law that guards against the unlawful collection and storing of biometric information. Like BIPA, Assembly Bill 27 was created to place regulations on a company’s handling of biometric data, such as fingerprints, voiceprints, retina scans, and scans of the hand and face geometry. Assembly Bill 27, however, does not cover writing samples, written signatures, photographs, or physical descriptions.

What Is Included?

The Biometric Privacy Act requires businesses collecting biometric identifiers or information to develop a written policy establishing a retention schedule and guidelines for permanently destroying the biometric data. The destruction of the data must occur when the initial purpose for collecting the biometric data has been “satisfied,” or within three years of the individual’s last interaction with the company, whichever occurs first. This bill also includes a private right of action that would allow consumers to sue businesses for statutory damages up to $1000 for each negligent violation and $5,000 for each intentional or reckless violation.

Further, AB 27 requires companies to obtain written consent from individuals before collecting, purchasing, or obtaining biometric information and provide notification to those individuals about the specific purpose and length of time the data will collected, stored, and used. Companies are prohibited from selling, leasing, trading, and profiting from biometric information and strict restraints are placed on a business’s ability to disclose biometric information to a third party without consumer consent.

The Impact of Biometrics on Future Legislation

With the increased volume of biometric information being used by companies leveraging biometric-driven timekeeping systems and other technologies, the push for biometric privacy policies that govern the use of these technologies and promotes safeguards for employees is gaining momentum. Several states are also looking to amend their breach notification and security laws to include biometric identifiers. For example, New York State’s SHIELD Act, the breach notification law enacted in 2019, has already been expanded to include biometric data in its definition of private information.

At Beckage, we have a team of highly skilled lawyers that stay up to date on proposed and enacted legislation. With states looking to implement biometric privacy laws similar to BIPA, it is important to have legal tech counsel to address compliance with these emerging laws. Our team can help assist your company in assessing and mitigating risks associated with emerging technologies.

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